Privately owned broadband for city is moving ahead

Excerpts from the blog

Seattle will formally ask companies in September for proposals to construct a fiber-to-the-home broadband network, a project that would challenge the Comcast-Qwest lock on the market.

But at least one City Council member Wednesday questioned whether Seattle should give more consideration to managing the system itself, rather than simply offering its assets to subsidize the $450 million project.

Twenty years down the road, Seattle could end up in the same situation it's in now, said Bruce Harrell, chairman of the city's Energy and Technology Committee, which was briefed on the project Wednesday.

"I was wondering if we would have created another another monopoly ... and we're not going to be the ones that own it," Harrell said.

He also asked what transpired between 2005, when the idea of a city-backed broadband network was endorsed, and 2008, when the Mayor's Office had decided that the city's objective should be helping a private company create the system.

During that time, the city solicited interest from companies, then did market-feasibility research.

The study estimated that a $450 million network financed with 18-year bonds would be successful even if the system was used by only 24 percent of homes and businesses.

At the end of the bond period, consumers would have saved more than a $1 billion in rates and the city would have $129 million in cash from operations.

The system envisioned would offer speeds of 25 megabits per second residential broadband service, which is fast enough for multiple streams of high-definition video and more than double the speed of Comcast's best service.

Despite Harrell's politely worded questions, it sounds as though the matter is out of the council's hands, and the Mayor's Office is moving ahead with the privately owned approach. Among the companies that have expressed interest is Paul Allen's investment company, so perhaps someone else is really pulling the strings.

It also emerged Wednesday that the mayor asked City Light to explore the possibility of providing broadband service, but nobody in the room could say exactly when that study will begin, what bearing it will have on the proposal process and whether it will be done before the city partners with a private company.

The head of City Light gave the previous presentation, but left before the broadband discussion. The city's chief technology officer, Bill Schrier, characterized the City Light study as a "parallel effort."

In response to a question about the city's experiments with municipal Wi-Fi service, Schrier said they won't be expanded because there is so much privately owned Wi-Fi service being developed.

"We saw no reason for the city to expand those because the private sector is fundamentally taking over that market," he said.

It didn't come up in the meeting, but Harrell's comments echoed the concerns of Tim Nulty, who developed a publicly owned broadband system for the city of Burlington, Vt. Nulty set up a financing deal comparable to a mortgage, where the system was privately financed.

In a January story in Vermont's Business People magazine, Nulty said fiber-to-the-home networks are a "natural monopoly" that should be government owned or regulated. An excerpt:

"He likens his fiber-optic superhighway to a more commonly understood network. 'Nobody thinks twice about the roads being in the hands of the public,' Nulty says. 'The thought that a private company could own the roads and charge whatever they pleased to anybody who goes on them is ludicrous anywhere in the world. That's what this is: the public roads.' "

In the game

Traffic to WildTangent, the Redmond game network, leaped 35 percent from January to February, putting the site on comScore's list of the top 10 fastest growing U.S. sites.

WildTangent boss Alex St. John had a quick answer when asked about what's going on.

He said WildTangent has been surging as games with huge audiences join its advertising and distribution network. The jump registered by comScore was the result of adding "Adventure Quest," and he's expecting to show even better on upcoming monthly reports.

"It's very likely that we'll be the world's largest gaming network by the end of the year," he said in the e-mail.

This material has been edited for print publication.

Brier Dudley's blog appears Thursdays. Reach him at 206-515-5687 or bdudley@seattletimes.com.