SiFi Networks to Build Saratoga Spring’s Privately Funded Open Access Citywide Fiber Project: Why this is a good deal for the city, our residents, and local business.
Given how the need for high-quality connectivity has become a necessity at home and at work, improving the City’s technological infrastructure has been a priority of mine for some time. To this end, in August of 2018, the City Council unanimously approved a Development Agreement with SiFi Networks through which the company will design, install, and maintain a citywide fiber-optic network that will reach every home and business in Saratoga Springs at no cost to the city!
There is a small group of people who have taken issue with the length of the agreement, which is for 30 years with a potential renewal of an additional 30 years thereafter. The entire City Council deemed the initial 30-year term appropriate for two main reasons: the service that will be provided; and, the large development/infrastructure scope of the project – think of it as a large-scale utility project like water and sewer.
While wireless technology continues to advance, fiber has the ability to transmit data at the speed of light. Barring a change in the laws of physics, fiber will be the most effective, stable way to send information for the foreseeable future – into the next century and beyond. This stability is especially important for businesses and is one of the reasons this project has the potential to have a material economic development impact. Fiber to fiber ground connectivity between our city Recreation Center and City Hall is the reason essential city services were up and running within 3 days following the lightning strike on City Hall last August. We also have fiber connectivity to our other essential facilities: the Fire Department, the Ice Rink, and the DPW garage – all these tech projects were completed under my tenure as your Finance Commissioner. This connectivity is expensive and it is my hope that with the successful implementation of the SiFi fiber network we will reduce this expense.
As for wireless, 5G is starting to be rolled out in some municipalities and 6G will follow at some point, but it takes years for these technologies to become commonplace, will include many of the same wireless limitations we all deal with today, and will require upgrades in equipment and data plans at no small cost to consumers. From the City’s perspective, I would also note that should the agreement be renewed beyond the initial 30 years, the City shall receive a portion of SiFi’s gross revenue derived from the system, to be paid quarterly.
Additionally, it has been incorrectly stated that “the City cannot terminate the contract unless they pay all SiFi’s costs, investments, plus 10%.” Like any well-crafted legal document, options are laid out should either party not fulfill their obligations. In one such option, the City may purchase the System from SiFi Networks at their cost plus 10%. The City is under no obligation to ever do so, and this language represents just one of several clauses that protect both parties. While I can’t speak for future City Councils, I believe the City would only explore the purchase option if the future benefits exceeded the costs. I have spoken to this point previously at many public City Council Meetings, but I think it bears repeating: the City is never obligated to pay a termination fee, and should a future City Council decide to pursue the purchase option, it wouldn’t just be to terminate the contract but to take ownership of all the related assets.
It is true SiFi Networks has not successfully installed a system of this size in the United States yet. However, they are groundbreaking in Fullerton California and have announced their ISPs https://www.prnewswire.com/news-releases/gigabitnow-to-bring-gigabit-fiber-internet-to-fullerton-california-300825782.html. SiFi Networks has similar agreements in place with several other municipalities across the country, all of whom the City spoke with, and SiFi was chosen because of the quality of their response, the pedigree of their team, and the industry experts they have partnered with, such as Nokia. SiFi approached the City because of the Smart City steps we had taken, and I take pride that our community was selected by the company as an ideal location to roll out a service that can benefit residents and businesses City-wide.
The City and SiFi have aligned interests to build a cutting-edge fiber network that reaches every Saratogian, that provides fast and reliable connectivity at an affordable price, and to work with high-quality Internet providers that can meet the individual needs of City residents. The project is still in the design stage, but I look forward to updating the City Council, and the public, on our progress and expectations moving forward.