Fiber for American Fork, Part 2: Anticipated Benefits

This is the second of several planned blog posts about a proposal the American Fork City Council is considering to extend fiber optic connectivity to every residence and business in American Fork as a utility. You can find a more detailed description of the proposal itself in the previous post, where I also explain my head start in knowing about the proposal.

Before we go further, I should interrupt for an apology. I hoped to post this before I left for Lake Tahoe (hence the photo) for a week at the end of July. Now it’s not even August any more, and I’m finally posting it. Sorry about that.

This post explores the expected benefits to residents, businesses, and the City itself, if we build the fiber system. This is one important angle from which to view the proposal. Another will follow in the next post: good and bad reasons for opposing it.

Meanwhile, some housekeeping:

• The City has held the three information meetings it initially scheduled. I was at the first and third — on the panel — and I have to say they were well attended, and city residents brought lots of great questions and in some cases some serious technical expertise. So, as my Aussie friends say, well done to you, American Fork!
• Another public information meeting is scheduled for 6:30 p.m., Thursday, September 12, at City Hall in the city council chamber.
• Three weeks ago, as scheduled, the city council unanimously approved a “parameters” resolution, as a preliminary step toward a final up-or-down vote on the proposal, which will come later. The vote was 5-0 in favor.
• Last week, the city council approved an interlocal cooperative agreement, another part of preparing the way for a final vote to fund and build the utility or not. The vote was 4-1 in favor, with Councilmember Rob Shelton casting the lone negative vote.
• Watch for a public hearing at the beginning (7:00 p.m.) of the September 24 city council meeting on this matter. Feel free to attend and listen, and even speak your mind. This is not a done deal; the city council is still studying it, and last time I talked with each of them, they hadn’t finally decided how they’ll vote. They’re eager to hear from constituents.
• Originally, the final vote was expected in mid-November. Now I’m hearing that it might be as early as late September or sometime in October.
• Since my first post on this proposal, the LightHub Fiber website has added an FAQ section, which is worth a look.
• American Fork Mayor Brad Frost’s recent op/ed in the Daily Herald is worth reading.

We’ll get to those anticipated benefits now. Thanks in advance for reading. The importance of learning what is actually proposed and why, before deciding whether you like it or not, seems like it should be self-evident. But sometimes I wonder. In any case, it makes for more sensible, more honest politics.

In a Word, Why?

In this post I’m splitting the anticipated benefits of a citywide fiber utility into three categories:

• benefits that don’t move me, but may interest you;
• benefits which I will value and enjoy, if they happen, but which for me do not by themselves justify the venture; and
• benefits which, in my view, justify the venture.

Your views and priorities may differ from mine, and that’s fine. Official publicity may also prioritize them differently — partly because some of them are more difficult than others to explain in a few words. And I’m sure there are already a few folks around who are willing to give you a much different view. You’ll want to check their facts and reasoning, just as you’ll want to check mine.

In any case, all of the following is one guy’s opinion. I don’t work for the City or speak officially for the City.

No Big Deal (to Me)

If built, the system will make it easier and cheaper for residents to stream to those 4K televisions that are all the rage just now, and to 8k televisions, which are already coming, with their 33 million pixels. I’m not saying 4K and 8K are bad, or that you should think as I do, but I’m still doing just fine with HD. For me, better TV doesn’t justify building a new city utility to bring it to you.

It’s also possible that a citywide fiber utility will hasten (and broaden) the arrival of 5G connectivity in American Fork — if providers want to use the City infrastructure instead of, or in addition to, their own. Those antennas which have to be placed every several hundred feet need to be connected by fiber, you see. In my mind, this wouldn’t justify creating the utility either — even if it might coax providers to offer 5G in more of the city, not just the major business districts and the high-density residential areas, where it will be most profitable.

Someone out there may be thinking that a hard-wired, high-speed alternative to 5G is probably a good idea anyway, because of concerns, legitimate or otherwise, about the health risks of all the electromagnetic radiation from all those 5G antennas. Wherever the science itself eventually leads, it’s not hard to imagine public concerns dramatically slowing the penetration of 5G into residential neighborhoods. I’m not moved by this at present, but I’m … interested.

Good but Not Enough

For $10, give or take, the proposal should deliver to me faster Internet connectivity than I’m getting through my current provider, which is mostly adequate but not great, for $50.

For a higher but more than competitive price, the proposed utility could deliver gigabit speeds. In Ammon, Idaho, their Open Access Fiber Optic Utility (ArcGIS) is delivering a gigabit for less than I’m paying for my present slow broadband.

Speaking of prices, people who want to stick with the service they have now from other providers, if and when the city system is build, should find that those providers have to lower their prices and improve their offerings to compete in American Fork. We’re close to “everybody wins” here.

Better still, we’re talking about point-to-point architecture, which means, among other things, that I can get the same speed in the evening, when all my neighbors are online too. This is not currently the case, to put it mildly.

I’d love to have the symmetrical service LightHub will offer, where the upload speed equals the download speed, instead of being far slower. Fast downloads enable video streaming, for example, but you want fast uploads too, for video conferencing and any number of other things you might want to do while telecommuting, engaging remotely with a medical provider, gaming, etc.

