Results of municipal broadband feasibility study: City-owned Internet has big pluses and price tag
A Comcast Xfinity truck gets a refinement at the Seattle Pride Parade 2017. (Photo: Comcast Washington State via Flickr)
City-owned Internet would cost the city $150 million to around $194 million to build with the expense spread over several years, according to a presentation Monday. After a decision to go ahead, Cambridge would be fully wired within seven years, with up to two of those for preparation followed by five of installation – but neighborhoods could join on a rolling basis, starting in year one.
Installation moves as quickly as 500 feet or more a day, said consultants at a roundtable of the City Council.
“So I’d face a day or two of disruption directly?” councillor Burhan Azeem asked the experts from the firms of CTC Technology & Energy and Rebel. “It doesn’t sound like it would be as big of a construction project as I was initially worried about.”
Azeem was notable as a councillor saying his mind was changing, in this case toward liking the project. That’s in line with a summer survey in which a representative 66 percent of respondents agreed or strongly agreed that the city should facilitate building a fiber broadband network, even if it requires a tax subsidy.
“I was a little bit skeptical of municipal broadband because of the cost of $200 million and all this time and energy and effort,” Azeem said. “And the benefits weren’t clear to me. This conversation has been really helpful in convincing me otherwise.”
A city-owned network of fiber-optic cable would enable superfast 5G and 6G tech “and everything that comes beyond it,” president Joanne Hovis said, and “is considered future-proof,” meaning it would never have to be replaced. Because it’s city-owned, costs to subscribers would be lower. The models examined Monday found a sweet spot of market-rate users paying $70 a month for city-owned broadband – low-income customers would likely pay $30 – compared with current rates of more than $100 a month for homes and $500 a month for businesses.
In cities such as Cambridge, which is monopolized by the Internet provider Xfinity, upload speeds are squeezed to ensure users get zippy download speeds – useful when streaming a movie. The city-owned broadband would be “symmetrical,” with uploads that are just as fast.
Fiber-optics for the future
Some councillors said they needed to understand why this was worth a $150 million tradeoff, especially given other priorities such as housing.
They got answers befitting a city that likes to think of itself as a home for innovation: The fiber-optics on which good wireless depends will be “used to deliver services that we can’t imagine right now,” Hovis said.
“If we went back in time 100 years, we would be debating whether to pave the roads in Cambridge,” councillor Quinton Zondervan said. “In the case of broadband, it’s creating potential new business opportunities, learning opportunities and economic opportunities for our residents.”
Other benefits
There were also uses right now that profit from better upload speeds, including all the Zoom videoconferencing going on, said Patrick McCormick, Cambridge’s chief information officer.
The new cable would bring Internet in Cambridge to the level of what’s found in cities such as Palo Alto, California, and Austin, Texas, consultants said.
Even residents who declined city broadband would see a benefit, because companies such as Xfinity quietly lower prices to complete – sometimes even cutting prices preemptively when they hear there will be competition, the consultants said.
A public good
The dialogue also included discussion of being able to guarantee net neutrality, so the speed of some websites and services weren’t choked on purpose by companies playing favorites; and closing a digital divide exposed during the Covid pandemic when all kinds of work, education, appointments, the ordering of essentials and entertainment went online. In 2020, the school district discovered it had to supply Wi-Fi hotspots to students who lacked adequate Internet at home.
In most scenarios in which Cambridge owns its own fiber network, it could decide where to start installation and thus which neighborhoods could get the services first. Focusing on lower-income areas where more people would use the lower-paying tiers of $20 to $40 monthly might slow the return on investment, but the consultants modeled finances out to 2050 – and showed revenues outpacing expenses as soon as 2029 with only 40 percent of residents opting in.
Councillor Patty Nolan agreed that city-owned broadband was an investment and a public good. “We don’t ask people what’s the return on investment for paving our streets or building our schools,” Nolan said.
More work to be done
A full report prepared by city staff is due Tuesday, and more hearings are needed before a decision to proceed. That would launch 18 to 24 months of market research, selection of a business model and a partner, negotiations and bonding out the expenses before years of installation. There’s a “goal of having the entire city lit up within five years – again, that being a conservative estimate,” Hovis said.
Another possible wrinkle was raised by City Manager Yi-An Huang: “Maybe there are exciting opportunities to pursue with our neighboring cities.” Somerville officials are looking at city-owned Internet as well, going beyond the recommendations from their own 2018 task force.
“Where we are landing … is that this is financially feasible,” Huang said. “There’s a lot more work to be done. What we have found is there’s not a reason to stop.”
