Fiber for American Fork, Part 6: New Thoughts and Closing the Loop

I last posted about American Fork City’s proposed citywide fiber optic utility about three weeks ago. At the time I had some unresolved, long-standing concerns (though I have favored the proposal since before it went public).

Since then, I’ve read some documents, including the City’s service agreement with LightHub Fiber, an interlocal agency through which the utility may be created. (Trust me, no one will want the movie rights to that document.) And I’ve spoken at length with City Administrator David Bunker.

I have new information on a couple of points, which changes my view of one part of the question. I’m also ready to close the loop on those unresolved concerns.

It’s Not About Faster Internet for Residents

Much public discussion of the proposed utility has focused on its ability to deliver faster, cheaper Internet connectivity to city residents and businesses — which is a major advantage. But those of us who’ve undertaken to explain and analyze the proposal have failed in some measure to highlight an essential point: faster, cheaper Internet connectivity is not why the City is exploring this.

(I wonder if we’re instinctively too quick to think too little of voters and residents, to assume that they’re not interested in deeper discussion and will be swayed best by the simplest, most basic byproduct — in this case faster, cheaper Internet. Shiny beads, you see.)

The task force’s discussions this spring began with the question why the City would want to get involved in such a thing. The reasons were mentioned in the public meetings, and I’ve noted them in some of my writings here, but I (and others) worry that they’ve been overshadowed. So let’s go straight to the bone.

The City wants the system as a utility — to facilitate communication with every residence and business, for metering (including imminent state-mandated metering of pressurized irrigation), E911 service, even library services, among other possibilities. The early read is that savings in rolling out citywide pressurized irrigation metering, if we build the fiber utility, may exceed half the cost of building it.

If the City were to turn to UTOPIA for such things, there would be serious limitations on the scope and flexibility of these services and functions, quite apart from fiscal concerns.

Faster, cheaper Internet service for residents and businesses is still an important consideration; it’s the spinoff benefit that would help pay for the system and invite a host of other advantages. But it’s not the point.

Alternatives

Creating a citywide utility, largely funded by a citywide utility fee, is a new approach to municipal broadband, and it has caught the attention of interested observers around the country. Some are watching closely to see how we fare. And if UTOPIA, acting in its own self-defense, isn’t lobbying the Utah Legislature to ban the approach before it catches on, I’ll be stunned. UTOPIA wants to be Utah cities’ go-to provider, and American Fork’s approach would threaten that dream of hegemony.

The City has considered alternatives. (Beware opponents who claim the City hasn’t.)

  • Doing nothing is almost always an option, often the wisest option, and has been seriously considered. (I make it the second-best option here.)
  • Public-private partnerships were explored but found not to be feasible.
  • UTOPIA was considered, along with participation-based subscription approaches in general, but it is not a good solution for American Fork.

On its face, Woodland Hills seems like it might be the most promising model in a certain category; I mentioned this last time. But Woodland Hills is mostly at the mercy of UTOPIA, including for their connection to the Internet backbone, a run of several miles, and their network operations center (NOC).

Woodland Hills’ approach may still be the best alternative to a citywide utility with a citywide fee, but on closer examination, it is a weaker alternative for American Fork — at best the third most appealing option, behind (1) the proposed system and (2) doing nothing.

Bear in mind that the proposed utility in American Fork would not supplant the private market. Instead, it would create a citywide market in which private providers would operate profitably citywide, not just where (lacking the citywide infrastructure) it’s most profitable for them.

A Key Issue: City Control of Its Utility

After further study and discussion, I am satisfied that the proposal — including LightHub’s role — sufficiently protects American Fork’s ownership and control of its asset, including where fees and service levels are concerned.

One component of the costs, the operational costs shared with all member entities of LightHub, will be under the LightHub board’s control. The board consists of one representative from each member city, and that cost will be the same for every user in any member city. So it follows that it will be in every city’s self-interest to keep it under control. To put it crassly, other member cities couldn’t increase that component of American Fork’s rates without increasing their own.

Other parts of the rates would be controlled by each city for itself, giving each city plenty of control over its own prices and service levels.

This is crucial, as I have said. I’m now satisfied that it’s being handled intelligently.

(That said, my support is hardly crucial. I’m not on the city council; I’m not voting on any of this. I just contribute words.)

Bonding Through LightHub (Revisited)

I previously dismissed the possibility of bonding through LightHub, not directly through the City, as bad politics. I have since learned of an advantage which wasn’t explained before. So as long as it’s done above board, in the open, with no quiet shell games or other chicanery, bonding through LightHub might well be the best option.

Here’s that advantage. If the bond is through LightHub, it won’t impact the City’s ability to fund key upcoming projects, including some major road-building which needs to happen on the south side. The City won’t hit its bonding capacity anyway (a more complicated question for another day), but rates might be somewhat lower for those projects, if the fiber utility bond runs through LightHub, not the City. (American Fork would still be obligated to make the payments.)

All else being equal, saving money is good politics.

However the bond is handled, there are some advantages to working through an interlocal agency like LightHub. Here are three I particularly like.

  • We can enjoy volume discounts on equipment from major suppliers — including a $300,000 savings on “autoprovisioning” technology, which would allow customers to go online and change services and providers essentially with the click of a mouse button. (It’s an excellent way to facilitate competition.)
  • Working through LightHub will allow us to share some operational costs with other cities rather than bearing them entirely on our own. Economies of scale will save us money.
  • Working through an interlocal agency, with a single appointed representative from American Fork, protects the system somewhat from the whims of a rogue city council, where one or two or three members might try to take control of operational and business decisions, or at least obstruct them. The task force broached this concern in its June report. We don’t currently have such a council majority, but some individual obstructionism is currently foreseeable.

Overall, if I seem to be suggesting that the City is taking its time and trying to be smart about all of this, I’d have to say yes, that is my strong impression.

What’s Next?

There will be some discussion among the council at an upcoming work session. (It’s not on the agenda for tomorrow evening, Tuesday, November 19.) Note that work sessions are for discussion and preparation; no binding action is taken. They are open to the public, but there is no opportunity for public comment.

Sometime soon the council will need to decide to do nothing at all, to proceed with a vote to bond through the City itself, or to choose bonding through LightHub.

Kaysville is the other member of LightHub at present, but its participation is in limbo. It takes two to tango, in the interlocal sense — especially if we’re bonding — so if Kaysville can’t or won’t perform, American Fork may be looking for another interested city. It may not be hard to find one.

Any number of other political or procedural complications could ensue. We’ll just have to see.

Meanwhile, I recommend chatting with members of the city council about your questions, concerns, and views of this issue. I’ve found all five of them eager both to talk and to listen. In this matter they have some serious, complex decisions to make in the near future.

As always, thanks for reading.

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