Mesa spurs cable companies’ digital gold rush

Sep 06, 2023

In their pursuit of a fiber optic internet network in Mesa, considered by industry to be the next gold standard for digital connectivity, city leaders are putting their trust in the open market.

The city has created a process for an unlimited number of companies to apply for licenses to install fiber optic in city rights-of-way so it can be delivered to customers to stream movies, video chat or work remotely.

Officials hope that by opening the doors for fiber providers, Mesa will be more attractive to businesses, and residents will see greater competition among internet service providers – in theory lowering prices.

On July 11, the city council approved a first wave of licenses for private companies to install fiber optic cable, and they have high hopes that the companies will follow through on their expressions of interest in bringing fiber optic internet to Mesa customers.

Only two companies were lined up for approval the week before the vote, Google Fiber and SiFi Networks, but in the meantime two additional companies finished the application process, Ubiquity and Wyyerd Fiber.

The city is leaving the door open for additional internet providers and access companies to apply for a license.

In theory, the licenses mean that Mesa residents could have four different companies dig "microtrenches" along their street and lay fiber optic cable.

Microtrenches are slots cut into the road about 2 inches wide and a foot deep placed as close to the curb as possible.

Contracts with the four companies stipulate that licensees must install the cabling using this relatively new technique, which city staff said would minimize construction time and require less traffic disruption.

Fiber installations would also have above-ground structures associated with them, similar to the utility cabinets and pedestals associated with current broadband internet service.

Ian Linssen, assistant to the city manager, said the city anticipates installations to begin in about six months.

It's possible, but unlikely, he said, that multiple fiber providers will come through a neighborhood.

"You could have four different right-of-way users today go through if they were so inclined," Linssen said. But "the way that we see the market playing out is not necessarily that."

The contracts with the fiber companies also encourage "joint trenching" when possible.

Mesa made a deliberate decision to open its right-of-way to multiple private providers over other strategies for installing fiber optic cable, which uses ultrathin strands of pure glass to transmit data via light signals.

Staff touted the technology as delivering internet even faster or more reliably than the current network based on copper wire.

The city had looked at putting in fiber optic infrastructure on its own, a project estimated to cost $500 to $800 million.

This would have put the initiative in the territory of the most expensive infrastructure project ever undertaken by the city.

Mesa could have also worked out an exclusive deal with one or more providers to install the hardware, but the city hopes that by making its right-of-way available to multiple comers, Mesa will get fiber in more quickly and cheaply than otherwise.

Mesa Mayor John Giles said that one reason the city decided to go in this direction was the robust response the city received when it put out a Request for Information to the industry to identify potential partners to install fiber across Mesa.

The city received seven credible responses.

"The great thing about what we tried to do here is we said ‘look, the city is not going to pick any one of these companies,’" Linssen said. "We’re going to let the marketplace pick, and so the market will get to decide how (installation) works."

Mesa's fiber RFI included its desire to see internet access distributed equitably across the Mesa. The city wants partners to help "bridge the digital divide" of internet access between socioeconomic groups.

Would the open market be able to spread fiber optic interest across all parts of the city and demographics?

Council member Francisco Heredia asked Linssen about this during the study session the week before the vote.

"How are we as a city (ensuring) that all neighborhoods are getting fiber as it goes along, so that it doesn't take five, 10, 15 years for folks to get this type of service?" he asked.

Linssen acknowledged the limitations of the marketplace in this regard.

"Really the only way that we can guarantee that every premise is covered is if the city invests in this," Linssen said.

However, Linssen and City Manager Chris Brady told council members that one way they hope fiber will promote internet equity is by bringing down prices through increased competition, making internet access more affordable for more residents.

"There's no guarantee in any of these agreements that requires (companies) to provide city-wide (fiber) access or coverage," Brady said, "but we do want to believe it’ll (come) pretty quickly if competition is driving that pricing picture."

Linssen said the city also has two tools it can use to promote the distribution of fiber to all corners of the city.

One, the contracts give companies the option to provide services to the city in lieu of an annual right-of-way fee. These services might include putting infrastructure in less lucrative parts of the city or providing subsidized service to low-income residents.

One company, SiFi Networks, has already agreed to a deal like this.

In lieu of its annual right-of-way fee, SiFi plans to provide "discounted broadband services for up to 33,000 income-eligible households on their Mesa network, helping to close Mesa's digital divide," a staff report states.

Linssen said that the city will also be monitoring where cables are going in and where they are planned to go in.

As part of their license, he said, fiber companies are required to submit a three-year forecast of where they plan to install their cables.

"We will know in advance kind of where things are going," Linssen said. "Let's say we get to that scenario, and we’re not seeing them proliferate the way we’d like. We can kind of think, is there a different type of strategy that needs to happen here?"

"But again, our counsel is really strong proponents of ‘let's let the market do its thing,’" Linssen continued, "and we think that's going to pay dividends for the community."

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