Fiber-optics: Alternative Technologies
by Art Hiester
Comparing Fiber-Optic Technology to Planned Satellite based Gigabit Internet (SpaceX and OneWeb). Some Thoughts about future broadband deployment in Estes Park.
In the below report, NEO Fiber provided detailed engineering and financial analysis of broadband service options for the area served by Estes Park Power and Light Division.
The analysis is based on extensive, real-world experience and industry-standard assumptions.
Based on NEO Fiber’s analysis, the Town of Estes Park has an opportunity to facilitate access to financially sustainable, state-of-the-art broadband service that would provide:
Competitive broadband internet speed and cost to business and residential customers,
Funding entirely through user fees,
Approximate 10 to 12 year debt retirement of $27 - $30 million of infrastructure buildout costs,
Provides a source of revenue to the Town similar to that since 1945 from the Power and Light Division,
Private-Public Partnership opportunities for local internet service providers.
NEO Fiber examined, in detail, five different models of service delivery. After extensive evaluation, the only two financially viable models were 1) Retail Services to Businesses Alone or 2) Retail Services to Businesses and Homes. These two models were financially viable because they provided sufficient income from user fees to retire infrastructure buildout debt.
The other three models, 3) Infrastructure Owner Only, 4) Government Services Provider, and 5) Open Access Provider, did not produce sufficient income to retire infrastructure buildout costs.
There is strong public support for access to competitive broadband as demonstrated in the February 2015 SB-152 special election results, and as found in the NEO Fiber broadband survey in which 93% said they would be interested in accessing a faster, more reliable broadband network.
Competitive broadband is essential to sustaining and developing Estes Park’s economic and cultural vitality.
This was reflected in the recent Federal Communications Commission’s (FCC)
NEO Fiber Draft Deliverable determination that broadband internet access is a utility, as necessary to contemporary life as electricity, roads, and water systems.
In NEO Fiber’s broadband survey and public engagement discussions, it was clear that Estes Park’s current levels of broadband service are considerably more expensive and slower than what is currently available in our competitors’ areas within Colorado, nationally, and globally.
If providing competitive broadband services to Estes Park were financially attractive to the private sector, it could be argued that it would have already happened. High initial capital costs, higher than public sector borrowing costs, need for higher return on investment than in the public sector, and our comparatively small customer base and consequent small revenue stream, make private sector provision of speed and cost competitive broadband service unlikely.
In the course of its evaluation of broadband delivery options, NEO Fiber met with all of the local service providers. Along with the general private sector issues identified above, restricted access to capital and return on investment concerns may limit local internet service provider ability to furnish more competitive broadband services.