For the third year in a row, Sen. Tom Whatley, R-Auburn, is going to battle in Montgomery over a set of bills that would allow Opelika Power Services to expand its gigabit internet service, one of the fastest in the state, outside of the city limits.
Between Whatley and Rep. Joe Lovvorn, R-Auburn, the pair have proposed four different version of a similar plan.
The bills are intended to allow OPS to expand its internet service into underserved neighborhoods in North and South Auburn, according to the sponsors and Opelika Mayor Gary Fuller.
OPS, owned by the citizens of Opelika and operated as a department of the city of Opelika, has been a public utility since 1911.
One version would allow it to expand into the four counties surrounding Lee County. Current Alabama law doesn’t allow municipal service providers to expand beyond their municipal jurisdiction.
The second version of that bill would require a state referendum.
A third version of the bill would only allow OPS to expand into the rest of Lee County, including the city limits of Auburn. Whatley said he is pushing this version of the bill hardest this year because it is “most likely to pass.”
In 2010, the people of Opelika voted in a referendum to OK a plan that would allow Opelika Power Services to take out a revenue bond of more than $20 million to establish its internet services, which included more than 425 miles of fiber infrastructure.
Another $23 million revenue bond was used to update OPS facilities and upgrade the power grid to a “smart grid.”
“We needed fiber in order to fully deploy smart grid,” Fuller said.
The capital was used to make Opelika the first “GIG City” in Alabama, a designation for internet services that offer gigabit download speeds. Though OPS is a part of the city government, the bond is not backed by the full faith and credit of the city. Instead, it is backed by OPS’s revenue.
When the city began pursuing the plan, Opelika was only being serviced by one internet service provider, Charter Communications.
“They were charging predatory prices because there was no competition,” Fuller said.
Some areas in Auburn and Lee County are still only serviced by one ISP, and other areas have no broadband internet service at all.
Whatley said he wants Opelika Power Services to be able to expand to provide service to areas that are currently underserved by traditional private internet service providers, which include WOW!, Charter Spectrum and AT&T in Lee County.
“Many of those areas in Auburn, some of them right across the street from Opelika, they don’t want to serve because there are not enough homes per mile,” Fuller said. “We think we can do better than that.”
Some families in northern and southern Auburn neighborhoods, OPS’s likely expansion territory, pay hundreds of dollars per month for cellphone data plans because high-speed broadband internet is not available in their area.
The Auburn City Council has tried to work with the big three internet service providers in the city over the past year, enticing them to begin servicing some underserved areas like the Plainsman Hills, Autumn Ridge and The Preserve, but with not much success.
“They are still, at this point in time, not meeting all the needs of the people,” said Ward 2 City Councilman Ron Anders. “If the city of Opelika can provide that service for those people in that part of our city, then I’m all for it.”
Anders said he is not one to usually recommend an expansion of government function, but he believes an OPS expansion, in this case, would be positive for the people of Auburn. He recalled one mother who was paying almost $700 in cellphone bills so her daughter could have internet access for homework. Their home is not being served by any broadband provider.
“There are people in a quandary,” Anders said. “They are looking for help, and if OPS can be that help, then I’m all for it.”
Private-sector providers have chosen not to expand into some underpopulated areas of the city because they do not meet their density requirements. OPS has said it is willing to serve these areas.
“I would love for private industry to serve Beauregard, North Auburn, South Auburn, but they have made an economic decision not to, and I have Opelika that is willing to,” Whatley said.
Whatley said the expansion was also important for business in Lee County.
“Twenty years ago people asked what your water looks like, what your sewer looks like and how your schools were,” Whatley said. “Today they ask what your digital footprint is. What is your ability to move large sums of data at high rates of speed between my parent company and where I am here?”
The expansion is particularly important to provide high-speed services to first-tier support businesses in and right outside of Opelika on the Interstate 85 corridor that provide parts and support to the KIA automotive plant across the border in Georgia.
“Right now, the answer is we can’t provide you with that high-speed service because we don’t have it,” Whatley said. “This bill would hopefully change that.”
Several groups, including the Alabama Cable Telecommunications Association and the Taxpayers Protection Alliance, have spoken out against Whatley’s plans and OPS’s service in general, saying that the project is government overreach.
“Fundamentally, we don’t believe that this is a government function, providing cable broadband, TV service and phone service,” said David Williams, president of the Taxpayers Protection Alliance, based out of Washington, D.C.
TPA has tracked municipal broadband internet services in dozens of cities across the U.S., documenting what they say are failures. Cities like Provo, Utah; Chattanooga, Tennessee; and Memphis, Tennessee, have tried similar plans, but to no avail, Williams said.
OPS officials have said they look to Chattanooga as a model for good service. Their service provides GIG access, nearly 50 times the average internet speed in the U.S., for less than $70 per month, according to a CNN report. A New York Times report called the internet service Chattanooga’s new “locomotive.”
Opelika Power Services currently offers GIG internet access plans for less than $95 per month. Less expensive plans with 100 megabit speeds, still vastly faster than other internet plans, are less than $65 per month.
Williams doesn’t buy it.
“Every city wants to be the next Silicon Valley. They want to be the next GIG city because they think that by building these broadband networks, that’s what is going to do it for them,” Williams said. “It sounds like a good idea, but it just doesn’t work because government is not good at providing things like this. They should not be in this business.”
If the project goes under, they say it would be on the backs of Opelika taxpayers.
“Part of our major critics’ emphasis has been on that we are using taxpayer money,” Fuller said. “There’s no way it could affect taxpayers because there are no tax dollars pledged to security for the bonds.”
But since the internet service launched in 2013, the city’s utility provider hasn’t broken even on the project. As part of OPS’s original five-year business plan, the utility expected to take a loss on the internet service division. After the first five years, they expected to make a profit.
“At some point, we hope it will make a profit,” Fuller said. “That will give us more money to invest in infrastructure, public safety, libraries, schools. We’re not just giving it away. A lot of them just don’t want to compete with us, but they also don’t want to serve those neighborhoods.”
Whatley’s bill will go before the Senate Transportation and Energy Committee on April 5.
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Chip Brownlee, senior in journalism and political science, is the editor-in-chief of The Auburn Plainsman.
