In 2012 the residents of Siloam Springs, Arkansas voted against building their own fiber network after some misleading electioneering by the regional cable monopoly Cox Communications. A decade later and local residents are still frustrated by high prices and a lack of competition, as city leaders are still contemplating what exactly they should try to do about it.
In June, the city released a new report by Finley Engineering and CCG Consulting showing the width and depth of the city’s broadband issues. That report was formally presented at an August city meeting before the city’s recently-formed Broadband Advisory Committee.
Survey Said …
The survey showed that 11 percent of Siloam Springs residents still lack access to broadband, 77 percent of city residents want greater broadband competition, and 88 percent say they’re paying way too much for broadband service. While residents also complained about sluggish upload speeds and outages, the biggest consistent complaint was high prices.
“The number one issue that came through loud and clear in the surveys is broadband pricing – practically every resident we heard from thinks current broadband is too expensive,” the study authors noted.
Siloam Springs is heavily dominated by a duopoly of just two providers: Centurylink and Cox Communications. But even calling it a duopoly is generous; the city’s survey found that Cox enjoys a 92 percent broadband market share within city limits. The lack of competitive threat reduces any real incentive for the cable giant to lower prices or expand service.
“We’ve never seen a cable company have that percentage of a market before,” CCG Consulting’s Doug Dawson told city leaders during the recent meeting.
Indicating a potentially high take rate should the city move forward, the report found, 79 percent of city residents said they would strongly consider switching to a new fiber network if it was made available.
It also showed that the average price for broadband in Siloam Springs is $85 a month—the highest average ever tracked by the firm.
Cox Campaign Against Municipal Broadband
Back in 2012 when the city was considering building its own fiber network, Cox posted misleading flyers around town falsely claiming the city’s plan was “just another government intrusion into the private sector,” and that the doomed project would pull resources away from city libraries, roads, and other essential infrastructure.
A decade later and Cox’s high prices, spotty coverage, and semi-frequent outages are angering locals more than ever.
It would cost an ISP with an estimated sixty-percent market share around $28 million to deliver fiber to every home in the city, the study found, with a per-location-passed cost of $3,199. The overall cost was slightly higher than the firm originally estimated due to the fact that much of the network would need to be buried.
“Our overall conclusion is that there is enough potential for a broadband network to be successful that you should continue the exploration,” the consultants found.
The study proposed three possible options for Siloam Springs moving forward: a public private partnership with a local ISP, a city owned fiber network built on the back of the local power utility, or having an existing ISP pony up their own cash to expand fiber to locals.
“All 3 options are still up for consideration,” Phillip Patterson, Siloam Springs City Manager told ILSR. “We are currently working to publish an RFI for ISPs,” Patterson added, after which the city’s broadband advisory council will determine the next steps forward.