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The Dalles Pays off Its Network Debt Ahead of Schedule

| Written by ILSR Admin | No Comments | Updated on Oct 8, 2014 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/the-dalles-pays-off-its-network-debt-ahead-of-schedule/

Of the more than 400 communities around the country that have built and benefitted from community networks, the town of The Dalles in Oregon may have a case for the title of “most bang for the buck.” Their commitment of $10,000 12 years ago to leverage a $1.8 million “QLife” fiber optic network has lead to a massive, $1.2 billion dollar investment from Google in the form of a huge data center, employing nearly 200 people and generating millions in tax revenues for the local community. And at the end of September, the QLife board of directors announced that they had paid off the loans used for network construction more than three years ahead of schedule. 

We covered part of The Dalles’ network story two years ago: a small city of just 13,000 was told by Sprint in 2000 that it would have to wait 5 to 10 years for broadband Internet access. Meanwhile, local manufacturing was declining and employers were overlooking the town due to its outdated infrastructure. Before building the QLife network, The Dalles had no access to the major long haul fiber pathway that happened to run right through town. As city manager Nolan Young told Andrew Blum in an interview for his book “Tubes,” it was like “being a town that sits next to a freeway but has no on ramp.” 

The city decided enough was enough, and partnered with the county and the local public utility district on a plan for a $1.8 million, 17 mile fiber optic loop through the community that would connect anchor institutions and offer middle mile access to private providers. 

The nascent network faced opposition from a local telecom in the form of a lawsuit, which scared the public utility district away from the partnership. It had another setback when a private partner declared bankruptcy, saddling the public agency with an $800,000 loan. The city and Wasco County pressed forward with their partnership, however, and secured half of the needed $1.8 million in state and federal grants while covering the rest with loans. The city made a one-time contribution of $10,000. QLife pursued a cautious strategy, building in successive phases only after enough subscriber revenue commitments were in place to cover the requisite loan payments.  

The city’s small investment has paid off many, many times over. Major network construction was completed in 2003, and in 2005 Google announced they would locate a major new data center in the town, bringing 150 jobs and a $600 million investment. Pleased with their easy access to major fiber optic infrastructure and seeing massive growth in the demand for cloud-based applications, Google announced last year that they would double down on The Dalles, investing another $600 million and creating dozens more jobs to grow their already huge facility. 

The benefits of the network aren’t limited to a single major employer. Schools, a community college, a hospital, and a network of medical offices all use QLife’s fiber directly for fast, reliable, and secure data services. Seven different telecom and internet providers also lease fiber from QLife, increasing the competition and service quality available in the area.

Even Sprint, the incumbent who told the city to wait a decade for broadband, started upgrading their own network six months after QLife construction began. QLife and Google have even partnered to provide free WiFi throughout downtown and many of the surrounding areas. Now, with their debt retired ahead of schedule, the network is running an operating surplus in the hundreds of thousands that could be put to any number of good uses. 

Of course, not every town that builds a fiber optic network will immediately get a $1.2 billion data center. The Dalles had several factors working in their favor when wooing Google, including cheap hydroelectric power from Bonneville Power Administration dams along the Columbia River and long haul fiber optic lines running right past their doorstep. However, City leaders were smart enough to see the opportunities in front of them and determined enough to persevere in the face of opposition. Their bet has paid off immensely.