The city of Grover Beach, California, recently finalized a 10-year agreement with Digital West, Inc., to bring gigabit speed fiber to local businesses. The coastal town in San Luis Obispo (SLO) County wants to attract tech companies like those making waves in Silicon Valley and the "Silicon Beach" in Los Angeles.
Terms of Agreement
The agreement specifies that Grover Beach will maintain ownership of the conduit system and lease Digital West conduit access at an annual rate of 5.1 percent of total fiber revenue. Digital West will build, own, and maintain the fiber-optic network, several lines of which will be leased to the city for public administrative use. Upon approval from both parties, the 10-year agreement can be renewed in 5-year increments.
A May 2016 Grover City staff report provided an optimistic forecast from Digital West:
The forecasted revenue amount speculated by Digital West Network, Inc. for the City is estimated to grow from a first year projection of $4,437 to $112,302 in year 10, for a total over the 10 years of $602,285. This amount is much higher than the originally predicted 10 year projection of $32,038 per year represented by Digital West Network, Inc. in 2014. The increase projections are due to the fact that they plan to add the residential market to our options which is projected to fall under the lease agreement. This brings greater benefit to the community, as well as more revenue commission to the City.
We outlined the network’s projected costs in a story last year.
Fiber Surfin’ USA
The Central Californian coastal city hopes its unique location near a trans-Pacific cable landing station will attract scores of investment and cause the moniker “Silicon Dunes” to stick. Pacific Crossing’s undersea cable is part of a four point fiber ring connecting the Japanese cities of Shima and Ajigaura with Harbour Pointe, Washington, and Grover Beach.
Initial plans call for connecting the city’s 727 businesses. With little more than 13,000 residents and a city area of only 2.3 square miles, locals are optimistic that the rest of the community will be hooked up in the near future. Grover Beach Mayor John Shoals stated in the press release:
“The agreement is a major milestone in moving the City’s Broadband Network Initiative forward and achieving the Council’s goal of strengthening the City’s economic base by attracting new business... We look forward to continuing our partnership with Digital West to bring this important project to the community.”
With the agreement finalized, city officials will soon seek bids to lay remaining conduit. Construction may be underway as early as the end of the summer.