Santa Fe, N.M., frustrated with what it considers slower broadband speeds than surrounding communities like Albuquerque, is launching a $1 million municipal fiber optic network to increase both broadband access and competition among existing service providers.
The move comes as New Mexico legislators mull a bill to ban municipal networks. A big reason for the move: The city's residents pay the same average monthly rate for Internet service as Albuquerque residents but get only half the speed, the Santa Fe New Mexican reported.
The city wants to create a new company, probably to be called SF Fiber, to sell wholesale space on fiber lines that would run parallel and independently from a CenturyLink (NYSE: CTL) downtown exchange to a fiber hut. This would give providers an alternative to CenturyLink's line, according to Sean Moody, project administrator with the city's economic division and leader of the Internet project.
Moody characterized CenturyLink's service as "unregulated and uncompetitive," especially since it offers city residents only 5 Mbps service (at $50 a month) compared to the 10 Mbps available for the same price in Albuquerque.
CenturyLink, not surprisingly, does not agree with any of this, with a CenturyLink spokesman pointing out that residents have multiple choices, including cable provider Comcast (NASDAQ: CMCSA). Businesses, though, are another story and that's the area from which SF Fiber would draw most of its customers.
"More broadband is the way of the future," one of those potential business customers, Jason Hool, president of Santa Fe Studios, told the newspaper. "It's key to all of our clients and that's only going to continue."
CenturyLink thinks it's already doing the job and that Santa Fe has no business stepping in.
"While we believe that public broadband networks that compete directly with private industry are not the best use of taxpayer dollars, we support government initiatives to leverage existing infrastructure and extend broadband service to unserved areas," CenturyLink spokesman David Gonzales said in a statement that included the assertion that CenturyLink already pays "hundreds of millions of dollars every year" to provide broadband throughout the country.
Local ISP Cyber Mesa has been tabbed to honcho the project and to create a data center that will serve as another independent port to provide wider Internet access. In appointing Cyber Mesa, the city ticked off competitor City Link, which is threatening legal action because it claims to have more experience in the field.
"Jane has a nice company (but) that doesn't mean that they're the right organization for this job," City Link owner John Brown said in the newspaper.
The city's move into the broadband space got thumbs up, with a qualifier, from Christopher Mitchell, director of the Community Broadband Networks Initiative of the Institute for Local Self-Reliance.
Incumbent telecom companies, he said, serve as gatekeepers to Internet access and speeds.
"The city is trying to rectify it and that makes sense," Mitchell said. "It's a good first step but it can't be the only step" because companies such as Comcast and CenturyLink "have a lot of power to run competitors out of the business."
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