Preliminary estimates from a consulting firm hired by the city show the cost will be $175 to $200 million to build a fiber-optic network to increase sluggish Internet speeds and expand Internet access in Fayette County.
The city hired CTC, a company that has been hired by the state and the city of Louisville, to assess the city’s current infrastructure and determine how much it will cost to build a fiber-optic network. That cost estimate is just preliminary, city officials told a committee of the Lexington Urban County Council on Tuesday.
Aldona Valicenti, Lexington’s chief information officer, told the Environmental Quality and Public Works Committee the city will issue a request for proposals within the next four weeks. That request would be for either private-only or a public-private partnership to build fiber-optic infrastructure.
The city issued a request for information last year to gauge interest in the private sector in building broadband throughout the city. The city received 12 responses including Time Warner Cable and Windstream. The two companies also offer cable and Internet options in Fayette County.
Those 12 proposals included a host of funding options — a private-only build to variations of a public-private partnership.
Mayor Jim Gray has pushed for the city to increase its Internet speeds, saying it is key to attracting and keeping businesses. Gray has often referred to Lexington’s push to become a “gigabit city.”: Gigabit refers to speeds of 1,000 megabits per second. Lexington's average Internet speed is 16.2 megabits per second.
In 2014, Ookla, an Internet metrics company, ranked Lexington’s 16.2 megabits per second as 38th of 96 Kentucky cities and towns where the Internet is available.
Valicenti said although expanding access to Internet is part of the initiative, this is not about expanding wireless Internet to all of Lexington.
“This is to address infrastructure so you will have faster capability for your home,” Valicenti said.
Valicenti said those bid responses will not be available for the council to review until spring.
The city has spent $250,000 on consultants so far. Cities with more than 1 million people have been able to get companies such as Google to pay for the construction of fiber-optic networks because there are enough potential customers to cover the company’s costs. But mid-size cities are struggling to find ways to pay for building out fiber-optic networks, Valicenti said.
“We’ve had calls from Boston and other cities on what we are doing and how we are doing it,” Valicenti said after Tuesday’s meeting.
Councilman Russ Hensley, who is the CEO of two information technology companies, said he would support the city building a fiber-optic network. Faster Internet speeds are key to growing business, he said.
“I strongly encourage us to invest as much as we can,” Hensley said.
Hensley represents the 12th Council District, which includes the area outside the city’s urban service boundary. That area is not included in the proposed service area in the city’s request for proposals.
“I think that’s a mistake,” Hensley said.
Valicenti said the city would look at the proposals to determine how they could interest companies in providing services to the rural area. However, one of the reasons why 12 organizations responded to Lexington’s request for information is because Lexington is densely populated, which means building a fiber-optic network is easier.