Viewed simply as a competitive product, this is quite seductive to me. But does it justify the creation of a new public utility, which includes every residence in the city paying that approximately $10 fee (or about $20 for every business), whether they use the basic service or not? In cases of legitimate severe financial hardship, opting out will be possible, but still …

This is a thornier question. I much prefer reasonable limits on the size of government at every level. Furthermore, the City’s Airswitch experience, neighboring cities’ UTOPIA struggles, and common sense suggest that there are some things the City could do down the road — of its own will or because unwise voters compel them — to disappoint us all. So the bar is pretty high, in my mind.

If the proposal were simply aimed at reducing the cost and increasing the speed of American Fork residents’ broadband connectivity, compared to what 80-90% of us are paying private companies like Comcast and AFConnect (the AF is for American Fiber; it’s a private company), or in a few cases UTOPIA, my enthusiasm for the project would be so low that it would look a lot like eye-rolling indifference.

That said, if the cost projections weren’t so encouraging, the next set of reasons might not sway me. But they do …

Compelling

1. Economics

The private market — if you can call it that, when the big telecommunications companies spend about $100 million per year on candidates and lawmakers — doesn’t serve American Fork particularly well in broadband connectivity. This is a natural consequence of a market condition economists call large externalities.

When much of the benefit of a thing doesn’t go directly to those who provide it, the provider’s financial incentives are too low, and the market is underserved. In broadband this can mean there are areas of the city where service is not available, or where the price for adequate service is too high, or where the level of service available is low — as in an American Fork medical practice which is connected to three broadband providers, but often can’t get the speed and low latency they require through any of the three.

Large externalities are generally considered to a good case for public involvement in the market — in this case, for a public utility, as in the cases of water, sewer service, electricity, and natural gas. The rationale is similarly compelling for such things as roads and traffic signals, bridges, parks, libraries, and more.

2. Growth

Growth on the Wasatch Front, including American Fork, is inevitable. We expect it will continue to be rapid and massive. This poses all sorts of problems — and a citywide fiber system offers partial solutions.

• Citywide fiber will help us to manage the nature of the growth, encouraging high-tech firms and other bandwidth-dependent companies to bring their jobs, employees, and tax revenues to American Fork. Someone is coming, and I prefer us to be part of a high-tech corridor, instead of some of the other possibilities.
• We already cannot build roads fast enough, and for a sad fraction of the year our air quality is poor. We can take some pressure off our lungs and our tax burdens not only by attracting desirable jobs closer to home, but also by facilitating telecommuting and home-based businesses, as a citywide fiber system will. Not everyone can work at home or even wants to. But the more we can reduce automobile trips, the better our air will be, and the fewer new lanes we’ll need.
• There will be significant benefits to City operations, if we have a citywide fiber system. For example, early estimates are that the retrofitting existing pressurized irrigation connects with meters (which did not exist as a feasible option when we built the system, but which Utah law now mandates, over the next few years) will be $15 million cheaper or more, if we have the fiber system. That savings alone is about half the cost of building the system. (These figures are based on reported costs, including the costs of metering connections in other Utah County cities.) That’s a lot of tax money you and I won’t have to pay over the next several years, because …
• Even conservative financial models, which I have studied and had explained to me repeatedly and in exhaustive detail (note my work on the mayor’s task force which studied the proposal), have this system paying back its 30-year bonds far ahead of schedule and contributing substantial revenue back to taxpayers, both individual and corporate, in the forms of funds which can be used by the City for other purposes, in lieu of some of our taxes; or used to lower rates for connectivity or offer higher speeds at the same rates; or all of the above.
• Most of the discussion so far has been simply about the possibilities inherent in faster Internet access with lower latency (shorter delays in transmission). There is a host of other possibilities, including existing technologies and future technologies, which are necessarily somewhat speculative. Lots of different services can be provided over such a system, besides Internet access — by the City itself and by private entities which join the system. These would likely include home security and automation services, public safety services (including school safety, an area in which Ammon, Idaho, is testing some exciting new things), medical services, entertainment, and much more.
• I already expressed some reservations about whether the private market, in the form of the big telecoms, is really private any more; they’re hugely influential on national and state governments, and they’re paying top dollar to be so. But I’m politically conservative, so as a default position I tend to favor the free market (if we can still find such a thing). To build and run an excellent citywide fiber utility would be to insert ourselves into the quasi-private market, to be sure — but a key effect will be to extend the benefits of that private market citywide, to all residences and businesses in the city, by creating a marketplace where the City can require a high level of service, including customer service. This will actually open more possibilities for the private market than presently exist — quite apart from the benefits to American Fork businesses of having less expensive access to better connectivity.

3. The Right Time

As I have studied the proposal — which I first approached with great skepticism and my (regrettably) characteristic cynicism, one of the things which impressed me was the timing. It comes early enough that the big telecoms haven’t twisted the Utah Legislature’s arms to prevent municipalities from doing what we propose. (This became a problem nearly two decades ago, when we tried something quite different with Airswitch.) And it comes late enough that we’re able to learn from the experience, good and bad, of hundreds of US municipalities who’ve built municipal broadband systems.

We’re coming to this late enough that we can learn from the success stories of places like Spanish Fork, and from cautionary tales like UTOPIA and iProvo. The current proposal incorporates key lessons — funded mostly by othere communities — in how to structure the utility, design the network, provide customer service, and so on in a way that brings the benefits to American Fork, not some outside entity.

Definitely Yes, But …

I’m in favor of the proposal, and I’ve told all five members of the city council why, in some detail. But reasonable people can certainly disagree here. So the next post, coming shortly (really, this time) is about good and bad reasons for opposing the proposal.

Stay tuned — and as always, your comments are welcome.