Google Fiber, owned by Google parent Alphabet, would become the second tenant on Utilities' planned 2,000-mile network, which is expected to get underway this summer and be available to its first residential customers early next year. Ting Internet became the first tenant when it signed a 25-year lease late last year, allowing Utilities to speed up construction from 15 years to six years and helping to offset some of the up to $100 million annual construction cost.
"We think the population there [Colorado Springs] has a high demand for super fast broadband service. We believe it is an environment where our service will be well-received," said Mark Strama, general manager of expansion for Google Fiber. "We want affordable high-speed Internet broadly available and believe people will respond well to our offer. Colorado Springs Utilities has accelerated the availability of high-speed Internet through this investment."
Brian Wortinger, Utilities' fiber-optic and telecommunications enterprise manager, said "several" Internet providers are interested in leasing part of the network, but he declined to say how many or identify them. He expects leases from providers like Ting and Google to offset a "significant part," if not completely offset, the cost of building the network. Utilities plans to seek bids later this week from contractors who would build the network.
"We hope to reach agreement with all of the interested parties" wanting to provide Internet service on Utilities network, Wortinger said. "We will evaluate each one to see what best serves the customers' interest. We would be happy to have as many as can reach a [lease] with because it lowers the cost of construction. The cost of building the network is substantial, but the cost of adding fiber for each tenant is far less."
Utilities has operated an internal fiber network for 30 years, and is expanding that network to help it monitor and better provide water and energy to its customers. The city-owned operation signed Ting and other Internet providers to leases to help pay for construction costs and make high-speed Internet service available to residential and business customers citywide.
Google Fiber provides fiber-optic based Internet service in 12 cities in nine states since launching the service in Kansas City, Mo., and Provo, Utah, a decade ago. The Internet unit expanded to nine other cities in four years before slowing its expansion in 2016, and earlier this year added Des Moines, Iowa — its first new market in six years. The company also provides high-speed wireless Internet service to office buildings and apartment complexes in Denver and eight other cities in six states.
The company began looking at expansion about a year ago after spending five years focusing on operations in the first 11 cities, Strama said. About a year ago, Google Fiber began looking at potential expansion locations, including Colorado Springs. He said the company plans to hire "dozens of people" in Colorado Springs to handle installation, repair, sales, service and other roles for local customers.
Texas-based Underline Infrastructure is building fiber-optic networks in Colorado Springs and Fountain that will offer download and upload speeds of up to 100 gigabits per second. The company hopes to connect its first customer in Colorado Springs by early May and begin construction on the Fountain network next week. Underline's Colorado Springs network would compete directly with Colorado Springs Utilities.
Google Fiber charges $70 a month for 1 gigabit-per-second download and upload service and $100 a month for 2 gigabit-per-second service with no extra monthly fee for a modem. Business rates are $100 for 1 gigabit-per-second service and $250 for 2 gigabit-per-second service. Those fees are somewhat less than existing Internet providers for similar service but $5 more than the cost of Underline's service.
"By introducing competition into the market, customers will get better prices and faster [Internet] speeds. That applies not just to our customers but also to customers of our competitors who also will get better prices and faster speeds," Strama said.
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