City officials have recommended construction of a San Francisco municipal broadband network based on a public-private partnership. The recommendations came in a 103-page report issued by the office of Supervisor Mark Farrell on March 15.
According to the San Francisco Municipal Fiber Advisory Panel’s report – ¨Financial Analysis of Options for a Municipal Fiber Optic Network for Citywide Internet Access – a publicly funded broadband utility network would cost the city an estimated $867.3 million in construction costs plus $231.7 million a year in maintenance costs. Projected subscriber revenue would result in an annual deficit of $145 million.
Given this, as well as the desire to build in some market competition, the authors recommended the city launch a public-private partnership model that calls for all San Francisco homes and businesses to pay an average $26 per month utility fee for baseline Internet access. Introducing tiered pricing models based on type of service or bandwidth use could offset operating costs and lower baseline fees.
The news follows in the wake of San Francisco entering into a municipal gigabit fiber network partnership with Google Fiber last month.
San Francisco Municipal Broadband
Adopting the position that everyone has a right to broadband access, the San Francisco report authors discarded the demand-based business model used by strictly private sector broadband ISPs for a utility model that assures all residents will be able to access any broadband network the city decides to build.
In a press release, Farrell drew a parallel between high-speed broadband connectivity and public utilities. “When you turn on the faucet, clean water comes out. When you turn on the light switch, the lights come on. And when you open your laptop, everyone should have access to a fast Internet connection – whether you live in Pacific Heights or the Bayview. Low-cost, high-speed Internet is the utility of the 21st century, and as the innovation capital of the world, San Francisco’s leadership on this issue should be a no-brainer.”
The San Francisco municipal broadband advisory panel’s report was based on analysis of three existing gigabit municipal broadband networks: in Chattanooga, operated by city electric and broadband utility EPB; the Kansas City-Google Fiber public-private partnership and a similar agreement between Westminster, Maryland and Ting.
In a news report, Christopher Mitchell of the Institute for Local Self-Reliance said taking a public-private partnership approach enables city governments and gigabit fiber project partners the ability to concentrate on their respective strengths. For governments, that means organizing and overseeing large-scale construction projects. Gigabit fiber companies, for their part, can then focus on rolling out the broadband fiber infrastructure and developing an ecosystem of customer-centric businesses with private-sector partners.
“I think for a long time, cities have wanted to build fiber networks where they would not have to offer services directly,” Mitchell was quoted. “So the cities would basically create the fiber network, but lease it or make it open to one or more providers that would use it to compete.”