City commissioners voted 5-to-1 Tuesday morning to approve a contract with Orlando-based Summit Broadband Inc. to create a private-public service for broadband service. Commissioner Mike Musick was the sole dissenting vote.
“I think this is the right move for the City of Lakeland as it will accomplish what was my goal: to make it a smart city without the burden of bonding out our debt,” Commissioner Bill Read said. “The private sector can do a job much better than any public entity, better than our city.”
The city will enter a 10-year contract with Summit Broadband, with an automatic 10-year renewal providing the internet service provider upholds its end of the deal.
Summit Broadband has agreed to invest $20 million within the next five years to further build out the city’s roughly 350-mile dark fiber network, or fiberoptic conduits leased to private entities to make their own connections. By doing so, the company will be able to provide high-speed internet, video and communication services to residential, commercial and wholesale customers.
“We are excited about this opportunity to future-proof your community,” Kevin Coyne, CEO of Summit Broadband, said. “We will bring speeds up to 10 gigs symmetrical.”
Coyne said his company has already purchased space in CoreLogic, the largest data center in Lakeland, and has ordered equipment to begin setting up its local network. It expects to begin providing services to its first customers within 120 days, according to Coyne.
Among the first to be signed up for Summit Broadband’s services will be Pastor H.B. Holmes Jr., of Rhema Word of Faith International, who has been a longstanding community advocate looking to bridge the city’s digital divide.
“I think this city has chosen the right partner, and I was a little skeptical at first,” Holmes told commissioners. “I want to make sure people we have along Martin Luther King Jr. [Ave], 5th Street, Combee Road and Lake Hollingsworth need to have quality broadband to enable them to compete in this competitive world.”
The pastor and commissioners alike recognized that the COVID-19 pandemic has shown how critical broadband services are to using telemedicine, students on remote schooling and employees working from home — and where there are gaps in city’s service coverage.
Summit Broadband’s first customers will be approximately 13 minority-owned businesses, ranging from small to medium in size, according to Coyne. Each has been identified as lacking the internet service and speed necessary to truly help their businesses flourish.
The company has also agreed to contribute at least $20,000 annually for the first 10 years, or a total of $200,000, toward bridging the digital divide in Lakeland. This may take many forms including contributing to the city’s SurfLakeland grant, which helps provide free wireless internet service in needed areas of the city or aiding customers.
Coyne said Summit Broadband has plans to build out to approximately 20,000 residential homes as soon as possible, with hopes of capturing 40% of that market within the next three years. He was however hesitant to quote a figure on how much Summit’s high-speed internet service would cost per household.
“When you look at your current service provider, my guess is it will be less than them,” Coyne said.
Lakeland will receive the 10% of Summit’s gross revenue for internet services, or at least a minimum of $144,000 a year. Under the contract, the city has the right to audit the provider’s financial records to ensure it receives a fair amount.
Lakeland will keep ownership of its existing dark fiber network and is expected to keep up with maintenance. It will retain at least 30% of the existing fiber, or a minimum of two strands, for the city’s business purposes.
One caveat, not written in the contract, is the city will spend up to $250,000 a year in maintenance for the next five years to help support Summit’s startup, according to City Manager Shawn Sherrouse. These funds would be in addition to the roughly $1.2 million a year Lakeland Electric spends on the city’s network now.
Lakeland will be allowed to keep providing broadband services to its existing nine dark fiber customers, which include Lakeland Regional Health and Polk County Public Schools. This currently nets the city about $534,000 a year, according to Oscar Torres, the city’s director of information technology. Summit would have the rights to service any new customers or facilities seeking to use the city’s dark fiber.
Musick’s dissent was based on the overall 20-year length of the contract and possible long-term impacts.
“I can’t get past a 20-year deal,” he said. “That’s a long time to work with somebody.”
Musick said he also fears that by creating a public-private partnership in which Lakeland appears to back, or be behind Summit Broadband, it will create an unequal advantage in the free market that may negatively influence other companies’ decisions whether or not to offer services in Lakeland.
Joel Ivy, Lakeland Electric’s general manager and a member of the city’s negotiation team with Summit Broadband, said it's not unusual for the city to have long-term contracts or arrangements. Ivy said it was a “struggle” to find a position where Summit agreed to make an investment in the city’s fiber, but could still make a return on investment.
“We felt good about a 10-year renewable term with all that has to happen in the first five years,” he said. “If they don’t, we can cut and run.”
If the partnership should break down, the city does have at least three ways out of the contract: if the company does not make its annual revenue payment to the city, if Summit does not invest at least $20 million in five years, or does not contribute at least $20,000 per year to closing the digital divide.
© 2021 The Ledger (Lakeland, Fla.). Distributed by Tribune Content Agency, LLC.
