Brian Steele: Nixa could pursue a fiber infrastructure on its own or in partnership.

Nixa at gigabit crossroads

Brian Brown

Posted online January 19, 2015 | 11:55 am

In the race to bring gigabit Internet speeds to Nixa residents, private business is winning, but city government is on the road to unveiling its own high-speed offerings.

Suddenlink Communications last month laid out its plans to invest $250 million over three years to ramp up its in-home online speeds across its 15-state footprint.

“We’re working diligently to enable a 1 gigabit service in Nixa and Ozark later this year,” Suddenlink spokesman Gene Regan said via email.

Officials with Suddenlink, a subsidiary of St. Louis-based Cequel Communications Holdings I LLC that serves 1.4 million residential cable and Internet customers, rolled out the new high-speed Internet service in Ozark and Nixa as part of the first phase of its Operation GigaSpeed broadband plan. Suddenlink customers now have access to residential download speeds up to 250 megabits per second and expanded upload speeds up to 25 Mbps.

The move follows the city of Nixa’s two-year exploration of bringing residents gigabit download and upload speeds. Mayor Brian Steele said the results of a feasibility study conducted with Nixa residents last summer have provided ample reasons for the city to satisfy their need for speed.

The only thing left to decide, Steele said, is which path to take.

Sizing up demand
Nixa officials in July enlisted London-based fiber provider SiFi Networks to conduct a six-week feasibility study to determine resident demand for a gigabit broadband infrastructure.

So-called gigabit cities, such as Kansas City and Chattanooga, Tenn., have invested millions of dollars to gain the moniker that describes communities offering broadband connectivity at roughly 1 gigabit per second, or 100 times faster than the average broadband service.

In Nixa, fiber-to-the-premise infrastructure is anticipated to cost up to $28 million, or $1,900 per resident. Based on the feasibility study, Steele said residents are on board.

“A large percentage of residents and businesses said that would be something they’d be interested in seeing come to Nixa,” Steele said.

All of the 45 businesses that responded said Internet service was “very important” to their operations, while 89 percent of residents identified it as a priority.

Other findings in the Nixa survey:

Business Internet use has grown by 24 percent from 2010.
Internet traffic increased eightfold in the last five years.
By 2017, video will comprise 73 percent of all Internet traffic.
Three out of four households already have broadband.
Only 21 percent of businesses were “satisfied” or “very satisfied” with their current Internet service.
Six out of 10 residents expressed some level of dissatisfaction with their current Internet service.
Eight out of 10 residents were “likely” or “very likely” to buy at least a 50 Mbps plan at $50 per month; 66 percent were likely to pay for a 100 Mbps plan for $60 per month; and 29 percent were interested in buying a 1 gigabit plan for $99 per month.

In all, 690 residents returned completed surveys, for a 9 percent response rate. The response rate for businesses was 8 percent. According to SiFi Networks, the average response rate is 3-4 percent, and the higher-than-normal return suggests a high level of interest.

Steele said Suddenlink’s plans aren’t slowing the city’s momentum, primarily because of a difference in speeds. Suddenlink’s copper wire infrastructure would only reach 1 gigabit on download speeds, not uploads, while Nixa’s fiber optic network is designed to hit 1 gigabit on both.

“It’s really comparing apples and oranges,” Steele said.

According to the feasibility study, 12 percent of residents work full time from home, and 19 percent work part time from home. With upload and download speeds at 1 gigabit, the city’s fiber to the home would match what only businesses can achieve through SpringNet in Springfield. Steele said the aim is to attract graphic designers and other tech-savvy residents and businesses.

Two roads
Developing a city-owned broadband infrastructure is a question of when, not if, according to Steele. Since the end of August when the survey results were unveiled, he said city leaders have been considering whether they want to pursue plans on their own or partner with SiFi.

Whatever road Nixa takes, Internet service providers would lease space on the network, giving a revenue model for the city and provider options for residents and businesses.

“You would be able to pick from multiple options, which will make for a more competitive environment,” Steele said. “Instead of just being able to get your Internet service from Suddenlink or AT&T, you could get it from any number of companies.”

Currently, city staff and SiFi representatives are drafting a contract proposal, which Steele said has been complicated by provisions in Missouri law relating to municipal contracts.

Should the city not sign an agreement with SiFi, Steele said it could go down the development road alone. That move would require a vote of the people to fund the project upfront.

“The city could build it just like any other piece of infrastructure – sewers, water systems, electrical systems. We could do a fiber system as a service the city could provide,” he said. “The city would then lease out that system to third-party businesses as a way to connect with customers and provide TV, phone and Internet.”

If Nixa partners with SiFi, the upfront costs to develop and manage the system would come from the company and be spread out to the city over 25 years. The city would plan to recover its costs via fees collected from ISPs.

“It would be more of a turnkey system,” Steele said, pointing to SiFi’s gigabit network development in Louisville, Ky. “They’ve done this before, and they have that knowledge.”

Steele said Nixa City Council would continue to weigh its options over the next couple of months before making a decision. Either way, the mayor said fiber to the home supports the city’s strategic plans to encourage business investment in the city.

“Development is the key reason we’re doing this,” Steele said.

Regardless, the city’s established cable provider is pressing forward with its plans.

“Customers are demanding faster speeds and the ability to use broadband connections for more and more devices, and we want Suddenlink to be their first choice,” Regan said.