Spokane explores publicly owned broadband network intended to open up internet services, drive down costs

Spokane may be dipping its toe into the high-speed internet industry.

City lawmakers approved last month the creation of a working group to explore a publicly-owned municipal broadband network. City Councilman Breean Beggs, the sponsor of the plan, cautioned against an expectation that all citizens would soon be able to cut the cord with private internet companies. Instead he envisions a system where Spokane would lay the groundwork for other service providers. The councilman pointed to examples of cities in Idaho and elsewhere where public investments in fiber lines have led to lower prices for consumers.

“I do think it’s a public good,” Beggs said. “There’s a huge digital divide between the haves, and the have nots. I think we’re just now beginning to understand what can be accomplished with broadband.”

Eric Finch, the city’s IT director, said the time was right to take stock of the city’s existing network and determine where it might make sense for new access, while being cautious about stepping on the toes of private industry.

“Part of this is, we have to decide what we’re going to be when we grow up,” Finch said.

The creation of the working group follows efforts in 2015 by then-city councilmembers Michael Allen and Jon Snyder to explore the possibility of the service in Spokane. Their group met for about a month and a half and determined the city would need to commit to laying significant amounts of new fiber underground to make it viable, Allen said.

“Most of what we did have is kind of in the downtown area,” he said. “There is just not enough existing infrastructure.”

The city has been inching toward laying that infrastructure, with several examples – some successful, others not – to follow throughout the country.

Cautionary tales, or signs of the future?

Other communities have invested millions of dollars in the technology, with mixed results. While Chattanooga, Tennessee, has been held up as a shining example of a public broadband network, generating millions in tax revenue and creating thousands of new tech jobs in a former railroad town, others have proven to be cautionary tales.

Provo, Utah, spent $39 million to build a network, then turned around in 2013 and sold it to Google for a dollar in an effort to escape loan debt that was projected to exceed revenue totals from the system.

Beggs said he prefers an approach that doesn’t saddle taxpayers with additional debt, pointing to the recent creation of a public network in Ammon, Idaho, as a potential model for Spokane. In that city of roughly 15,000 people outside Idaho Falls, planners extended fiber lines to sections of town that opted for hook up. The infrastructure is owned by the city, but different private companies compete to provide internet access directly to consumers.

“At this point, we’re not imagining this is a new city utility,” Beggs said.

The Ammon system probably makes the most sense for a city the size of Spokane, said Christoper Mitchell, director of the public network advocacy group the Community Broadband Networks Initiative.

“Spokane would probably want a model in which the system paid for itself,” Mitchell said. “Really that’s the only way. They’re not just going to raise taxes and build a network.”

Allen’s group recommended the city lay what’s known as “conduit,” or the piping that can be filled with the fiber optics necessary to transmit high-speed signals, under streets the road department is tearing up anyway as part of routine maintenance.

That’s what the city’s done over the past decade, said Marlene Feist, director of strategic development for the public works and utilities department.

“It’s not engrained in every project, but different departments have gotten better about asking, ‘You’re doing 37th (Avenue), can you drop some fiber in there?’” Feist said.

Crews have focused on extending fiber optic lines to areas of the city where they’ll want connectivity in the future, including to the massive subterranean tanks being built around town to capture stormwater runoff, Feist said.

Beggs said the intent was not a massive infrastructure investment, but to bring communities online as it becomes technically feasible to do so.

“At this point, it’s on such a small scale compared to other areas,” Beggs said. “Full connectivity might happen someday, but with the current status quo it will never happen.”

City officials could not produce a map of where piping and so-called “dark fiber,” or lines that haven’t yet been activated to transmit a signal, have been buried in town. Beggs said he’d received word from the city’s IT Department that 30 miles of such infrastructure exist in town, but neither Finch nor Feist could confirm that figure. Allen remembered seeing a map during their discussion three years ago.

Other local communities pursuing broadband

A publicly owned broadband network in Spokane wouldn’t be unique to the region. The city of Cheney and public utility districts in Grant and Pend Oreille counties have already established systems with varying degrees of connectivity for individual residents.

The Grant County Public Utility District provides high-speed connectivity to roughly 70 percent of county residents, said Christine Pratt, a spokeswoman for the utility. The district’s commissioners recently elected to invest another $7 million to continue extending service to far-flung areas, she said.

“Just like probably any business, we tried to build out first to the area where we have the most takers,” Pratt said. “Over the years, we’ve continued to build out.”

Grant County has spent $256 million to build out its network. Full coverage of the final 30 percent of county residents is expected to cost up to an additional $76 million, Pratt said.

Grant County’s system works similar to Ammon’s, because state law prevents public utility districts from selling internet services directly to the customer. Private companies use the publicly owned fiber optic network and compete with each other to provide internet service directly to retail customers. Expansion of the network has been funded by electric rate fees, a situation that wouldn’t be possible in Spokane because electric services are provided by private companies, the largest being Avista Corp.

The city of Cheney has also laid some fiber optic lines, with costs shared by Eastern Washington University, said Stepen Boorman, director of the city’s Light Department. But the city hasn’t taken the extra step of selling connectivity via retail or wholesale to consumers, despite rumblings in the early 2000s that was the direction Cheney was headed.

“The city did look at it pretty hard at that,” Boorman said. “Right now, it kind of is what it is.”

Lower cost for a public network?

The promise of competition for consumers’ attention, and an expected fall in the price of high-speed internet service, is fueling the current calls for Spokane to get into the broadband game. Users of the popular online message board website Reddit organized a meet-up to lobby members of the City Council to establish the working group, and celebrated its unanimous approval Feb. 26.

“The way I see it, we kind of have a market failure here in Spokane,” said Mike McBride, a South Hill resident who put out the initial call online for people to lobby the council for the working group.

Nathan Hinish is also pushing the City Council to pursue a publicly owned network. He’s worked on the board of Volunteers of America and said extending affordable high-speed internet would be key to helping those in poverty have access to job training and recruitment.

“I think the reason I’m behind this so much, right now, is let’s get some data behind our decision,” Hinish said.

There is research to suggest publicly owned networks drive down the cost of internet access. Researchers at Harvard University published a report in January that analyzed 27 communities comparing private service providers and publicly owned networks. In 23 of those communities, the public option was less expensive than private providers.

But there are questions whether a major infrastructure investment would make sense right now, given that telecommunications companies are ramping up to provide the next generation of satellite internet whose speeds should compete with those of fiber-optic networks. The city already has an agreement to install so-called “smart cell” technology on public utility poles throughout town, and the city of Spokane Valley is prepping to do the same.

“The (next generation) is going to open up broadband to more levels of competition,” said Allen, the former councilman who originally looked into the network.

And Michael Cathcart, executive director of the pro-business advocacy group Better Spokane, questioned whether city government was once again reaching too far into the free market.

“There’s a lot of market activities that are taking place that show this can sort of be a duplication of efforts,” he said.

But both Cathcart and Beggs agreed that promoting more low-cost entries into high-speed internet service should be a city goal.

“The thing is, right now, that fiber is just sitting there,” Beggs said. “We’ve already paid for it, in the city, and we’re not leveraging it.”

The working group is scheduled to hold its first meetings this week, and Beggs said anyone interested in serving should contact his office at City Hall. A report from that group should be ready by June, Beggs said.