(TNS) — A publicly financed fiber network spanning Multnomah County, Ore., would cost $1 billion, according to a new study, a price tag that could make it prohibitively expensive even if it’s technically possible.
The county-sponsored study sought to quantify gaps in broadband service across the county and identify possible ways to close those divides. It concluded a countywide network could pay for itself if enough customers sign up, but warned of considerable financial risk if subscriber numbers don’t meet targets.
The $250,000 study found that smaller, more targeted networks would be far less expensive but would be less efficient – and likely would require significant government subsidies.
County leaders who floated the possibility of building the nation’s largest public Internet service two years ago showed little enthusiasm for the project when discussing the new study Monday. “It has delineated just how complicated just how complicated and expensive the idea would be,” said county Commissioner Sharon Meieran. Commissioner Lori Stegmann suggested the county should look in other directions.
“There are less expensive options we could implement more quickly,” she said.
Residential Internet systems are very expensive to build because they require running wires to each home. That means markets are typically dominated by one or two providers, and less competition often produces higher prices.
That can leave poorer households with substandard service – or none at all. The effects of that disparity are especially acute during the pandemic, when households across Oregon are dependent on fast Internet service for work and school.
Publicly owned networks provide a tantalizing alternative, but local governments may lack the technical expertise to build or oversee their own projects. And any finished network must win customers away from established providers, like Comcast, which may lock subscribers into long-term service contracts that prevent them from switching.
Multnomah County commissioned its study last year, splitting the cost with Gresham, Portland, Wood Village, Troutdale and Fairview. Its findings were no surprise: Portland once contemplated a citywide fiber network but abandoned the notion when its own 2007 study pegged the total cost at $500 million.
The new study issued Monday, from consultant CTC Technology & Energy, found Internet service is nearly universal throughout Multnomah County. Ninety-six percent of homes have some form of home Internet access.
But low-income households are much less likely to have connections, and the costs represent a disproportionate burden on those families.
“There is a digital equity gap in Multnomah County,” Meieran said. Internet service has proven indispensable during the pandemic, she said, so it behooves Multnomah County to find a viable path to expand access.
One possibility: the county’s consultants found Multnomah County could set up free public Wi-Fi connections in 600 public locations for about $3 million.
However, there is some evidence that public networks can be viable in smaller communities that require lower capital outlays.
Hillsboro is currently building Oregon’s largest municipal fiber network, wiring up schools and homes in hopes of creating an affordable alternative for residents. It plans to launch service in some areas next month.
The city has committed $28 million its HiLight service. It has already wired local schools and plans to begin serving homes in the Shute Park neighborhood and the new South Hillsboro development in November.
The city says there are 1,700 residential and commercial addresses within the initial service area, which will come online more than two years behind Hillsboro’s initial schedule. The city has a 10-year buildout plan to serve every home in its jurisdiction.
HiLight will charge $55 a month for superfast 1 gigabit service, a third less than what Comcast advertises for similar speeds. (Comcast’s price is a short-term, promotional discount.) Hillsboro also plans to offer discounts to low-income households, at $10 a month for gigabit service.
That’s the same as what Comcast charges for its low-income plan, but its speeds are limited to 25 megabits per second, 98 percent slower than Hillsboro’s corresponding plan.
©2020 The Oregonian (Portland, Ore.) Distributed by Tribune Content Agency, LLC.