Progress made on fiber optic service

SANDPOINT — Public and private organizations are moving forward on a long-anticipated project to establish a regional fiber optics service.

In a workshop Tuesday evening, project directors met with business representatives and city officials to discuss plans for a fiber optics network throughout Sandpoint, Ponderay, Dover, Kootenai and Bonners Ferry. After months of behind-the-scenes work, project manager U.S. MetroNets, in cooperation with the Panhandle Area Council, have established a financial model and identified an interested service provider, both necessary components to move forward.

Project organizers hope the initiative will serve as a major economic impetus for everyone involved. Since fiber establishes Internet connections able to download dozens of megabytes per second, many analysts identify it as a major factor in the future economy.  

“This is essentially our interstate highway system of the 1950s,” Bonner County Economic Development Corporation director Karl Dye said. “If you didn’t get an on-ramp and off-ramp, your town died.”

The fiber network project’s primary goal is to establish fiber-to-the-premises service for every home and business within the service area, Dye said. In order to do that, however, developers needed a private company to come on board as a service provider. Organizers found an interested party in Blackfoot, a Missoula, Montcommunications company based out of Missoula, Mont. After company officials expressed interest in the project, developers structured a deal early this year.

The distinct financial make-up of the deal is a key element in doing business between so many public and private entities. The primary funding source comes from Idaho Housing and Finance Association bonds issued to Panhandle Area Council. In turn, the Panhandle Area Council will enter into lease agreements with Sandpoint, Ponderay, Kootenai, Dover and Bonners Ferry while maintaining an anchor service provider agreement with Blackfoot. This complicated structure allows the cities to back out of the project at any time. In such a situation, Panhandle Area Council would simply retain ownership of the project.

This structure also aims to establish a lower interest rate over a 20-year period. Since the cities are merely lease services in the overall structure, it doesn’t count as debt, according to project supervisors. In addition, revenues exceeding the lease payments to Panhandle Area Council go back into the communities. The model proved successful for a small community when U.S. Metronets helped establish fiber optics service in Powell, Wyo.

The next step is to establish unilateral community support among the concerned communities. Public officials will address the issue at their respective city council meetings next week.