Should PTC risk building its own $3 million cable system? Or pay existing high-speed provider?
Municipal broadband will be back on the Peachtree City Council agenda on Feb. 4. The council will consider moving ahead with having the city finance the project or contracting with Newnan-based NuLink to provide broadband service to city facilities.
If going the city-owned route for city facilities and large broadband users, the $3.23 million project would include approximately $365,000 in annual debt service for the initial 10-years period. There would also be annual operating expenses estimated at $100,000 per year, for a total of $465,000 per year.
The ongoing annual operating expenses are subject to change and would be commensurate with the amount of system revenues being generated, said city finance Director Paul Salvatore. Citing an example, Salvatore said if the system is generating $1.5 million per year in revenue, the annual expenses could potentially increase to $1 million per year.
The NuLink proposal comes with an annual cost fixed at $92,820 for a period of five years.
In addition, said Salvatore, the city would still need to spend approximately $332,000 on equipment needed to accommodate the higher speeds and bandwidth that NuLink would be providing. Salvatore said the annual debt service for this equipment purchase is estimated at $73,000 for a 5-year term, bringing the total annual cost for this option up to $165,820.
“However, the $73,000 debt service cost for equipment is necessary under either option, but under the NuLink option, it would become part of the city’s PIP (Public Improvement Program) equipment lease as opposed to being an expense of the broadband utility,” Salvatore said.
The NuLink contract will have options to renew after the initial 5-year term, with pricing to be determined based on future city capacity needs and wholesale costs of Internet service, Salvatore said.
City staff have provided a list of potential contract wards if the council decides to have the city fund its own broadband system.
The Peachtree City Public Facilities Authority will meet at 6:30 p.m., prior to the council. Consisting of council members, the authority will consider approving an authorizing resolution for the broadband project. Financing for the project is contingent on the council’s approval during regular session at 7 p.m.
The city currently pays NuLink $44,000 per year for 100 mbps (megabit per second) service and, under a previous pricing structure, would be paying $87,000 per year to go to 250 mbps service if maintaining service with NuLink.
Going to a needed 1.5 gbps (gigabit per second) service would likely cost $500,000 per year, city staff said at a previous meeting.
NuLink began life in 1997 as a division of Newnan Utilities, itself owned by the city of Newnan in Coweta County, according to NuLink’s website. “NuLink was spun off as a private entity in 2008,” the website says, and features a fast fiber optic network that already serves much of Peachtree City’s industrial park.
Meetings with AT&T revealed that 1 gbps or more of broadband would cost the city $1.7 million while that service with Comcast would cost $452,844 per year.
