An Indiana company plans to spend between $70 and $100 million building a fiber-optic network that would make ultra high-speed gigabit internet service available throughout Lexington’s urban service area, city officials said Monday.
“This will make Lexington the largest gigabit city in the country,” said Lexington Mayor Jim Gray.
Gigabit speed is equivalent to transferring data at 1,000 megabits per second. Lexington’s average internet speed is 16.2 megabits per second, according to studies.
“On average in Lexington, it currently takes 30 minutes to download a 90-minute high definition movie,” Gray said. “At one gigabit, it will take 30 seconds.”
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If the deal gets the appropriate sign offs from the Lexington-Fayette Urban County Council, construction could begin as early as January ,with the first customers on MetroNet’s network as early as summer 2018. It would take three to four years to wire the entire area inside Lexington’s urban service boundary, city and MetroNet officials said Monday.
There will be no cost to the city. MetroNet must first bid on a franchise agreement, similar to franchise agreements held by Spectrum and Windstream, the city’s two other cable television providers.
“This means three things,” Gray said. “First, a fiber-optic network will provide gigabit speeds to homes and businesses. Second, it will bring a new cable provider to Lexington, which will bring competition to Spectrum and Windstream. MetroNet will have Kentucky basketball. Third, MetroNet has a great record of customer service.”
MetroNet also provides telephone service in its other markets.
Gray said the city needs ultra high-speed internet to retain and attract the types of high-tech jobs that major university cities want. For example, Chattanooga, Tenn., saw a bump in the types of industries and the number of jobs it attracted after the city was wired for gigabit speeds several years ago. A June 2015 study by the University of Tennessee found that high-speed internet had attracted between 2,800 to 5,200 jobs to Hamilton County, Tenn.
The entrance of MetroNet into the Lexington market could also solve another long-standing problem — the number of complaints the city has received about Spectrum, Lexington’s largest cable provider. The city has sparred publicly with the cable giant over the past 18 months.
“Our people have been crying out for a new competitor for television, faster internet speeds and for better customer service,” said Gray.
More details of MetroNet’s intent to enter the Lexington market will be announced at a press conference Tuesday morning, officials said.
MetroNet operates in 35 markets, including West Lafayette, Ind., the home of Purdue University, and dozens of smaller towns in Indiana and parts of the western Chicago suburbs, said MetroNet President John Cinelli. Lexington will be the largest city MetroNet has wired, he said.
MetroNet will have to contract with Kentucky Utilities to put fiber-optic cable on its poles. In some areas, the fiber-optic cable will be buried.
The company hasn’t yet decided which parts of the city will get wired first or how much the service will cost customers, Cinelli said. In Plainfield, Ill., the slowest internet speeds are $49.95 a month. The fastest internet speed, one gigabit, is $89.95, according to MetroNet’s website. Television service ranges from $11 to $75 a month, depending on the package.
“We are still working on our pricing structure,” Cinelli said. “We will be competitive.”
The proposed franchise agreement will require the company to serve the entire urban service area, Gray said.
“They will not be cherry-picking neighborhoods. So this will also help with the digital divide,” Gray said.
In some cities, there have been complaints that the wealthiest areas get high-speed internet first.
Cinelli said the company looks at a host of factors before it decides whether to enter a market. Lexington has a growing population, a diversified economy and a major research university, he said. The city’s urban growth boundary also provides density, meaning there are more homes and businesses in a relatively compact area, making it cost-efficient to wire the city.
Cinelli said the company will also consider wiring areas outside the urban service area where there are clusters of dense development.
The city has been working for nearly three years and has spent at least $300,000 on studies and project managers in an effort to bring ultra high-speed internet service to most Fayette County residents. Lexington originally announced its intent to bring gigabit speeds to Lexington in September 2014.
Twelve companies expressed interest in the project when Lexington released its request for information to companies in 2015, but the city has not yet released a request for bids.
City officials said they will ask the Urban County Council to put a request for proposals for a franchise agreement on the council’s agenda for Thursday. It will likely get its first and second reading Thursday night. MetroNet then must bid on the franchise agreement.
Aldona Valicenti, the city’s chief information officer, said other companies can also bid on the franchise agreement, though the city hopes to approve a new franchise agreement before the council goes on its winter break in early December.
Other cities, including Louisville and Chattanooga, have been sued by telecommunications and cable companies after announcing fiber-optic initiatives, though both Louisville and Chattanooga eventually prevailed. A federal judge dismissed AT&T’s lawsuit against Louisville over its partnership with Google Fiber this summer.