Responses to Questions and Comments from the Surveys
Q. Why is the city talking about adding staff when we should be cutting city staff?
A. Under the proposed agreement, network and ISP operation would be contracted out, and no staff would be added.
Q. Isn’t this outdated technology? I can get Internet service on my cell phone and speeds keep increasing. What about future satellite or wireless technologies?
A. Fiber networks are the state of the art for high capacity bandwidth. There are physical limits to the data transmission speed of wireless networks compared to light frequencies (the frequency of light is approximately 1,000 times the frequencies of the radio end of the spectrum). In addition, the point-to-multi-point systems used by cellular phone technology means that many subscribers share the available bandwidth. For these reasons, cell companies place limits on data usage. A typical wireless limit is 3 gigabytes per month. To put this in perspective, a gigabit per second fiber network can give the customer up to 42 terabytes (i.e., 42,000 gigabytes) per month.
Q. There is, and will continue to be, plenty of competition for Internet service.
A. Phone and cable TV systems have physical limitations that limit their capacity compared to a fiber-to-the-premises system. To have true competition, several complete fiber networks would need to be built, each connecting to every home and business. This would be inefficient, and as a practical matter, probably wouldn’t happen.
Q. I don’t want my taxes going to this.
A. The utility would be self-supporting and not subsidized by taxes. Only those using the service would pay for it.
Q. Don’t put the city into more debt.
A. The network would be owned and financed by a (local) private company. No city debt would be issued. There would, however, be a contractual obligation for a minimum level of lease payments, equivalent to a 35% subscription rate. The project would not go forward without commitments to subscribe by this number of residents.
Q. We need better infrastructure in other areas, especially streets.
A. This service would not compete for resources with other city utilities.
Q. Higher speeds only benefit businesses and gamers.
A. Bandwidth used by all households has grown steadily at an exponential rate. This trend has held consistently since the first days of the Internet.
Q. Will this include video service?
A. The current plan is to make video service from a third-party provider available at cost, for customer convenience. But as all video service migrates to “over-the-top” (i.e., accessed through the Internet), the ISP will assist customers in making the switch. And there are many other options for legacy video services: Comcast, satellite service such as Dish and Direct TV, over-the-air broadcast, and for some residents, TV service offered by the phone companies (Frontier and CenturyLink).
Q. So what would my total bill be, if I wanted traditional video and phone service in addition to Internet service?
A. This would be subject to negotiations with third-party providers, but current estimates are that the total cost for gigabit Internet service plus phone and video service would range between $80 and $146 per month, depending on the provider and number of channels (the higher figure is for 135 video channels).
Q. I've heard there are already miles of fiber installed in Lake Oswego. Why do we need more?
A. Fiber is not like a water line that you can tap into. To provide fiber optic service to all Lake Oswego homes and businesses would take over 18,000 individual strands of fiber, as part of a network designed for a fiber broadband system. Except for Frontier's FIOS system on the far western edge of Lake Oswego, no such network exists in the city.
Q. How was the private partner chosen?
A. In the spring of 2015, the City solicited letters of interest from potential private partners. Five firms or teams submitted letters of interest. In May, 2015, a pre-proposal conference was held with these firms to go over the draft Request for Proposals (RFP). The RFP was issued on June 1, with proposals due on July 31. Two proposals were submitted, from SiFi Networks and from a team consisting of Lake-Oswego based Sunstone Business Finance, OFS, and Calix. A selection committee made up of staff and Lake Oswego residents with experience in technical fields rated the two proposals, and recommended the proposal from Sunstone as the best overall. This recommendation was discussed by the City Council in a study session on October 13 and formally approved on October 20 (see the study session staff report).
Q. What about plans from the cable company and phone company to provide fiber Internet service?
A. One of the letters of interest (noted above) was from CenturyLink, the franchised telephone utility for most of Lake Oswego. The Request for Proposals was structured to encourage proposals from both CenturyLink and Comcast. Companies could proposed an option in which the company would retain ownership of the network, and agree to make service available to all homes and businesses in the city. They would commit to a retail price, and were free to propose annual inflation factors and the term of the price agreement. In a letter stating they had decided not to submit a proposal, CenturyLink stated, "CenturyLink's current plans, however, do no anticipate a citywide deployment." Comcast did not submit a letter of interest or proposal, and has not indicated any plans to make gigabit fiber-to-the-premises service available to all homes and businesses in Lake Oswego.
Q. I read somewhere that this network would only provide "dark fiber."
A. This is incorrect. Full gigabit-per-second Internet service would be provided to all homes that connect to the system. This is referred to as "lit fiber," not "dark fiber."
Q. I heard that only 34.7% of the residents polled said they would definitely or probably sign up for the service.
A. The survey firm found that, when asked if they would subscribe to the Internet service at $59.95/month, or if their total bundled cost (including video) stayed the same, a total of 61% or the respondents stated they would definitely or very likely subscribe, and a further 23% said they were somewhat likely to subscribe. The survey firm (Pivot) then applied "overstatement" factors to provide a more conservative estimate of how many people would actually follow through; this is the source of the 34.7% number. The firm also noted that a subscription rate of 37.2% could be achievable based on their analysis of the data. Even if the City decides to proceed with the public-private partnership, the project would not go forward until signups (secured with a deposit) reached a threshold target to ensure the project would be financially viable.