Dark Fiber Brings the Light: A Public-Private Partnership in Colorado

After years of hearing from its citizens and business owners that Internet access was one of Fort Morgan’s most pressing problems, the Colorado city of 11,000 decided to do something about it. Like dozens of other communities around the state, in 2009 residents approved a ballot measure to opt out of SB 152, the 2005 state law preventing municipalities from offering broadband. (Today, more than 100 local goverments have opted out.)

Ten years later, a little forethought, hard work, and a public-private partnership with ALLO Communications has brought gigabit speeds and low prices to everyone in Fort Morgan over the city's dark fiber network.

Taking the First Steps

Between 2013 and 2015 Fort Morgan conducted a feasibility study while assessing its needs in the early stages of a plan to expand the city's existing fiber network connecting anchor institutions — itself the result of the state’s 2002 Beanpole Telecommunications Project [pdf] — to residents and businesses. The city reiterated the necessity of an affordable, reliable network in the 2016 Connect Fort Morgan [pdf] plan update. In May Fort Morgan awarded the initial design project to Manweiler Telecom Consulting, Inc., the firm that had built the city’s original fiber network a decade and a half before. The city paid $160,000 for the initial phase of the system’s design.

Connect Fort Morgan

On May 4, 2017, the city issued a Request for Information (RFI) which identified either a public-private partnership or a franchise model for the forthcoming operation and management of the network. As part of the RFI, the city indicated its desire to integrate into the upcoming network the city’s SmartGrid system for electric and water services. Construction on the first phase — a  $2.3 million, 15-mile backbone installed by six boring crews working simultaneously — began that summer, with Sturgeon Electric awarded the bid for its familiarity with the area and technical expertise. To fund the build, the city used money from its reserves.

Turning on the Light

By July 5th, 2017, the first 100,000 feet of the 432-strand fiber backbone had been laid and work on the remainder of the network began. Later that year on December 19th, the city voted to fund and manage the network itself but lease operations to veteran public-private Internet service provider (ISP) ALLO Communications, a western Nebraska-based company involved in the city of Lincoln’s well-regarded network.

In early 2018 the city hired Bauer Construction to complete the network buildout to homes and businesses, with ALLO providing construction management, splicing, and testing services. Residential connections went live that July, with the first customer connected just 90 days after the 125-person construction team and 10-person design team began work.

By December the project was complete, with 57 new miles of fiber (27 of which were aerial and the remaining 30 underground) for a total cost of $6 million. Importantly, Fort Morgan committed to a ubiquitous build, passing every home and business so that everyone in the city could connect. The city chose to exclusively lease the dark fiber network to ALLO for an initial period of 20 years (during which the city’s investment would be returned in whole), with the option for two additional 10-year extensions.

fort morgan power plant

Fort Morgan financed and owns the network up to the point of demarcation, while ALLO owns everything from the multiport service terminal running into the premises. The city maintains the physical plant, with ALLO leasing the dark fiber and access to outside plant equipment. ALLO offers Internet access, TV, and telephone services in Fort Morgan. The company remains responsible for all sales, service, marketing, bulling, and support, and opened a local storefront with a staff of nine. Each entity has first right of refusal should the other decide to opt out of the agreement.

Today, 50 Megabits per second (Mbps) symmetrical connections cost $45 per month, including all taxes and fees and with no cost to users for installation or equipment. A 500 Mbps connection costs $60, and 1 Gigabit per second (Gbps) runs $89. In the summer of 2020 ALLO reported a take rate of 35%. It’s worth noting that at less than 18 months since the first customer was connected, they don’t consider their market share to have fully matured yet.

Reaping the Benefits

Subsequent years have shown the success of Fort Morgan's partnership with ALLO. In the spring of 2019 the municipal network won the Nebraska Municipal Power Pool’s Project of the Year award for its commitment to serving the entire community; that same year ALLO scored eighth in PCMag’s ten fastest ISPs in America, and Fort Morganites were the first in the area to see the benefits of the Wi-Fi 6 standard when the ISP rolled it out that September. City officials have lauded the partnership, and ALLO is looking to dramatically expand its work with Colorado communities on similar partnerships. The network strain of the coronavirus pandemic, at least across the state line in Lincoln, shows that ALLO has been able to handle increased usage in both directions far better than Spectrum or Windstream. The company reports a net promoter score of 70, which is a far cry from the abysmal customer service satisfaction rates we're used to seeing from large telephone and cable providers around the country.

The Fort Morgan approach highlights the advantages of a public-private partnership and emphasizes the savings potential of persuing dig-once practices: the city saved a whopping 45% in the placement of the first 7,000 feet of cable by sharing costs with cellphone provider Viaero. Twice more during that initial summer the city shared construction costs, helping the project stay under budget. Fort Morgan's partnership with ALLO also provides a successful template for city councils or municipal leaders who want a fiber network but are anxious about mitigating risk.

Read additional MuniNetworks.org coverage of broadband developments in Colorado, and listen to Episode 285 of the Community Broadband Bits Podcast for Christopher's conversation with Dave Young about ALLO and the fiber network in Lincoln, Nebraska.