LAKELAND — Lakeland hopes to move one step closer to becoming a gigabit city this month.
Lakeland city staff have been in lengthy negotiations with Summit Broadband Inc. out of Orlando to create a private-public partnership to bring high-speed internet to the city since last August. City Manager Shawn Sherrouse told The Ledger he anticipates a proposed contract will go before city commissioners for approval soon.
“We expect to hear a final decision on all pending issues by June,” Mayor Bill Mutz said last month. “The commission’s interest is in getting this done.”
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Commissioner Stephanie Madden, chair of the city’s Broadband Taskforce, said negotiations have “gone on longer than anyone expected.”
One of the key issues is Summit made the assumption that the city’s roughly 360-mile fiberoptic network, or dark fiber, contained 72 strands, according to Madden. In fiberoptic networks, the greater number of strands increases the number of connections made and volume of information that can be shared. As part of negotiations, the city had to conduct an audit of its fiber network.
“We knew that was too much,” Madden said. “In some areas we have less than six strands.”
Lakeland officials already rely on the city’s dark fiber network to conduct daily operations from internet to running traffic cams and red-light cameras.
The city also leases dark fiber to several large organizations, including Lakeland Regional Health and Polk County Public Schools, bringing in about a half million dollars in revenue a year, Madden said.
“We want to keep those dark fiber customers,” she said. “Whether those customers, if they expanded, will be considered Lakeland or Summit customers in the future, we’ve had to get into those nitty gritty details and it’s slowed the process down so much.”
As negotiations have dragged on, there have been signs posted around Lakeland about Verizon Fios expanding its coverage area in the city. Madden said she is concerned about what the increased competition could mean for the city’s deal.
Summit was the top ranked of eight companies who responded to the city’s request in March 2020. Summit submitted a 162-page document outlining how it would be willing to invest more than $60 million to build a network using the city’s existing fiberoptic network as a backbone.
Under the original proposal, Summit would pay the city $12,000 a month — generating $144,000 in annual revenue — to lease all its remaining dark fiber capacity.
In addition, Summit would give the city 10% of all the broadband service revenue, not including any customer’s one-time payments or fees. The company estimates this would amount to $170,000 in the first year, growing to $1 million in four years and $12 million by year 10.
Unlike prior broadband options considered, Lakeland was not asked initially to lay out any funds for capital improvements, construction or operating the internet service. It’s not clear how much this may have changed during negotiations.
Mutz said if city staff and Summit are unable to reach a tentative contract this month, he would be willing to open the issue for further to discussion about pursuing a broadband partnership.
“We have to get broadband deployed,” he said.
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The mayor said he would advocate for the city to consider opening negotiations with other companies, including MetroNet out of Evansville, Indiana, and Hotwire Communications out of Fort Lauderdale.
Mutz said he sees accessibility to high-speed internet throughout the city as a necessity, not to be technologically ahead of competitors but to prevent Lakeland from falling behind other cities.
“One gig internet capacity for a consumer will soon be the baseline,” he said. “When we have the internet of things expanding at the wildly vast rate it is, many people don’t fully utilize the latest technology so they don’t recognize how much automation in the home is obtainable.”
Broadband internet is being seen much more as a utility, similar to water and electricity, according to Mutz. City commissioners have recognized after several studies that this is not a utility that Lakeland will invest in. The city has been exploring operating a gigabit-speed internet service since 2015.
“The investment costs to do it alone we would have had to raise property taxes or even bond out millions of dollars required to do it,” Madden said. “There was not an appetite.”
The city’s latest July 2019 study estimated it would cost $80 million for Lakeland to build a fiberoptic internet network within the city limits. That’s $30 million less than the 2016 estimate provided by Magellan Broadband, the city’s outside consultant.
Commissioners were presented with two alternative plans to bring broadband to Lakeland in 2019: Build a larger broadband network incorporating all of Lakeland Electric’s service area for about $216 million, or build an internet network by “fiberhoods,” or an incremental approach based on interested communities where the initial startup costs could be as low as $17 million.
The commission decided that neither was truly a viable option, Mutz said, unsure such an enterprise would be profitable in the long run.
“We want to focus on what cities do well, focus on infrastructure that we can provide and utilize the private sector for what it can do more cost effectively like improving and providing customer service,” he said.
Sara-Megan Walsh can be reached at [email protected] or 863-802-7545.