Now that a judge has legally approved it, Ammon is forging ahead with an innovative approach to financing Internet infrastructure in Idaho.
On May 19th, the city council unanimously voted to create a Local Improvement District (LID). Ammon’s decision has secured a way to finance its open access Fiber-to-the-Home (FTTH) network.
Local Improvement Districts: You're In or You're Out
LIDs have been used for fiber-optic infrastructure in other places, such as New Hampshire and Poulsbo, Washington, but the approach is still not widespread. In Ammon, the city council's action creates a district from five subdivisions, where residents can “opt in” or “opt out” of participation in the FTTH network. The district includes 376 individual properties, and 188 of those property owners have expressed a desire to "opt in" to the benefits, and costs, of the network. Those who have chosen to "opt out" do not use the network, nor do they pay for deployment.
LIDs are specifically designed to take advantage of any boost to local property value -- and studies have linked FTTH with increased local property values. We’ve previously summarized the most common ways communities finance networks, but LIDs are a little different.
- The local community creates a “district” to issue improvement bonds. In this case, the district consists of five subdivisions of the city.
- Selling those improvement bonds will fund the construction of the local infrastructure project. For Ammon, that’s the open access FTTH network.
- The bonds will then be paid for by an assessment on each of the properties that benefit from the network - only the households that choose to "opt in."
A Few Dollars A Month For Infrastructure
When Ammon’s IT Director, Bruce Patterson, joined the Community Broadband Bits Podcast in Episode 173, he explained Ammon's LID plan. Chris brought in real-world examples and questions of what LIDs mean for individual homeowners.
Chris Mitchell: Basically I could opt in and then there would be, based on the number of people that are opting in and the cost, that would determine how much it would cost for me and I could either write you a check for all of it, or I could put it on my property taxes?
Bruce Patterson: That's exactly right so if you want to pay for all of it, part of it up front, you can let it be bonded for. You can go down and pay a portion of it and then it's just collected as we say through your regular assessment on your property tax until it's paid off.
Patterson estimated that monthly assessment on property taxes for those who "opt in" would probably be about $15 to $20. Only those residents who "opt in" have an assessment on their property taxes. If a resident does not want the fiber, there is no assessment on that resident’s property tax.
To connect to the Internet, residents will also need to sign up with one of the Internet Service Providers (ISPs) offering retail services via the open access fiber network. The city will also offer a low cost, no frills, basic option that will allow those that "opt in" the ability to perform basic tasks, like check email.
Now that Ammon city council has created the LID, residents in those five subdivisions will have to choose whether to “opt in” or “opt out” of the FTTH project. Individual residents must now decide if they want next-generation connectivity. With 188 of 376 individual property owners "opting in" (a take rate of about 50 percent) Ammon should soon have that last mile up and running.