With the council's unanimous (9-0) vote of approval on Thursday night, the city manager can now enter into an agreement to allow ALLO Communications LLC to lease part of the city's fiber backbone for 20 years. Under the new agreement, ALLO, a telecom company serving more than 1.2 million customers throughout Colorado, Nebraska, Arizona and Missouri, is set to offer broadband service to 80% of the city by 2028 and 97% of the city by 2030.
The agreement is expected to deliver broadband service with discounts for low-income homes, free service for certain nonprofit organizations and complimentary service upgrades for students. Under the lease terms, ALLO also will be required to maintain a brick-and-mortar store in Boulder that people could access via public transit.
The lease deal is worth an estimated $9 million in revenue for Boulder. ALLO must pay Boulder a $1.5M upfront lease payment plus ongoing fees and also give the city a cut of its wholesale lease revenue. The city will receive $2.25 per residential and $9 per business customer per month plus 1.5% of revenue from any wholesale lease.
The ALLO broadband service would not extend to unincorporated Boulder County, since that is not part of the city of Boulder's jurisdiction. The city can't compel ALLO to provide service there. But if Boulder annexes land into the city, then ALLO will need to make "commercially reasonable efforts" to provide service to those areas within two years of construction or availability, according to the lease agreement.
The push to provide community broadband service in Boulder has spanned several years. The City Council committed to ensuring citywide, affordable broadband service for Boulder homes and businesses in 2018, and it approved the construction of a $20 million fiber backbone. Construction of the backbone finished this year.
At an August 2023 council study session, city staffers had proposed three potential pathways forward. The city could own and operate its own municipal Internet utility, co-own the utility in partnership with a private company while letting the company handle operations, or allow a partner company to own and operate the utility.
Staffers had advised council members to let a partner company own and operate the Internet utility, which they estimated would be a less expensive, lower-risk and quicker path to service than the other options. That option would also let the city own its fiber backbone but lease it out to the partner company as well as to other parties.
The council opted for that course of action, but some council members were less than enthused about letting a private company own and control the Internet utility. They said at the time that city officials had set the expectation that it would provide broadband service. Some on the council also said they wanted to make sure the service would meet the community's needs.
Still, in October 2023, the council authorized the city manager to negotiate a lease agreement for the fiber backbone with a private Internet service provider. After considering its options, the city chose ALLO as a service provider because officials believe the company can meet city objectives such as citywide access, equitable and inclusive service coverage, and net neutrality.
Council members spoke glowingly of the broadband lease deal at Thursday night's meeting, although some said they still wish the city could have provided municipally owned broadband service.
Councilmember Matt Benjamin praised the deal, saying, "This is a long time coming. The community said, 'Hey, we want to do this, and here's some money.' And we made it work," he said.
"We had a laundry list of asks, and this really is an impressive negotiation," said Mayor Pro Tem Nicole Speer. She added that, while she is "a little bit nervous" about bringing a for-profit company into the mix, the city didn't have the funds to offer broadband as a public service, and staffers did a good job of "finding a middle ground and making sure that our community is looked out for."
Councilmember Lauren Folkerts said she also still wishes the city were pursuing municipal fiber Internet. Folkerts said she feels it should be owned and operated by the community, but she sees the agreement with ALLO as a "strong option" for Boulder.
"This will give us the opportunity to move forward with the much-needed faster Internet for the community on a faster timeline," she said.
Now that the council has approved the lease agreement, work could start next year on construction, service delivery and network design, members said.
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