Gigabites: Where Goes Oswego?

Franchise fees are a major sticking point in Google Fiber's negotiations with the city of Lake Oswego in Oregon.

Mari Silbey, Senior Editor, Cable/Video

May 6, 2016

3 Min Read
Gigabites: Where Goes Oswego?

Happy Friday! In this week's edition of Gigabites, two Oswego cities evaluate their gigabit choices, Frontier prepares to roll out a gigabit service tier in Hartford, Connecticut and more.

  • Google Fiber Inc. is exploring gigabit partnerships with a number of cities around the country, but it's running into some resistance in Lake Oswego in Oregon. The main sticking point? Franchise fees. Google Fiber wants Lake Oswego to calculate franchise fees based solely on the revenue it collects from video subscriptions, but that runs counter to the agreement the city already has in place with Comcast Corp. (Nasdaq: CMCSA, CMCSK). Comcast has to report total earnings from all revenue sources, and the city charges the cable company accordingly. If Lake Oswego changed the rules for Google Fiber, it would be obligated to do the same for Comcast... at a cost of up to $77,000 per year.

    There is a potential workaround for Google Fiber if the city can argue that the company should not be classified as a traditional cable provider. There's some merit to the argument because Google Fiber earns revenue through targeted advertising rather than through a single slate of ads broadcast to an entire region. The company says that makes it harder to calculate ad revenue that would pertain to the local franchise agreement.

    Lake Oswego officials, however, aren't ready to commit to adjusting Google Fiber's classification status. Not only are franchise fees at issue, but Google Fiber also won't promise to deliver services universally throughout the city, and it won't guarantee a timeline for deployment, even to the extent of targeting a specific calendar year.

    Meanwhile, Lake Oswego is also considering building its own city-owned fiber network, but that process won't move forward until the public votes on the issue in November.

Learn more about gigabit networks at our upcoming Big Communications Event in Austin, Texas, May 24-25. You can register now.

  • Across the country in another Oswego... the service provider MetroNet is negotiating with the city of Oswego in Illinois for a franchise agreement to bring gigabit broadband, TV and phone service to that region. Discussions don't appear to be as fraught as those in Lake Oswego, Oregon. MetroNet is promising to launch the triple bundle within the next year and says it would deliver a faster Internet service at a comparable price to what Comcast charges for slower broadband today.

    • Over on the east coast, Frontier Communications Corp. (NYSE: FTR) is planning to bring more gigabit services to Hartford, Conn. The telco, which has also promised to invest in the broadband markets it just acquired from Verizon, says it will use GPON technology for its network rollout in Hartford's North End. Frontier has already deployed high-speed broadband in West Hartford, North Haven, New Haven and Stamford in the state. (See also Frontier Takes Over FiOS Tomorrow.)

    • And finally, the city of Atherton near Palo Alto and Menlo Park in California is also on the verge of getting gigabit service. A startup company called Atherton Fiber says it hopes to bring its first customers online before the end of the year at a cost of about $100 per month for gigabit broadband.

      — Mari Silbey, Senior Editor, Cable/Video, Light Reading

About the Author(s)

Mari Silbey

Senior Editor, Cable/Video

Mari Silbey is a senior editor covering broadband infrastructure, video delivery, smart cities and all things cable. Previously, she worked independently for nearly a decade, contributing to trade publications, authoring custom research reports and consulting for a variety of corporate and association clients. Among her storied (and sometimes dubious) achievements, Mari launched the corporate blog for Motorola's Home division way back in 2007, ran a content development program for Limelight Networks and did her best to entertain the video nerd masses as a long-time columnist for the media blog Zatz Not Funny. She is based in Washington, D.C.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like