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Missoula ready to embark on open-access broadband effort

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By Martin Kidston/MISSOULA CURRENT

The complete installation of an open-access broadband network in Missoula would include 55 miles of fiber at a cost of $9.1 million. Focusing on the city’s downtown district and business corridors would reduce the costs to $6.4 million.

The figures, included in a new master plan produced by Design Nine Inc., represent the next discussion that must take place before Missoula embarks on its broadband future. Without the investment, experts warn, local businesses will fail to compete on the international stage.

It is, they say, a reality of doing commerce in the 21st century.

“We want a digital road system for the 21st century,” said Marcy Allen, who’s helping spearhead the project. “When we think about the Internet, it’s our road system for delivering commerce in many ways. When we talk about broadband and an open-access network, we’re talking about a digital road system for Missoula.”

Efforts to build an open-access, high-speed broadband network in Missoula began in 2012 when a public-private partnership began looking for ways to retain, grow and attract businesses.

In 2013, the Bitter Root Economic Development District hired Magellan Advisers to further the effort by conducting a feasibility study. Completed last year, the study recommended self-financing a 60-mile network that offers open access to Missoula schools, businesses, health care centers and government offices.

With the feasibility study in hand, BREDD – aided by a state grant, local donations and money from local government – hired Design Nine to create a master plan guiding the network’s implementation.

The plan was unveiled this week at joint session of the City Council and Missoula County commission.

“This study was really about building on the work that was done in the feasibility study,” said Allen. “There were a lot of rough drafts of what the network would look like – the price tag. This dug into those a little bit more.”

Allen said the plan calls for a business-ready network, enabling high-speed data transfers for file sharing and other tasks. And it must be priced competitively, offering a range of service options at various price points.

Estimates provided with the plan suggest that $2.5 billion will be spent locally on broadband over the next 30 years. The cost of building a network today may be less than 1 percent of that, ranging from $6.4 million to $9.1 million.

Allen said advocates will now explore governance of the network and the formation of a non-profit entity to move the effort toward construction. That process will also including a marketing campaign, a financial model, and ways to integrate fiber routes into city and county development plans – an effort that could further cut costs.

That process will play out over the next six months.

“This study was the detailed look we’ve been waiting for,” said Ward 1 council member Bryan von Lossberg. “We’re heading into the budget season and are at a decision point with this. The next steps are the critical things for us to be considering. We’re now at a point where a non-profit entity could be created tomorrow.”

A similar effort is moving forward in Bozeman, where local banks have agreed to finance the network’s instillation. James Scott, vice president of First Interstate Bank in Missoula, said local banks may also be interested in financing the project as a means to boost economic development in the city.

However, he said, the project would have to present a funding model to ensure lenders are able to recover their investment. In other words, advocates must show that the customer base exists to support an open-access network.

“For this project to work, the banks will need to see some verifiable source of revenue moving forward for us to take a chance on this,” said Scott. “It’s still a speculative project, but we’re ready to sharpen our pencils and get to work.”

A portion of the fiber route could incentivize development in several urban renewal districts. The North Reserve and Scott Street district is set for growth, as is the area around Southgate Mall. Scott and others believe tax increment financing from such redevelopment districts could provide an incentive to encourage further investment.

“We’d hope to see some additional equity, in the form of urban renewal funds, or tax increment funds,” Scott said. “We’re all ready to try and push this project.”

But John Bemis with CenturyLink urged caution.

“We’re not fully opposed to some form of public-private partnership,” he said. “But there are some things we need to take a step back from and look at.”