In September 2014, Mayor Jim Gray announced an initiative to make Lexington a “gigabit” city with the goal of increasing access and internet speeds in Kentucky’s second-largest city.
Two years later, the city has not yet released bids to build a faster internet. The complexity of building and running a fiber-optic network and figuring out how to pay for it has slowed the process.
“Every city in the country is trying to figure this out,” said Scott Shapiro, a senior adviser to Gray who has been involved with the initiative since 2014. “There hasn’t been a decrease in the number of providers ... there are now more.”
The city hit pause on the project earlier this year so it could do a study to determine how much it would cost and if there is interest from the private sector to provide fiber-optic cable in Fayette County’s rural area, which traditionally has much slower internet speeds than the urban service area.
That $58,000 study by CTC Technology and Energy should be completed by Nov. 30. That means the request for proposals — a type of bid for professional services — likely won’t be released until early 2017, said Aldonda Valicenti, Lexington’s chief information officer.
The study should give the city data so it can understand how much more it would cost to provide high-speed internet in the rural area. Fiber- optic cable has to go underground or on poles. It’s a costly and complicated undertaking. The fiber is one cost. Running the network is another cost. Some companies want to do both. Other companies or entities will do one or the other, Valicenti said.
Gigabit refers to speeds of 1,000 megabits per second. Lexington’s average internet speed is 16.2 megabits per second, according to many studies. For internet speeds that fast, the city will need a fiber-optic network.
Valicenti and Shapiro gave the Urban County Council’s Environmental Quality and Public Works Committee an update on the city’s “GigforLex” project during Tuesday’s meeting.
Valicenti said the bid is structured so potential partners could bid on providing service only to the urban service area or the rural area or both the inner city and rural areas. When the city released requests for information for potential partners in 2015 it received a lot of interest — about a dozen responses. That’s because Fayette County’s growth boundary creates density, making it more cost effective to install fiber-optic cable. It’s also a well-educated city that uses a lot of bandwidth, she said.
The city will make changes to its request for proposal after the rural study is completed. Valicenti said they are hoping to have the bid released by late 2016 or early 2017. It will take four to six months to review those bids once they are returned to the city, she said. The city wants to do this right and is taking its time to determine the best and most cost-effective options, she said.
Lexington’s efforts come as some have begun to question whether building gigabit cities are worth the cost. Internet speeds of 1,000 megabits per second are fast, much faster than what most people need, some technology experts now say.
Shapiro told the committee on Tuesday that after Chattanooga, Tenn., became a gigabit city, hundreds of new jobs were created and real estate downtown boomed. Chattanooga used a city-owned utility and federal grants to build out its network.
“It would be really difficult to find an entity that does not need faster internet service,” Shapiro said.
Alphabet, which is Google Fiber’s company, is now re-thinking some of its gigabit cities initiatives because it has been costly and difficult to do. Google has suspended a project in Palo Alto, Calif., Valicenti said. “It appears that Google Fiber is now looking for a new business model,” she said.
Lexington’s announcement that it was pursuing the initiative has prompted the city’s two main internet providers — Time Warner Cable and Windstream — to introduce faster internet in some areas of Lexington.
“One of the main goals of this project is to provide competition,” Shapiro said. “More competition means faster speeds, better customer service and lower prices.”
Urban County Councilman Kevin Stinnett said he felt the city should be increasing access to people who currently don’t have it. Education increasingly relies on the internet.
“We have kids who don’t have internet access,” Stinnett said.
Shapiro said companies will serve low-income neighborhoods if there is enough density in the area to justify the expense of installing the fiber-optic network.
Councilman Jake Gibbs questioned if the gigabit initiative was too costly for Lexington. If Google can’t afford it, how can Lexington afford it?
Shapiro and Valicenti said although many cities have slowed efforts, there are still companies that have shown interest in gigabit initiatives.
“More and more investors are getting into this,” Valicenti said.