City directors hear about Clarksville’s internet offering

SILOAM SPRINGS — The city may consider trying to add internet to its list of utilities.

City directors heard a presentation from Clarksville Connected Utilities General Manager John Lester about municipal fiber optic broadband internet during a workshop March 16.

Lester said Clarksville has taken the plunge and started offering internet service to its utility customers.

“We think it’s important for municipalities to have innovative solutions to community issues,” Lester said.

Along with giving the board information about his background and about the history of Clarksville’s utilities, Lester spoke about the city’s journey into broadband internet.

Clarksville began its journey into the fiber optic network in 2016, when it began automating utilities. Under Lester, the utility company introduced Supervisory Control and Data Acquisition systems to automate the utility, installed 288K count fiber, layered the system electronics and upgraded their IT system across the board, as well as adding new Storage Area Network arrays and remodeling their operations building.

Acquisition systems have been used to partially upgrade the electric department and fully automate the city’s water department, Lester said.

“It is automated enough that my water treatment plant manager can literally run the distribution system and the water treatment plant from a smartphone in a deer stand,” Lester said.

As Clarksville continued to build the network out, the city started communicating with the city’s anchor institutions such as municipal offices, county offices (Clarksville is the county seat of Johnson County), Clarksville School District, Johnson Regional Medical Center and most recently Clarksville Housing Authority. Each one of these institutions has its own network on the city’s internet, Lester said.

Lester said he has also connected to Beta customers and developed relationships with Ritter Communications in Jonesboro and Pinnacle Communications in Fort Smith.

Lester then outlined the plan Clarksville used to build its network. The city chose to offer internet and digital phone service, Lester said. Service pricing for broadband include the router, no installation cost and no data caps.

He advised the board not to let an engineering or construction company give the city a recommendation from business cases used by those companies because they can still benefit from that recommendation.

“You want a completely independent third party and that’s what we did,” Lester said. “We took all the costs, provided those to an independent third party who had nothing to gain and we got real numbers that we knew we were comfortable with which will allow us to say it makes sense or not.”

Lester said he used a market research firm to find the take rate, or the number of customers to order the service compared to the total potential number of customers. For example, if Siloam Springs has a potential of 8,400 customers and 2,520 order the service, then the take rate would be 30 percent, he said.

Based on survey results, residents of Clarksville weren’t satisfied with the internet providers and seemed very excited with the idea of the city providing internet, Lester said.

He then asked the city how to proceed, whether it be by issuing debt for the service or looking at other financing mechanisms. Clarksville issued bonds to pay for the service, Lester said.

Clarksville used a nontraditional negotiated bid and hired one contractor who oversaw everyone. The city used Graybar, an electronics company, to provide Clarksville with the electronic components, Lester said.

Lester advised the board that Siloam Springs may need to look at a separate service provider to handle operations and billing software, as well as getting a help desk to handle emergencies at any time of the day or night.

He also gave the board a few different options for proceeding, such as using dark fiber, where another company leases the utility and starts providing service to customers; putting in the electronics and having a company retail the service over the city’s infrastructure making the city a wholesale provider; and open access or having a conglomeration of multiple internet providers provide service and letting customers switch providers when they choose to.

A few of the board members had questions for Lester. Director Carol Smiley asked why someone would change their provider frequently. Lester said different providers may offer different packages. Smiley also asked if Clarksville had lobbyists fight them to get their broadband installed like Siloam Springs did when it tried to provide internet to residents in 2012.

Lester said he did not have that problem in Clarksville, but did have that problem in Chanute, Kan, where he worked as the city manager before coming to Clarksville.

Director David Allen asked about Clarksville’s population and who the incumbent providers were. Lester said the population is just under 10,000 and that Clarksville had Century Tel or CenturyLink for internet and Sudden Link for cable.

Lester confirmed to Allen that Clarksville does not offer cable to its residents. Lester said with all of the streaming options it did not make sense to offer cable.

Allen also asked if Clarksville offers a small business rate for businesses that have one to five employees. Lester replied that most internet providers sell the bandwidth at one price then charge extra for a router and a dedicated Internet Protocol address, while Clarksville offers everything for one price.

Director Reid Carroll asked what will happen when technology advances. Technical Services Manager Phil Sharps said fiber optic cable has been around since at least 1978 and is still being used today. Sharps said 5G towers only reach about 750 feet and still need to be connected to fiber optic cables.

Director Brad Burns said he has received nothing but positive feedback from the community.

“I think the community is starving for a reduced cost and additional revenue stream,” Burns said.

City Administrator Phillip Patterson told the board to take a few weeks to think about the presentation and see if they want him to proceed with coming up with a plan to have the city offer broadband.

“We took all the costs, provided those to an independent third party who had nothing to gain and we got real numbers that we knew we were comfortable with which will allow us to say it makes sense or not.”

— John Lester, Clarksville Connected Utilities general manager