Kaysville Fiber

Get Informed

Get Informed

Information Sessions

Every Monday in October 7:00-8:00 PM

Kaysville Fire Station 175 S Main Street, Kaysville.

Come ask questions about the project and filling out your survey.

Why is Kaysville installing a Fiber Network in the City?  After spending a year researching, investigating and learning about Fiber Optic networks, it was determined that a community fiber optic network would be a great asset to the city and it's residents.  It would facilitate the City's involvement in a new digital age and provide universal ubiquitous broadband access to all of the City's residents - no one would be left out.  The City will utilize the fiber network to drive efficiencies within many City Departments.  It is a long term investment that gives the City and Residents more input and control over how the City stays relevant and competitive into the future.


Why is Kaysville City making this investment and not a private company?  This is simple - the cost of capital to the city for long term infrastructure projects is much lower than for a private enterprise.  Comcast, Centurylink or Google need to deliver a 15%+ return on investment to satisfy their shareholders.  The City is not doing this to make money, they just need to cover the interest cost.  Presently, interest rates are as low as they have ever been.  The City's cost of funding presently is between 3%-3.5%.  Additionally, all the value delivered by the project will benefit the residents of Kaysville through lower service costs and 3rd party revenue generated by the fiber network.


 

Why is Kaysville proposing this fiber network as a Utility?  After studying successful and unsuccessful implementations of community fiber networks, 3 main risks were evident in community fiber project.  1) Construction Cost, 2) Take Rate (revenue generated) and 3) Operations & Maintenance expenses.  The most common failure for unsuccessful fiber projects was the Take Rate (how many residents signed up for services).  The Utility Model removes this risk as the Fiber Utility Fee spread across all residents guarantees sufficient revenue to repay the money borrowed for the project.  The next most critical cause of failure was ongoing operations and maintenance costs.  To operate a fiber network requires a certain level of fixed expenses.  The lower the Take Rate, the higher the cost per participant.  Low Take Rates also contributed to insufficient revenue being generated to support the ongoing Ops & Maintenance.  With the Utility Model, the incremental cost of additional services to residents will be lower than other alternatives, thus providing the incentive to subscribe to additional services.  The break-even rate for Ops & Maint under the Utility Model is less than 25% (the average Take Rate nationally is about 54% after 5 years).  The final cause of failure was the construction costs.  Many projects that went over budget was due to poor quality control of the install which led to additional costs to correct mistakes (this is why Google abandoned their project in Indianapolis).  An experienced, financially stable contractor is the only way to control this risk.  The City plans to obtain competitive bids weighing experience and prior successful project completions as important as the proposed cost for the Kaysville network.  This should reduce the construction risk.  The City is also anticipating some issues by projecting a 10% contingency in the estimated costs. 


How will Residents benefit from a fiber network?  The easy answer is that the fiber network will be operated as an open network.  An Open Network means that any qualified Service Provider may lease space on the network to offer services to residents.  Since the providers do not have to invest large amounts of money upfront, they can be more competitive.  Open Networks around the country have demonstrated that competition has driven down the cost of services and improved the quality of service.  All of the benefits of this competition is received by the Residents since it is a community owned network.  It is estimated that residents will save $10-$40 per month through an open competitive network (it may take 2-5 years for the highest savings to be achieved).  What is $10-$40 per month worth to the population of Kaysville? With about 9,000 homes and businesses in the City, this would save $1.1 to $4.4 million per year.  This equates to a 4 - 16% return on investment.  So even at the low end, the Residents will save more than the cost of borrowing the money to build the network.  


Isn't this risky as technology changes so fast?  Fiber Optics has been the preferred backbone for communication/data transmission for nearly 50 years.  The problem was costs.  Costs for fiber optic cabling and installation methods have improved dramatically which make it more cost effective now.  Fiber Optics have several inherent advantages over any other current or theoretical technologies - 1) The speed limit is the speed of light (fastest method known to man).  The real limitation on a fiber network is not the cable, but the equipment on each end of the cable.  10 years ago Gigabit switches were expensive and 10 Gigabit switches were extremely expensive.  Now a 10 Gigabit fiber switch is only about 10% more than a Gigabit fiber switch and both are just barely more than regular copper wire switches.  100 Gigabit fiber switches are expensive, but in 10 years will probably be the same price as 10 Gigabit fiber switches.  We have anticipated that the equipment would need to be updated over time, but plan to begin with 10 Gigabit fiber switches which should be more than adequate for the next 10 years.  New wireless technology still requires a fiber optic backbone to function effectively, so even if the final 200' service moves to wireless, these providers will want a fiber optic cable network to support the wireless services (and with this network, Kaysville Residents will financially benefit from the fees paid by the wireless carriers to contract for fiber connections to their towers).  We don't see where a new technology will cause the fiber optic cable to become obsolete in the foreseeable future.