LAKELAND — Lakeland officials have a choice to make about establishing a connection that could bring a new high-speed internet provider to the city.
City commissioners will vote on a contract with Orlando-based Summit Broadband Inc. that will create create a private-public partnership for broadband service. The meeting is scheduled for 9 a.m. Tuesday. City Manager Shawn Sherrouse presented the proposal to commissioners the first time at Friday’s agenda study.
“This is an exciting opportunity for all of us, if this is approved, with the opportunity to not only gain more speed but to be future-proofed, which is imperative,” Mayor Bill Mutz said.
The proposal is for an initial 10-year contract between the city and Summit, with an automatic 10-year renewal providing that service provider upholds its agreement.
Summit Broadband has agreed to invest $20 million within the next five years to build out the city’s broadband network to provide internet services to residential, commercial and wholesale customers. The company will be the “exclusive” marketing and sales agent for Lakeland’s existing roughly 350-mile dark fiber network, or a city-owned fiber optic conduit leased out to private entities to make their own connections, and handling retail services for new customers.
Summit has also agreed to to contribute at least $20,000 annually for the first 10 years, or a total of $200,000, toward bridging the digital divide in Lakeland. This may take many forms including contributing to the city’s SurfLakeland grant, that help provide free wireless internet service in needed areas of the city or aiding customers, according to Kevin Coyne, CEO of Summit.
In exchange, Lakeland will receive the 10% of Summit’s gross revenue from internet service, or at least a minimum of $144,000 a year. Under the contract, the city has the right to audit the provider’s financial records to ensure it receives a fair amount.
“There is a return, but it’s not a giant windfall,” Sherrouse told commissioners. “We want to build a partnership that brings high-speed service to the community so the community can thrive, while bringing in greater competition to the market, better services and better rates. If that’s what we accomplish and a financial return, it’s a success.”
Lakeland will keep ownership over its existing dark fiber network and is expected to keep up with maintenance. It will retain at least 30% of the existing fiber, or a minimum of two strands, for the city’s business purposes.
Sherrouse told commissioners one caveat, not written in the contract, is the city will spend up to $250,000 a year in maintenance for the next five years to help support Summit’s startup. These funds would be in addition to the roughly $1.2 million a year Lakeland Electric spends on the city’s network now.
Lakeland will be allowed to keep providing broadband services to its existing nine dark fiber customers, which include Lakeland Regional Health and Polk County Public Schools. This currently nets the city about $534,000 a year, according to Oscar Torres, the city’s director of information technology.
Summit would have the rights to service any new customers or facilities seeking to use the city’s dark fiber. Commissioner Stephanie Madden, chair of the city’s Broadband Taskforce, said Lakeland Regional Health’s new Center for Behavioral Health and Wellness that is under construction would be considered a new facility, and if it desired to be on the same network as the hospital, would be considered a Summit customer.
“We’ve excited about this partnership, we look forward to getting moving,” Coyne said of Summit.
Coyne said that 13 locations have reached out to his company looking for 100 gigabit internet. Summit is ready and willing to sign those contract and begin laying fiber as soon as they have a contract signed with the city. On the residential side, he said Summit will spend a lot of time in the first year building out to about 20,000 homes, and it hopes to capture a 40% market share within three years.
If the partnership should break down, the city does have at least three ways out of the contract: if the company does not make its annual revenue payment to the city, if Summit does not invest at least $20 million in five years, or does not contribute at least $20,000 per year to closing the digital divide.
Sara-Megan Walsh can be reached at [email protected] or 863-802-7545.