Article by Wayne Heilman & Jeanne Davant, Senior Writers – SOCO Digest
Colorado Springs-area residents are beginning to realize the promise of faster and less expensive internet access as three fiber-optic providers expand service capable of “multi-gigabit” download and upload speeds.
Colorado Springs Utilities and high-speed internet providers Underline Infrastructure and Metronet launched construction of their networks between late 2021 and late 2022. Underline and Metronet are serving customers in different parts of the area. Springs Utilities is not providing direct internet services to customers but has contracted with Ting to do so. The area’s two largest internet providers, Comcast (Xfinity) and Lumen Technologies’ CenturyLink unit, are investing heavily in upgrading their networks, and Comcast has cut its prices.
“We are creating a competitive marketplace that will force everyone to get better,” says Underline CEO Bob Thompson. “We have laid 2.5 million feet of fiber that will be available to 70,000 homes by the end of September, and we have done it on time and under budget. We have committed more than $100 million to this project.”
The Dallas-based company is expanding its footprint in the Colorado Springs vicinity, which was its first market, he says.
Comcast’s prices have fallen from $60 a month for 50 megabit-per-second service to $19.99 a month for 150-megabit-per-second service, while the price for one-gigabit service has dropped from $110 to $75 a month. Metronet has cut its prices from when it announced plans to build its $130 million network in Colorado Springs by $10 a month for its 100-megabit-per-second service and $20 a month for its one-gigabit-per-second service.
Comcast also has been spending heavily to upgrade its Colorado Springs network, and all 240,000 Colorado Springs-area customers now have access to two-gigabit-per-second service, says Leslie Oliver, a company spokeswoman. Comcast began rolling out new technology about a year ago in Colorado Springs, the first market in the nation to receive it, enabling multigigabit symmetrical speeds.
Lumen said in an email statement that it has more than doubled the number of area households that can access its Quantum Fiber service during the past two years to 86,000. The service is available at $50 a month for 500 megabits-per-second, $75 a month for 940 megabits-per-second and $95 a month for 2 gigabits-per-second. Those rates are guaranteed for as long as the customer keeps their plan.
“Competition drives pricing — we are offering a $100 gift card for new subscribers, depending on the speed [they order],” says Kris Smith, a former Monument resident who is Metronet’s senior vice president for a region that includes Colorado and four other states. “Several of us [fiber providers] recognized the need for choice. The market is underserved in Colorado Springs. Better service and pricing are good for residents.”
If all three organizations complete their plans, many area residents will eventually have multiple choices for internet access at speeds of one-gigabit-per-second or more, including Comcast, CenturyLink and one or two of the fiber providers. While Ting will offer service wherever the Springs Utilities network goes, executives from both Underline and Metronet say they will not build in areas already served by another fiber provider.
That will make for a crowded market, according to one analyst.
Ray Gifford, managing partner of law firm Wilkinson Barker Knauer’s Denver office and former chairman of the Colorado Public Utilities Commission, says competition from the upstarts in the fiber industry is challenging cable, which has been the dominant broadband platform in the 21st century, and customers are benefiting.
In the cellular industry, “at least three and, in most cases, four players nationwide are duking it out pretty successfully,” he says.
But in the current broadband landscape, which includes fiber and wireless 5G players, “investing in multiple networks could mean not that one succeeds [but that] all of them fail because they compete so ferociously against each other that none of them can cover their fixed costs,” he says.
Two broadband providers in a market “is a party, three is a crowd and four or five is unbelievable,” Gifford said in a 2022 interview with The Gazette.
“I still think five networks is going to end up being too many,” Gifford says. Those that succeed likely will be well capitalized and have deep pockets, while the rest will be unable to defray fixed costs across a large enough customer base to be viable.
In the short term, “it’s going to be a consumer bonanza — prices will go lower, speeds will get better,” he says. “The question is, is that sustainable over the long term? Experience says no.”
What has played out in network markets again and again, he says, is that “after the initial multiple entrance phase, you have a wave of consolidation and retrenchment.”
An update on major local fiber providers:
- Underline now provides internet access to Cheyenne Mountain School District 12, Colorado Springs School District 11 and Harrison School District 2 and is available to residents living within those three districts, which includes much of Colorado Springs. Thompson says the company has completed about half of its network and expects its network to be available to more than 100,000 households within the next year and a half.
