Boulder moves to fund citywide fiber buildout through debt • Hacker News Board

Re: Boulder moves to fund citywide fiber buildout through debt

#61

Post by rayiner » Thu, Jun 14, 2018, 2:51 PM UTC

gonzo wrote: post #54

rayiner wrote: post #15

Some back of the napkin math. $140 million for 40,000 households in Boulder = $3,500 per household. If 50% of people subscribe (typical for municipal broadband), that's $7,000 per subscribing household, or higher than Charter's market cap per subscriber. A quarter of the population of the city is below the poverty line. If the intent is to offer them subsidized broadband, let's assume we get no capital recovery from…

$1.1m/year payback (20 years) $1,100,000/year, 40,000 households, so $27.50/year mean income per household to service the debt. If only 50% of households (you said people) subscribe, then $55/year mean income per household to service the debt. If, again, as you state, no capital contribution from households below the poverty line, then, using your math (which, btw, double counts these), we're talking $110/year, or $9…

That $1.1 million is just for the $15 million initial phase, not the $140 million full buildout.

Re: Boulder moves to fund citywide fiber buildout through debt

#62

Post by planteen » Thu, Jun 14, 2018, 2:51 PM UTC

bytematic wrote: post #12

tschellenbach wrote: post #6

I moved from Amsterdam to Boulder, CO. The tech ecosystem is amazing here. It's crazy how many tech companies are in a tiny city with ~100k people. You just walk down the street and it's Nest, Google, Github, JumpCloud, SolidFire, Logrhythm, VictorOps and hundreds of smaller startups. Great ecosystem. People are friendly and welcoming. It's amazing, except the internet. It's expensive, unreliable, and slowwwww.

I was going to say it sounds similar to madison but that is half the population! Would you say it is oversaturated with tech?

I think the difference between the two is that Madison is further from Milwaukee. It looks to be around 80 miles between Madison and Milwaukee. Denver and Boulder are much closer, about 30 miles.

Re: Boulder moves to fund citywide fiber buildout through debt

#63

Post by sigstoat » Thu, Jun 14, 2018, 2:51 PM UTC

dahart wrote: post #56

crunchlibrarian wrote: post #42

Earlier quoted context omitted.

Costs in Boulder are quite a bit higher than other cities because we have very little to no topsoil in areas, you hit bedrock (which is often granite) immediately, and you need to drill or blast that out for most underground construction. At least that was the line Google fed us when we got rejected for their fiber, who knows.

That could explain it. My fiber comes in from an above-ground wire strung on poles. They’re proposing to bury the lines, at high cost?

poles are uncommon in residential areas here, everything is buried. and digging is expensive.

Re: Boulder moves to fund citywide fiber buildout through debt

#64

Post by PTRFRLL » Thu, Jun 14, 2018, 2:52 PM UTC

dahart wrote: post #39

yock wrote: post #20

Earlier quoted context omitted.

Which makes for a pretty compelling reason as to why Charter hasn't done it themselves.

That, or maybe $140M is a gross over estimate, or is referring to more than what’s discussed in the article? I’m tending toward that; it can’t possibly cost anywhere near $10k per subscriber to build out fiber normally, even in small cities, can it? Seems like if it was normally that expensive, there wouldn’t be fiber anywhere. What’s so different in Boulder? I’d speculate that CenturyLink paid less than $1k to run f…

Fort Collins is in the midst of this right now, they proposed borrowing "up to 150 million" to roll their municipal fiber out. The cost break down is here, page 5.

https://www.fcgov.com/broadband/pdf/Broadband_Executive_Summ...

Re: Boulder moves to fund citywide fiber buildout through debt

#65

Post by rayiner » Thu, Jun 14, 2018, 2:52 PM UTC

numbsafari wrote: post #59

rayiner wrote: post #47

Earlier quoted context omitted.

That's about 10 million per year in debt payments for the full $140 million investment. If you assume that 50% of households subscribe, and the city subsidizes rates so no capital is recovered from folks below the poverty line, that's about $686/year per subscribing household. Which is crazy high--the non-subsidized ARPU will have to be $140 to break even. (Which is also not out of line--Verizon will barely break eve…

$100/mo for FTTH vs. $69/mo for 250MB/s Comcast? I'll take the FTTH and leave Comcast and Century Link behind, thank you very much. Would be even better if the City charged you for the fiber link and then let you select your backend provider. E.g., the way consumer choice works in the electric space. Let the city run/own the cable, and let the back-end carriers compete to provide the backbone and value-added services…

> $100/mo for FTTH vs. $69/mo for 250MB/s Comcast? I'll take the FTTH and leave Comcast and Century Link behind, thank you very much.

It's $100/mo only if you hit 50% uptake rate. If your uptake rate is only, say, 33%, because most people don't care about gigabit and would rather save the $30/month, your per-household cost shoots up (as does what you have to charge to recover the investment).

Re: Boulder moves to fund citywide fiber buildout through debt

#66

Post by julienchastang » Thu, Jun 14, 2018, 2:54 PM UTC

rayiner wrote: post #47

julienchastang wrote: post #33

Earlier quoted context omitted.

