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Tuesday, May 3, 2016

Fiber optics is paying off for City of Monett

Friday, November 20, 2009

Broadway at dusk.
Fiber optics, a resource added to the infrastructure of the Monett Electric Department over the past five years, is quietly and steadily making money for the city. Although the system has expanded very little in the past year, Utilities Superintendent Pete Rauch was pleased with what the fiber optics system has achieved for the city.

"We've got about $250,000 in annual contracts," Rauch said. "We've done what we hoped to do."

The city presently has about 30 miles of fiber optics backbone laid around Monett. The amount is small, compared to several hundred miles of electrical lines. The fiber optics, however, allows for a substantially higher volume and quality of information transfer, such as high speed internet service and voice-over-internet protocol.

According to Rauch, the city got into fiber optics to establish a better link between its well system. Five years ago wells were connected by a radio system. The fiber optics link enabled monitoring and controls for all the city wells to be placed on one computer-based system that can be run from city hall.

A similar link for monitoring purposes has since been established for the waste treatment plant. The plant itself has been wired with fiber so operators can run the various systems from the administration building instead of going to each station to take action.

"As long as the fiber was out there, we took advantage of the situation to connect commercial and industrial customers," Rauch said.

The city has not heavily marketed the service. Customers initially signed up through Ozark Electric. The city later got interconnection agreements with Empire District Electric and KAMO, the Kansas-Arkansas-Missouri-Oklahoma system. Private firms like Kevin Wormington's Missouri Telecom sell the service to individual customers.

Rauch said the city system provides the link for the Monett R-1 School District campuses. A contract was signed by KAMO to serve Cox hospitals. As the provider of the last mile of service, the city gets a portion of hospital contract revenue, just as Springnet, the fiber optics division of Springfield's City Utilities, gets a piece of the contract for the connection to the corporate office.

"Once a customer has been established, we do some software tweaking and monitoring of the system," Rauch said. "We pay a consultant to set up the service. No one on staff does that."

To make the city's fiber optics system grow significantly, Rauch said a substantial marketing effort would have to be launched. More city staff would need to be hired and the companies doing the interconnection would need to do the marketing.

Rauch saw no need to take that step now. He felt city council members agreed with him that the service was doing its job and running fine as it is.

One benefit Rauch saw from the city's introduction into the fiber optics field was a response by the cable TV firm serving Monett. Initially the cable company had not planned to upgrade its coaxal cable system in town to fiber for about five years. Once the city installed fiber, the cable company was not far behind.

In other states, municipal utilities have expanded into cable TV and other services using fiber optics. Rauch said Monett gets a good franchise fee from its cable provider and does not need to consider such expansion.

Lawsuits that went to the Missouri Supreme Court ultimately have limited what municipal utilities can do in the telecommunications field, Rauch said. In many states, cities offer "the triple play" with telephone, cable TV and high speed internet. Under current restrictions, Monett can serve hospitals and schools and gain revenues through last-mile-service in contracts with sister utilities.

The cost of building the fiber optics system was initially paid by electric department revenues. Rauch said revenues from the fiber service will finish paying the debt back over the next two years. Money from the fiber program is also going toward consulting expenses and into hardware or software upgrades.

"It's safe to say half of that overall growth in sales is revenue beyond cost," Rauch said.

"Fiber optics has become a nice little side business for us. It's providing a service to the community that we wouldn't otherwise have," Rauch said.

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