Denver City Councilman Paul Kashmann estimates as much as a fifth of Denver’s homes are without high-speed internet, a serious gap in coverage during the work-from-home and online education era sparked by the novel coronavirus pandemic.

So Kashmann led a push to ask city voters to approve a November ballot question that would allow Denver to enter the internet provider business. It’s a move that could cost an estimated $1 billion and take years to complete while putting the city in direct competition with Comcast and CenturyLink.

Historically in Colorado referendums on local government internet pass with flying colors, though not without opposition from private internet providers.

There are less expensive and more immediate options city officials would consider first, Kashmann noted. But the conversation must first start with Denver voters.

If the referendum is approved, city officials could discuss new options such as following Longmont or Fort Collins by providing municipal internet. Or the move could offer Denver leverage in negotiations with current providers like CenturyLink or Comcast, he said.

“It may be that we ask them to lower their rates or somehow there’s a subsidy for lower income folks,” Kashmann said.

The end goal is the same, no matter the avenue, he said. High-speed internet should be treated like a basic utility.

“You can’t build an apartment without a bathroom, without electricity, without running water,” Kashmann said. “This is at that same, basic level.”

Opting out

The ballot question in November asks voter to allow the city to opt out of a 2005 state law restricting governments from from using tax dollars to build broadband networks. Already more than 100 Colorado cities have opted out of the law. In 2017 a batch of 19 cities opted out in the same election cycle, with an average approval rating of about 83%.

And the referendums don’t get passed without a fight. Longmont, for example, required two votes to opt out.

Valerie Dodd, executive director of the city’s now-successful internet company, NextLight, said industry-backed opponents spent about $240,000 during the 2009 election to successfully defeat the measure.

When the city sent the measure back to the ballot again in 2011, opponents doubled down, spending nearly $420,000 to defeat the move. Ultimately it passed with 60% of the vote, Dodd noted.

Similarly, when an opt-out measure hit Fort Collins’ ballot in 2015, opponents, backed by Comcast and others, spent about $1 million in a failed attempt to combat the measure, said Erin Shanley, the city’s broadband marketing manager.

The measure on Denver’s ballot could certainly follow those footsteps.

Leslie Oliver, a spokesperson for Comcast’s mountain west region, said exempting Denver from the state’s 2005 law would not connect more people to the internet.

Rather, Oliver stressed a need to strengthen “partnerships between the city, broadband providers, and community/nonprofit organizations” to explore existing options.

However, Councilman Chris Hinds said opting out of the law could tip those partnerships and negotiations in Denver’s favor.

“The next step would be to go back to our current providers and say ‘All right, now we have additional flexibility,’” Hinds said. “Let’s see how that affects our relationships with our current providers.”

But Kashmann said he’s hoping Comcast and Denver’s other providers won’t put up a fight this time.

“I don’t envision a situation where we all of a sudden tell Comcast and CenturyLink to hit the road and we just build all our own infrastructure and take things over,” Kashmann said.

Closing coverage gaps

One way or the other, high-speed internet access must expand, Kashmann said. Access to the internet, and therefore information, is crucial for students, employees and business owners and even for doctors and their patients as tele-health booms during the pandemic.

The Denver Public Library offers free internet hot spots, Hinds said, but they’re constantly reserved weeks or months in advance.

That’s an indication of coverage gaps, Hinds said, but also of widespread demand.

The pandemic has certainly highlighted digital disparities in Denver, said Erika Martinez, the library’s director of communications. The library supports Kashmann’s measure and even the possibility of a municipal internet, if need be.

“As a community, we need the flexibility to explore more options to make in-home broadband accessible and affordable to all, and we can’t do it quickly enough,” Martinez said.

Denver Public Schools will launch their fall semesters online in August, and district spokesperson Mark Ferrandino said a survey in March showed that 8% of students lacked internet access. That rate dropped, however, to 4% in May, and the district has handed out internet hot spots to close the gap.

Internet accessibility and affordability is critical for students who will be learning exclusively online for the coming months, Tay Anderson, a Denver Public Schools board member, said.

“The earliest kids could see a school building is October or maybe November. Or if COVID spikes maybe next year,” he said.

In the short term, Anderson said opting out of the law could enable Denver to negotiate student internet rates from private companies or force those providers to expand coverage. Or if city officials choose to pursue a municipal internet service, that build-out would provide time for private companies to improve their services and offer more competitive rates.

The market

When Fort Collins put the internet question on the ballot its goal was not to operate an internet business, Shanley said. Rather, like Kashmann and Hinds said, it was to negotiate with the private providers.

“But their initial feedback was ‘We’ll move as the market moves and as the demand increases,’” Shanley said. “And there are areas in Fort Collins where some people only have one option. There are some parts that didn’t even have that.”

That wasn’t good enough, so the city waded into the internet business and discovered strong demand, Shanley said. The city broke ground on the estimated $147 million buildout in February.

To pay back the bonds for the work within the designated 15 years, Shanley said the city must take over 28.2% of the high-speed internet market. But demand is so high Fort Collins is on track to capture closer to 50% of the market.

“We’re having signups on a daily basis,” Shanley said. “The need and the interest is there. It really is putting a lot of pressure on Comcast and CenturyLink. Even before we launched they started improving their networks, they started reducing their prices.”

Longmont has had similar success with its NextLight internet service, which launched in late 2014, Dodd said. The city’s buildout is expected to cost about $45.3 million. Already the company offers coverage to nearly 90% of the city and boasts more than 20,000 customers.

Building a network

Should city officials favor launching a municipal internet service, Hinds said there’s much existing fiber-optic infrastructure built into Denver’s traffic system. That could provide an advantage in the build-out.

While that’s correct, David Edinger, Denver’s chief information officer, noted that those cables end at traffic lights, so there would be a constant and expensive problem of connecting those points to homes, businesses and apartment buildings.

A full build out of a municipal internet system would likely take 10 years and cost $1 billion, Edinger estimated, and it’s unclear if the city could beat the prices offered by existing providers.