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Glad to see Longmont still believes in the markets

Posted November 22nd, 2013 in Broadband, capital, municipal bonds and tagged , by Alton Drew

Last Wednesday the National League of Cities hosted a webinar on broadband and the agriculture industry. It was informative, shedding light on the many uses of broadband made by the modern farmer. Farmers use broadband to remotely monitor and collect data on soil moisture and weather, which leads to avoiding soil and crop damage. Broadband is also used to live stream equipment and live stock auctions, advertise farm products, and gather pricing and industry information.

Safety is also a concern for America’s farmers. Mobile devices are used by farmers to assess the health of livestock; track livestock, and protect equipment.

Broadband also incentivizes the young to remain in farming communities by providing a method for maintaining contacts outside of the community.

Although the fixed costs of deploying communications facilities are about the same in urban and rural areas, the actual costs of providing broadband services to consumers in sparsely populated areas raises is more expensive. While these costs have raised barriers to entry to most private broadband providers, municipalities like Longmont have gone ahead with providing their own high-speed Internet facilities.

Instead of using universal service funds for financing the project, Longmont Power and Communications’ Vince Jordan told me that Longmont found it more straightforward to access the bond markets versus USF to get broadband going.

“There’s a lot less paperwork and reporting requirements involved with bonds versus federal subsidies”, Mr. Jordan said. Mr. Jordan explained that revenue bonds are much more straightforward, but encouraged other municipalities to get financing however they could.

Longmont was able to go after $34 million in bond financing on the strength of its utility plant, Mr. Jordan said. Sixty-seven percent of the city’s voters approved the bond issue.