Repaid over twenty years, as I understand it: "A 20-year debt structure would require annual payments of $1.1 million from the city, according to staff estimates. That could be supplemented with money from the city's general fund and, perhaps, revenue generated by early customers of the fiber network." Though there is some math discrepancy since that would not cover the $140 million. Nonetheless, as a Boulderite, I a…

That's about 10 million per year in debt payments for the full $140 million investment. If you assume that 50% of households subscribe, and the city subsidizes rates so no capital is recovered from folks below the poverty line, that's about $686/year per subscribing household. Which is crazy high--the non-subsidized ARPU will have to be $140 to break even. (Which is also not out of line--Verizon will barely break eve…

So $200 million for the entire build out including debt costs? Your debt calculation assumes a Muni-bond rate of 4% which seems high to me. AAA muni bonds are more like 2.8%.

Re: Boulder moves to fund citywide fiber buildout through debt

#67

Post by dpark » Thu, Jun 14, 2018, 2:55 PM UTC

JumpCrisscross wrote: post #8

thelastidiot wrote: post #5

Once in a while a story about another city getting fiber, while it's fantastic (without knowing much about the cost), progress is slow and even in the heart of the Bay Area, we are pathetically lagging. https://fiber.google.com/newcities/ is looking sparse and honestly worrisome. It's amazing how much the US is behind implementing another solution they invented.

> It's amazing how much the US is behind implementing another solution they invented America is vast. My opinion is local FTTH networks will eventually be interconnected wirelessly, either point-to-point or by bouncing off LEO satellites. Sometimes, letting infrastructure roll out organically is the sounder solution.

Why bother interconnecting wirelessly? Long haul fiber is not generally the expense part. Most places already have fiber interconnects for whatever service is available.

Only the true boonies with no “fast” service don’t have fiber interconnects, and they probably aren’t dense enough for a local fiber network to make sense either.

Re: Boulder moves to fund citywide fiber buildout through debt

#68

Post by adventured » Thu, Jun 14, 2018, 2:55 PM UTC

volkk wrote: post #28

rb808 wrote: post #23

Earlier quoted context omitted.

That's bad, but also interesting that you can have the world's main tech region without much fiber to home. Maybe fiber isn't really that important.

> Maybe fiber isn't really that important. My gut feeling is that it is , but the current monopolies providing alternatives just haven't ruined the experience enough for this to be pursued heavily by people with deep pockets

What did Japan do with their vast broadband lead (which has now eroded entirely)? How did that dramatically benefit their economy? It didn't revolutionize their tech output, it didn't jump start their moribund economy.

Finland has been among the ten fastest nations in regards to broadband speeds for a long time. That didn't do much for their economy as it languished in a near ten year recession. It didn't spur an epic tech buildout, it didn't help them keep pace with what Sweden has accomplished for example, with the two nations having similar broadband speeds.

France has lagged extremely far behind in broadband, for two decades. They're among the worst in Europe at it. Does that mean their economy is doomed? They're well below Hungary, Bulgaria, Poland, and Russia in Europe regarding broadband. And yet there's Bulgaria, with a GDP per capita 1/6th that of France, and an economy that hasn't net expanded in ten years (off that much smaller per capita economic base, with far better broadband, you'd expect to see dramatic growth results, and yet there are none).

I think some healthy skepticism is warranted on the top end value proposition. Perhaps if you're down toward the bottom as in the case of France (in Europe), you do indeed suffer a meaningful penalty. Much of Latin America for example has very slow average Internet access speeds, I think that sort of outcome does harm their development potential. While common access to something like 50-100mbps cable may accomplish everything that 1gbps fiber does at this juncture for consumers and general economic development.

Maybe that will change soon, such that FTTH becomes invaluable to get ahead economically, there's practically no evidence that it matters currently or has mattered much the last ten years. I like the idea of muni fiber programs, more competition, and universal access to 1gbps to the home; and yet I've never seen any evidence that the high cost of rapidly building that out is justified (vs gradually over time).

Re: Boulder moves to fund citywide fiber buildout through debt

#69

Post by st26 » Thu, Jun 14, 2018, 2:56 PM UTC

LeifCarrotson wrote: post #43

JumpCrisscross wrote: post #7

Boulder has a population of about 110,000 people [1]. Given "the estimated cost of the entire network is around $140 million" [2], the per-capita cost of this network comes to $1,300. I pay $80 a month for my 300 / 20 service. In 16 months, I would be able to pay for my share of this network. [1] https://en.wikipedia.org/wiki/Boulder,_Colorado [2] http://www.dailycamera.com/news/boulder/ci_31941127/public-s...

As Rayiner commented elsewhere in the thread [1] Boulder has a population of 40,000 households , which is the appropriate metric to use when people within a household regularly share a connection. It gets more expensive when you consider non-subscribing households, subsidized households, and operating costs. Payback periods quickly climb to 10-20 years or more, depending on how you do your math. However, I think it s…

Kinda makes it sound like they've got too much road. Property taxes are only a thousand or three per single family household, I believe.

Re: Boulder moves to fund citywide fiber buildout through debt

#70

Post by tenaciousDaniel » Thu, Jun 14, 2018, 2:59 PM UTC

rayiner wrote: post #15

Some back of the napkin math. $140 million for 40,000 households in Boulder = $3,500 per household. If 50% of people subscribe (typical for municipal broadband), that's $7,000 per subscribing household, or higher than Charter's market cap per subscriber. A quarter of the population of the city is below the poverty line. If the intent is to offer them subsidized broadband, let's assume we get no capital recovery from…

I'm impressed by your math skills, but I used to live in Boulder and I'm shocked to learn that 25% live below the poverty line. Is that really true? I suppose it could be the fact that many are college students, but still. That seems high.