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Cortez approves leasing city’s fiber optic system to Montrose, Denver companies

Vero Broadband and Clearnetworx were chosen by the City to provide fiber networks to the community. (Casey Irving/Courtesy photo)
The decision comes after over 25 years of work and planning

The city of Cortez approved leasing its fiber optic system to provide broadband services to residents and businesses in the city at the council meeting Feb. 28.

The city began thinking through the idea of creating its own broadband to help with the “dire need” in 1996, according to City Manager Drew Sanders. The original design provided services to the city government and their partner organizations such as the hospital, school district and Montezuma County government.

While the original idea had some merit, Sanders said it didn’t provide enough resources to offer broadband connectivity access to residents or other businesses in the area.

“It was too small to be useful to all residents and businesses, but too big to walk away from,” Sanders said.

The plan was put on the back burner until 2020, when the city revisited the plan and decided to commit to a full build-out of the system. In 2021, they took the plan to voters with SB 152, seeking to see how citizens felt about the city becoming a broadcasting service provider.

The vote passed June 8, 2021, with 72% of voters approving the measure.

After the vote, the city originally planned to bond for the cost of a build-out of the broadband systems while finding a company to contract with to run the system, saying, “Associated Service Revenue would presumably cover the bond service payments.”

As they began looking at the numbers, however, it became clear the plan in place wasn’t the best plan for taxpayers or the city. The full cost of the build-out for this plan would cost about $14 million, and once the 3% interest rate was tabulated, it would end up costing $24.35 million over 50 years. The annual debt service would cost about $541,000 and the bond/interest cost would be about $10.35 million.

To determine the best new direction, the City’s General Services Director Rick Smith connected the city to Doug Dawson from CCG, a telecommunications consulting firm. After nine months of weighing various options, they found a new way forward.

Sanders said they “engaged in an RFP (request for proposal) process for the purpose of engaging a partner company who would lease, manage, maintain and achieve full build-out of the existing network.”

The proposal presented to the City Council proposed leasing the system to Vero Broadband and Clearnetworx for 50 years. Under this deal, the city would retain its use of internal fiber connecting the city’s facilities at no cost, while Vero and Clearnetworx would pay the city $1.8 million up front for the ability to lease the existing fiber network, if approved. The city invested $1.6 million.

After the approval, Vero and Clearnetworx would complete a full fiber optic build-out to all residential homes and businesses within the Cortez city limits.

After Sanders’ presentation, representatives from Vero and Clearnetworx spoke to the City Council to convey their part of the plan. Present were Vero CEO Jonathan Adelman, Clearnetworx owner Doug Seacat and Clearnetworx’s Director of Business Development Casey Irving.

Vero, which is in Denver, was founded in 2017 by veterans in the telecommunication field with the purpose of delivering fiber to school districts. Adelman said they take a whole community approach, providing fiber to schools, business governments, residential homes and more. They also operate in Durango.

Clearnetworx said it has a “focus on serving communities with fiber-based broadband in markets across the country.” They provide services in Durango, Telluride, Silverton, Ouray and Grand Junction, as they are looking to target small cities.

Clearnetworx is based in Montrose and noted that they have in-house contractors, planning and asset management to take the project all the way. They are also applying for grants to help fund the project.

“We’re excited to be part of your community,” Seacat said. “It was in our hearts to do that, so we’re excited.”

After explaining where they were from and what their companies were about, they went into what they could offer the community for Internet. They said they would provide Internet speeds of up to 10 gigabits per second and Wi-Fi 6. Prices for residential homes range from $60 to $100 per month, while businesses would pay $100 to $400 per month.

They emphasized availability and affordability, saying residents wouldn’t have to worry about hidden fees.

They also offer government-funded subsidy programs and community-focused impact programs that include connecting Colorado students, small businesses and low-income housing among other programs.

Irving told the City Council they are committed to what they call “co-opetition,” or partnering with competing providers in the area to build strong relationships in the community. Partnering with local subcontractors and boosting the economy in Cortez was another goal they shared.

After their presentation, the City Council unanimously approved leasing their fiber broadband to Vero and Clearnetworx.

Councilman Robert Dobry noted that Vero and Clearnetworx were the only companies to hit all their goals when deciding whom to lease the city’s fiber.

“None of this would have been possible without the patience and guidance of our City Council,” Sanders said.