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Palm Coast Thursday, Jan. 10, 2019 5 months ago

City looks at options for future of FiberNet network

The city is considering adding a private partner to expand its fiber-optic cable network.
by: Jonathan Simmons News Editor

Imagine it’s 2025 and you’re a young professional looking to start a home-based business or a technology company. You could do it from anywhere, provided you could get a fast enough internet connection. Might you consider basing yourself in Palm Coast?

City Councilman Nick Klufas wants to make sure that you would — and that means having top-of-the-line high-speed internet availability.

The city of Palm Coast has its own high-speed fiber network called FiberNet, and is looking at options to expand it so that it could serve more businesses, and, potentially, residents.

“It represents one of the only opportunities for the city to increase our revenue without raising taxes, and ... it’s profitable for the city operating today,” Klufas said. “Having quality broadband internet access is the bloodline to technology. If we don’t provide that, then the opportunity for technology companies to relocate here or to start here doesn’t exist.”

Right now, the city has 54 miles of fiber and 124 connections to its system, including city facilities and traffic signal cabinets, certain government connections by the school district and Flagler County Sheriff’s Office, and about 45 private businesses.

The network is both a money saver and a money maker for the city, which started planning the network in 2004.

The city saves an estimated $310,000 a year in internet costs by using its own system, according to an analysis presented by Magellan Advisors at a City Council workshop Jan. 8, and it makes more than $100,000 after covering costs, for a “positive net impact” of about $410,000 annually from the system, according to the Magellan report.

The question is what to do with it next. Klufas has been a longtime champion of FiberNet, which figured prominently in his campaign for office.

He could imagine a public-private partnership in which a private company would cover some of the upfront costs of expanding the system and linking it to individual customers. As things are, the city has main fiber lines, but customers cover the cost of the final link reaching from that main line to their property. There are hundreds of businesses that are sitting atop the fiber network and  could potentially use it. FiberNet could also be used to offer internet to residential areas through wifi at the street level. 

And the city, as an emerging market, is somewhat underserved from private internet companies, with just two of them — Spectrum and AT&T — offering broadband.

“We were presented with the opportunity to do this ourselves because of the lack of options, and that’s why we connected all of our city buildings,” Klufas said. “The infrastructure just wasn’t there; the private market wasn’t providing the infrastructure.”

The council brought in Magellan to help advise it on what to do next with the network, including possibilities for a private-public partnership that the city is referring to as the “P3” strategy — which Magellan supports.

Addressing the council at a workshop Jan. 8, Magellan Advisors Chief Operating Officer Courtney Violette presented a 145-page report by Magellan, which has supported about 400 cities with their broadband efforts in the past.

Magellan, the report states, advises a “crawl, walk, run action plan for FiberNet 2.0,” with the city closing bottlenecks and gaps in the network, hooking up underserved businesses with a focus on high-density business areas, determining how FiberNet can be a platform for entrepreneurs, and seeking a private partner to help and to serve as network operator and FTTP services provider.

It also recommends that the city expand its wireless infrastructure and its virtual services, through software applications and data.

But the biggest savings for the city would come if it decides to connect more of its own infrastructure, particularly its utility, traffic and lighting infrastructure, through fiber, the report states.

If the city connected just half of its prospective devices through a third-party network service provider like a cell phone company, it would be facing around $5.5 million in annual recurring charges, according to the Magellan report.

If it were able to use its own infrastructure instead, that would be a savings that could exceed $100 million over 20 years.

The city could also, as Klufas envisioned, entice business to the community by offering high-speed internet, driving economic development.

“Generally, the opportunity is to use design-oriented development events as a means to draw diverse, tech-savvy, young persons to Palm Coast, then to implement what they design,” the Magellan report states. “Bureaucratic inflexibility may be a barrier to this opportunity, and to associated opportunities from regional growth and technological innovation. Top-down, exclusive approaches probably won’t work. Open, inclusive approaches are better.”

Mayor Milissa Holland said she could see FiberNet being a major driver of innovation and opportunity, and said the city could also consider looking for grants to expand it.

“We’re primed for growth, land-mass wise,” she said. “We know that, frankly, we’re not taking advantage of this great asset that we have. ... This type of opportunity is transformative in our community.”

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