Editorials

When the city is your internet provider, the real cost may be hidden

Learn why Highland Communications Services was nationally ranked in a recent Harvard study

A Harvard University study published this month ranked Highland Communications Services 5th in the nation on providing the most savings in basic broadband services as compared to its private competitors. HCS Director of Technology and Innovation A
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A Harvard University study published this month ranked Highland Communications Services 5th in the nation on providing the most savings in basic broadband services as compared to its private competitors. HCS Director of Technology and Innovation A

In 2010 Highland leaders and residents decided they were not getting the broadband service they deserved, so they built their own fiber optic network.

Highland Communication Services competes with Charter, Frontier, Wisper, DirecTV and Dish Network, but most residents are choosing the local utility. It provides service to 53 percent of its potential customers, and it is getting ready to expand to another 763 potential customers.

The city’s fiber optic company was just cited in a Harvard University study as fifth for value out of 27 public utilities compared to private competitors. A resident will pay Highland $383 a year compared to $679 a year for Charter, the study said.

“The numbers showed HCS was providing its customers better value for basic broadband service, as well as clearer pricing,” said study co-author David Talbot.

That means Highland is telling its 2,062 customers what they will pay without offering introductory discounts that vanish in a few years.

All of that is to the good, but there is another aspect to this public utility.

It is publicly funded, and is still paying about $1 million a year toward debt for the system’s $12.2 million construction tab. It will continue paying until 2032.

Out of the $4 million current year’s budget, Highland’s fiber optic will run $1.63 million in the red. That cost is hidden on every resident’s city utility bill.

Getting to those additional 763 customers will cost $53,000 in engineering. The construction costs have yet to be tabulated.

Plus, the market is changing.

Landlines are going away and television service is eroding as streaming services become prominent. Highland’s triple play is too often down to a single — broadband internet.

So while Highland should celebrate the Harvard honor, their fiber optic company represents a cautionary tale for other cities pondering going into business. No matter how capable or efficient you might be, a changing market that shutters a private business just turns into a never-ending ratepayer or taxpayer burden when it is a public utility.

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