Peachtree City, Georgia, leaders decided Thursday night to contract with a private provider to improve city Internet speeds rather than build its own municipal broadband system.
The City Council, in its bimonthly meeting, voted to sign a memorandum of understanding with NuLink to provide broadband service at download speeds of 1.5 gigabits per second to city facilities. The annual fixed cost for services will be $92,520 for the next five years, negotiated lower than a previously quoted rate of $104,568 by the nearby Newman-based company.
“NuLink offered us a very affordable price for service,” city spokeswoman Betsy Tyler told Watchdog.org on Friday morning.
City taxpayers will also pay $332,000 for network equipment to accommodate the higher speeds and bandwidth, spread out over five years at an annual debt service cost of $73,000 per year. The total cost of the deal with NuLink is about $166,000 annually.
That’s significantly lower than service rates quoted by AT&T and Comcast, which were $1.7 million and $453,000, respectively.
The city, with a population of some 34,000 and located about 30 miles southwest of Atlanta, now pays NuLink $44,000 annually for speeds of 100 megabits per second.
On a presentation touting the pros and cons of the NuLink deal, city leaders noted it would eliminate the business risk of operating a utility and they won’t have to worry about maintaining the cable or equipment outside its facilities. The project may also help facilitate the extension of fiber-optic cable to neighborhoods.
Peachtree City’s plan for its own broadband system called for the issuance of $3.2 million in bonds to fund the project, which would serve only city facilities and businesses, with an estimated annual cost of $437,000, including operating expenses and debt service spread over 10 years.
Critics questioned whether there was enough demand for the project. Surveys of area businesses demonstrated tepid interest in paying thousands of dollars per month for fast Internet. City council members also expressed hesitation that there wouldn’t be enough customers to pay back the debt in creating the network.
“We need to have more than a survey that says these businesses are prepared to sign up with us when the project comes online,” council member Eric Imker said at a December meeting. “We need something in writing.”
But the option of building that municipal broadband system isn’t completely off the table.
City Manager Jon Rorie is authorized to sign a contract with NuLink pending final review and approval by staff, consultants and attorneys, but if terms change substantially from what is presented in the memorandum of understanding, staff would bring the issue back to the City Council.
The city’s public utilities authority passed a tentative financing plan for that city-backed broadband system just in case “the deal with NuLink doesn’t work out as advertised,” Tyler said.