This post was updated March 16, 2023, to include the full feasibility report.
This will be a complete fiasco.
First of all, intuitively, the cost will be significantly greater than what is proposed. That is what has happened with other projects that used consultants… projects such as low income housing rebuilds (or should I say teardowns),
and new public schools. Substantial cost overruns have been the norm.
Then we have the problem of who maintains the system. Can you imagine municipal employees dealing with an outage at 3 AM on a Monday morning?? But, even before that we’ll have the problem of the buildout. A city that can’t even properly deal with streets, certainly will not be able to deal with major citywide construction over an extended period of time.
The city made a huge mistake in giving Xfinity a perpetual lockup. It won’t admit that the Council simply didn’t have the slightest idea of what it was doing. I’m afraid that today, the Council still doesn’t know what it is doing.
The most likely option if this project moves forward, as I hope it does, is for the city to partner with an entity to operate the network. The city would build and own the network – just as we own and built our entire water supply.
Unlike with our water supply, our partner would operate the network and handle all the operations side of a broadband. Internet is an essential utility and it should be available for all.
After reading the 46 pages of the proposal a few things caught my eye.
1 Take rate of 40%. If there are 47,449 households in Cambridge and the expectation according to the plan is 27,000 customers (the 192 million divided by the 7,117 cost per customer), that is a take rate of 56%. Councilor Noland, I’m sure I made a mistake in my numbers? Would you be so kind to correct me.
2. Projections out to 2051 are absolutely worthless. In fact, projections out five years are mostly worthless.
3. When one sees the phrase “marketing focused on local pride”, intuitively you know something is really wrong. Very few people really care about local pride re municipal owned broadband, and for that to be considered in the take rate is pure folly. People could care less about municipal pride; they want a system that works all the time at the promised cost.
4. When looking at all the fiber optic lines, there is one along Coolidge Avenue down to the Cambridge Cemetery. Why is that? Is there a need to run a line to the cemetery? Who would use a line? The workers? It is sloppiness such as that, a minor thing, which makes one suspect of the thought process that went into the expensive consulting project.
5. Councilor Noland, with all due respect, think of the alternative. Take the money that the city will need to invest in this project, and segregate it as we have done with escrow accounts for some of our debt. Invest it in U.S. Treasuries and subsidize those that you’re going to subsidize under this proposed plan. It will be cheaper, with no hassle, and the city won’t have to dig up the streets in much of Cambridge.
6. On another subject, but one that is related to the proposed financing of this project. Please take a look at the post retirement pension and health care plans and tell your constituency what you see. I’ve looked at it closely and all I can say is this city is not drowning in excess funds as most people, including those on the Council, believe. Wake up before this city has a financial problem. The expansion of biotech has slowed and it has been mostly responsible for the good financial position the city has been in for the last twenty years. No matter what Moody’s or Standard and Poors say, there are going to be financial problems during the next ten years.
Councilor Nolan,
My apology for misspelling your name.
Its an age old question whether the city should own and operate the essentials. Internet access is definitely essential for our future.
Its less clear if its worth the return on investment or if there is an alternative. But that will be clearer down the line with the evaluation process
How much would it cost the city to allow competitive cable from RCN, or Verizon Fios?
I am still irritated that two city managers dragged their feet for years on getting this study done.
The best time to have laid fiber would have been at the same time they started all the major street updates (like the Western Ave Project).
Knowing if it was feasible back then and the costs would have been significantly lower . Both our previous city managers did us a horrible disservice in refusing to do the assessment that was needed and in detail. Cables could have been done underground in the trenches then rather than dealing with utility poles and overhead wires.
Pattyorland – the problem is at this point Fios is a dying technology and is non-competitive for needs.
Pooling resources and planning with Somerville may indeed be something that needs to examined if they are actually moving forward as well.
Comcerned43 all I can say is you don’t understand that the city investing in the bond market (T-Bill or otherwise) in the current environment would be extreme stupidity considering the banking crisis that has been caused by the bond market going on in the USA and internationally. The City NEEDS infrastructure… this is like claiming we should not repair bridges but wait until they collapse and salt the money away until then…. a grand stupidity in the modern economy and for the losses that will be incurred.
Technology will continue to advance and we can’t stick our heads in the sand. The city did that previously…. its how we got to the current state of the Comcast monopoly that is strangling people who are long time residents and businesses… Comcast keeps raising the rates on existing customers while offer bargain deals to new folks who use them for 1-4 years and then leave the city. We are subsidizing transients population members and punishing property owners with Comcast.