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Letter to the Editor: Decorah communications utility is not dead

Posted: Sun, Oct 8, 2017 6:55 PM

(The following Letter to the Editor has been released by the Board of Decorah Fast Fiber):

Decorah Fast Fiber wants to correct the impression that the drive to create a municipal telecommunications utility in Decorah is over.  Yes, a feasibility study conducted by Uptown Services presented a pessimistic picture of creating a fiber optics utility in Decorah, but Decorah Fast Fiber continues to find plenty of information that supports creating such a utility.
    The most significant result to take away from the feasibility study is that 72 percent of the 400 City of Decorah residents surveyed said they either "definitely" or "probably" would become customers if the city created a communications utility. This result is in keeping with what the people in New Hampton, Waverly and Osage told us when we visited those three communities recently to gather additional information.  According to New Hampton Utility General Manager Brian Quirk, "Every existing municipal communications utility in Iowa has a take rate of at least 70 percent."
    Uptown Services took this 72 percent positive response and adjusted it until they came up with a prediction that only 38 percent of Decorah residents would become utility customers. First, they took the 40 percent of those surveyed who said they would "definitely" become customers and claimed only 28 percent would sign up, then they took the 32 percent who said they would "probably" become customers and predicted only 10 percent would sign up. We believe that the customer sign-up rate will be much closer to the actual survey results.
    During our own research process, we contacted an Iowa State professor recognized as an expert in survey methodology.  After review, Zhengyuan Zhu, Director of the Survey Methods Research Section of the Statistical Laboratory at Iowa State, remarked, "This adjustment is indeed rather ad hoc. I don't know any references which justify the kind of down-weighting they did."
    Secondly, Uptown Services reduced the 38 percent take rate to 30 percent by predicting another 8 percent of potential customers would be lost to Mediacom when (or if) it started offering 1GB "DocSys3.1" service in Decorah.  However, Uptown's survey also said only 33 percent of Decorah customers were satisfied with Mediacom's service, while 68 percent would prefer having the City of Decorah as their Internet provider.
    There are additional reasons we question the report by Uptown Services:
 --They discovered through their survey that "Two-thirds of Decorah households support the payment of a monthly $5 surcharge to help fund the new fiber network." Paying this surcharge is casting a vote in favor of a city communications utility, but with your wallet.  Uptown Services dismissed this result as "not a game-changer," even though this could provide $120,000 a year for operating the utility.
--Uptown dismissed the importance of Metronet in their findings.  We know Metronet is an asset to our community and we believe a publicly owned telecommunications utility would be a valuable asset for all residents and businesses of Decorah.  Uptown did not reduce the cost of creating a utility in Decorah, despite the presence of Metronet, and also cited start-up equipment costs that were higher than those we were told by neighboring communities.
--They projected that the city will need 11 employees to operate the utility.  Our research shows that Waverly and Osage are operating their telecom utilities with fewer employees.
--Uptown said the biggest operating expense would be the debt service--interest payments on the money borrowed up front to build the network.  The study did not consider potential funding sources that would have lower interest rates.
--Finally, Uptown said the 3,000 homes and businesses in Decorah were "not a lot."  They must not have known that Osage, New Hampton, Charles City, Vinton, Waverly, Independence, Maquoketa and other smaller and slightly larger cities than Decorah have started municipal utilities or are in the process.  Osage has a population of 3,624—less than half that of Decorah.  Osage Utilities Manager Josh Byrnes said 1,230 out of 1,750 possible customers in Osage have signed up for high speed internet service (70 percent).  Josh said, "We will have the bond paid off next year for telecommunications."
     Decorah residents support a city communications utility and want to see it created and developed. The referendum on exploring a city communications utility got 93 percent approval--the highest ever recorded in the state!  The telephone survey got a 72 percent positive response when people were asked if they would become customers.  The same survey showed 62 percent of people were willing to give $60 a year to the city to help make the utility a reality.
    Decorah Fast Fiber supports and has offered to pay for a complete mailed survey to all City of Decorah residents to get a more accurate figure of potential customers.  That's because we still think a municipal communications utility is an excellent idea.  Other area cities are ahead of us.  Will we miss out on attracting new residents and businesses?  High-speed fiber optic internet is the business park of the 21st Century.
    If you agree with us, please contact your city council representative immediately to show your support of the municipal telecommunications utility."