Low Risk, High Reward – Ammon’s fiber-optic approach draws praise

Date: 19 Feb 2014 | posted in: Media Coverage, MuniNetworks | 0 Facebooktwitterredditmail

Idaho Falls Post Register, February 19, 2014

When it comes to fiber optics, the city of Ammon is pursuing a high-reward, low-risk strategy.  Christopher Mitchell, program director for the Institute for Local Self Reliance, a nonprofit tracking more than 400 municipal fiber networks, said he is impressed with Ammon’s effort.

“They are definitely succeeding. When you take your time and couple the investment with other capital projects, it’s very low-risk and there can be a big reward,” Mitchell said Friday. “I think they have been very smart about using every opportunity they have. We haven’t seen any communities fail that use such a low-risk approach.”

The Institute for Local Self Reliance was founded in 1974 to assist communities with local development. It has been dealing with telecommunications for the past nine years and focuses on networks that are paid for by communities, Mitchell said.

Ammon has spent the past three years slowly building its fiber-optic network, which now covers about 30 miles.

If a business requests access to the network, the city provides an estimate of what it would cost to lay the additional fiber to reach the business.

There’s an upfront fee calculated by the cost of bringing the fiber to the business, which varies depending on the difficulty of the project. The city also collects a monthly maintenance fee that ranges from $20 for 25 megabytes per second to $65 for 100 mbps. The business then negotiates a monthly cost with a service provider. That approach has allowed the network to grow without the city accruing debt — a situation unique among municipal fiber-optic networks.


Ammon resident Jeff Crow supports expanding the fiber network to residential neighborhoods.

“I believe we could get it funded. If it was more widespread, I believe it could bring in more technically savvy people. If we could get enough new people, it could offset the cost. I think it could bring in a more diverse population.”

The city plans on hearing from the community to gauge interest and better understand what direction residents want to go in pursuing the plan. Patterson estimates two years of talking before the city expands its fiber network.

The city hasn’t decided how the project will be funded since officials are waiting for direction from the community. Patterson said consumers currently are at a disadvantage by relying on the infrastructure put in place by service providers. If the consumers bring the lines to their houses, Patterson said, they gain the power to negotiate price.

In Patterson’s opinion, the best way to finance the project would be to ask voters to approve a 20-year, low- interest bond. But the city won’t act without community support, he said.

“If you have fiber, it should add value to your property. You should be able to roll that expense into your property tax and pay the bond back through your property tax. If you do the math, it costs about $100 a year for 20 years to pay (the bond).”

Read the full story here.