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Cities fighting Internet fees 0

By Michael Mui, 24 Hours Vancouver

Fibre optic is key to lowering Internet fees, say experts (FOTOLIA)

Fibre optic is key to lowering Internet fees, say experts (FOTOLIA)

Cities around the Lower Mainland are developing plans to take over some of the control telecom companies have over prices of Internet, TV and phone services — and the answer could lay in fibre optic cabling.

New Westminster was the latest to approve an investigation on Monday — as part of its Intelligent City plan — to see if this idea could be financially supported.

City chief information officer Alvin Chok told 24 hours some Royal City businesses are paying up to $16,000 per month for high speed Internet.

“It’s just too much,” he said. The intention, if a business case is approved later this year, would be for the city to bury fibre optic cable into the ground and then lease that capacity to telcos.

Traditionally, he said, the larger telcos own the infrastructure required to provide service, and then lease these services to the smaller competitors.

Having city-owned infrastructure would take the control out of the larger players’ hands — allowing companies to lease at a lower cost from the muncipality instead, said Coquitlam QNet general manager Rick Adams.

He’s the man behind Coquitlam’s fibre optic network — established in 2008 — and which last year made the city $75,000 in profit from leasing to eight telecom providers.

The start-up cost for the Coquitlam project was about $5 million — expected to be fully paid back in 2028.

“Right now any surplus cash flow goes back to repaying our debt,” he said, adding Vancouver and Surrey have also stated their fibre-optic intentions.

“Once we’ve succeeded, all that money goes back as a source of non-tax revenue for the city.”

Adams said costs for all-inclusive Internet, TV and phone plans, in the meantime, have been driven down to as low as $60 per month in Coquitlam.

“Our telecom industry operates like a railroad industry. The companies that own the tracks ... make it difficult for their competitors,” he said.

“Certainly competitors can use it, but they pay a big premium.”

The goal for the cities is to reduce that entry-price for smaller telcos to compete — and make money doing it.

 

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