The company charges $49 a month for 500-megabit-per-second service, $65 for one-gigabit-per-second service and $295 a month for up to 100-gigabit-per-second service with cybersecurity and disaster recovery services for businesses.
Colorado Springs and Fountain are the only cities served by Underline, but Thompson says the company expects to announce plans by year’s end to build networks in up to 10 other cities and up to 100 cities within 5-7 years. Underline is funded by America Online founder Steve Case and Laurene Powell Jobs, widow of Apple founder Steve Jobs, but Thompson says the company will need to raise both debt and equity capital to expand.
- Evansville, Indiana-based Metronet has laid one million feet of fiber, starting in the Briargate area, but is now expanding into the Cimarron Hills neighbor in east Colorado Springs, downtown and the west side of Colorado Springs, Smith says. The company’s network is about half complete and is scheduled to be finished by early 2026, but the company and its contractors have damaged Colorado Springs Utilities infrastructure 89 times in the past two years and paid fines totaling $433,500.
Smith calls the damages “unfortunate” and adds that Metronet has since joined Springs Utilities’ Damage Prevention Team and has “a wonderful relationship” with the city-owned provider of power, natural gas, water, wastewater and storm drainage services.
A joint venture of wireless giant T-Mobile and private equity giant KKR agreed in July to acquire Metronet, which operates networks in more than 300 cities in 17 states which are available to more than two million homes and businesses. Metronet will become a wholesale provider for its retail customers, who will become T-Mobile customers once the transaction is completed next year. T-Mobile will sell Metronet’s service and provide customer support.
- Utilities is building its $600 million fiber network to serve future utility functions, rather than to connect individual customers to high-speed internet, says Thane LaBarre, manager for the Springs Utilities network transport services team.
“This is the infrastructure that gives us the ability to control microgrid situations in real time, to manage demand and account for the generation coming out of that and how it fits within the overall scheme of things — and there are a lot of other pieces,” LaBarre says. “The fiber is really a pathway to provide for that data communication.”
Utilities signed a 25-year, $593 million lease in 2022 for Charlottesville, Virginia-based Ting to provide service from the Springs Utilities infrastructure to residential and commercial customers, and the network will have additional capacity for other service providers, LeBarre says.
Construction is underway in the Austin Bluffs and Woodmen areas and is scheduled to begin soon in the Rockrimmon and Cragmor areas, he says. Pacific, Missouri-based ADB Companies is the prime contractor.
Colorado Springs Utilities was targeting 2028 for completing the 2,000-mile network, but LaBarre says completion likely will take longer because of recent delays and changes to the construction team.
Although “CSU has the right to install the infrastructure in the right-of-way or easements CSU has access to, some of the communication [in affected areas] has been lacking, in some of our early work, and there was a lot of confusion around that,” LaBarre says. “We’re making changes to make sure we have that communication shored up.”
Ting is offering two-gigabit-per-second service to homes at $89 per month and basic business service at $139 per month. Deb Walker, Ting’s regional community engagement and public affairs manager, says Ting does not publicly release the number of customers it has but at the end of the second quarter, “we had just shy of 9,000 addresses that we could serve.”
- Mountain View Electric is spending $190 million to build a 5,800-mile fiber-optic network to serve its more than 50,000 members with service available to about 10,000 households in the Falcon and Limon areas, despite initial construction delays, according to a story in the co-op’s customer magazine. Another 8,000 households in parts of the Black Forest area are expected to have service available by year’s end with construction following in Calhan. Mountain View has received three state grants totaling $2.72 million to build the network in rural areas.
- Elsewhere in the Colorado Springs area, Stratus IQ provides fiber-optic internet service in parts of Colorado Springs and El Paso County and will offer service over Underline’s network. Force Broadband, a local company, has been providing fiber internet service in Monument for several years. Fiber-optic cable was laid along several blocks of Manitou Avenue during an infrastructure improvement project, but it has remained untapped.
- Both T-Mobile and Verizon offer home internet service over their wireless networks, but at speeds of up to 250-300 megabits per second. T-Mobile says in a statement that it is too early to determine whether the company will continue to offer the service locally after it acquires Metronet.
