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Ammon, ID Implements Broadband Infrastructure as a Utility with Publicly-Owned Fiber Optic Network

The City of Ammon

Ammon, ID

The rural City of Ammon, ID built a municipally-owned fiber optic network to serve as a public utility. This new system allowed residents to own the private fiber network, provided faster internet speeds at lower rates and easier adjustments for advancements, since service is not tied to a single service provider.

Topics Covered

Digital Divide

Cost

Initial: 500 Thousand USD

Funding

General Fund/Existing Public Funds

Project Status

Operational since 2016

Gov Champion

Technology Director

Problem Addressed

As a smaller city, Ammon lacked the financial resources and personnel needed to expand the broadband services to match the services their neighboring cities were providing.

With the continuous rise of remote work, the demand for internet connection and faster internet speeds will only increase as time goes on. 

Not only have broadband services contributed over $1 trillion to the U.S. GDP over the last decade, it has also accelerated the growth of e-commerce services, widened economic opportunities for work and leisure, and increased connectivity adoption. Weaker broadband services in communities can cause limitations in entrepreneurship and innovation due to the reduced access.

In the small City of Ammon, Idaho, lackluster internet speeds made it difficult for the city to use their data systems. Though only a small amount of data was needed to operate these systems, their internet provider at the time was unable to provide reliable connections without the city paying them more than they could afford.

Over a decade ago, in 2008, Ammon began to worry that it was at a disadvantage to its neighboring city, Idaho Falls when it came to internet speeds. Having a population slightly above 16,000 people didn’t present the business model necessary to attract national Internet Service Providers (ISPs). Slow internet speeds threatened the ability for Ammon to gather its share of the business stakeholders and successful professionals moving to the state to capitalize on the teleworking-enabled opportunities. This left Bruce Patterson, Ammon’s one-man IT Department, with a significant problem to solve: how could the City of Ammon use its limited resources to compete with Idaho Falls?

Solutions Used

The City of Ammon created an affordable open access network that would benefit both the ISPs and its residents now and long term.

In 2010, the City of Ammon began construction of a municipally owned fiber optic system. Bruce Patterson, Technology Director for the City of Ammon, implemented a legal structure called a local improvement district (LID) to fund fiber construction. This method would allow the city to institute a bond covering the costs of building fiber optic connection in a neighborhood. They developed the infrastructure for the city to use and eventually expanded it to the public. Single households would then be able to opt-in to receive a fiber optic connection, and the responsibility for paying off the cost would be transferred to the subscribed homeowners through their internet bill over the next 20 years.

The purpose of the Ammon Model is to create a next-generation fiber optic utility infrastructure that will only improve through change and innovation. While the city recognized that building this infrastructure is not the fastest nor the easiest method, it’s worthwhile long term. Benefits include:

  • Faster internet speeds at lower rates
  • Easier adjustments for advancements, since service is not tied to a single service provider
  • The ability for community members to build their own private network

“If you were to ask me what the key component of Ammon is, I would say it’s a broadband infrastructure as a utility,” says Patterson.

The city addresses internet infrastructure the same way it handles water and electric services. The city will never break even or generate a profit from implementing this infrastructure. Instead, the utility will rely on public participation to guarantee cost recovery of the installation and service operations. Since Ammon used LIDs to fund this operation, property owners have the ability to voluntarily share in the cost of infrastructure improvements. Property owners receive cost estimates, and once construction is complete, the total cost of the project is equally divided among the participating properties. Alternatively, the property owner can pay the amount in full at any time. Using standard utility financing mechanisms results in annual payments of less than $200 annually for properties receiving fiber. Additionally, operational expenses are billed to the residents. Ammon’s monthly utility fee is $16.50. 

This new system doesn’t just benefit the residents. Internet providers are not required to install their own equipment at the properties, meaning no real investment beyond the initial setup is required on their end. They also do not need to provide on-site support because all the services are in software, leaving the utility responsible for the hardware. Furthermore, no contracts are required, since they do not operate on a per-subscriber basis.

Outcomes

1

Implementation of the fiber optic systems enhances the competition between ISPs which helps keep costs lower.

2

There is minimal upkeep - three individuals operate the network that serves over 1500 subscribers/home and over several hundreds miles of network.

3

The Fiber Optics program is debt-free, cash-flow positive, and owns and operates 30+ miles of fiber that connects homes, businesses, utilities, schools, public safety and wireless providers.

4

By implementing this fiber optic network, Ammon is bringing more economic development opportunities to the area.

Something Unique

After successfully implementing the Ammon model, Bruce Patterson went on to help The City of Detroit build a pilot open-access fiber network that will serve a neighborhood of about 3,200 households. The city is planning to use $10 million in funding from the American Rescue Plan Act to replicate the Ammon model.

Who Should Consider

Rural and small communities that would benefit from internet infrastructure modernization. Cities looking to build municipally owned networks.

Government Project Team

  • Dan Tracy, IT Director, City of Ammon
  • Bruce Patterson, Former Technology Director, City of Ammon

Last Updated

Jul 26th, 2022
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