Special election issue in North St. Paul: Build a municipal fiber-optic system?

We now know that elections can last into February, at least the counting, but it's not often that voters actually go to the polls during the shortest month. But that's what's happening in North St. Paul on Tuesday, when voters will be asked to vote in a special election on whether to institute a new fiber optic system for telephone and Internet service.

On its Web site, the city says it wants to build the network to offer "residents another choice for cable, Internet, and phone service. Providing this local service to the residents in North Saint Paul will allow you to purchase cable, Internet and phone service; provide better educational opportunity for students and adult learning, and may help stimulate economic growth within the City."

Opponents, though, say that's already available from the private sector — Qwest, Comcast and other providers.

They want to call it PolarNet. The local high school teams are called the Polars. (The city's mascot, though, is a Snowman.)

The city says, if approved, the $18.5 million project would be funded by issuing general obligation bonds. The hope is that the bonds would be repaid with fees from residents subscribing to the phone, Internet and cable services. But if there isn't enough revenue, the city would raise property taxes to pay back the bonds.

A sample ballot includes the warning: 

"YOU ARE VOTING FOR A PROPERTY TAX INCREASE. BUT PROPERTY TAXES WILL ONLY BE LEVIED IF NET REVENUES FROM CUSTOMERS ARE NOT SUFFICIENT TO MAKE SCHEDULED BOND PAYMENTS."

A group actively opposing the plan, Coalition for Responsible Broadband Choice, says it is made up of "the Minnesota Cable Communications Association, Comcast, Qwest, local Chambers of Commerce, local businesses, and hundreds of North Saint Paul citizens."

The group says the proposed plan will be redundant and potentially costly to homeowners.

And while some critics say the plan is being rushed forward — the City Council approved the vote in December — city officials say they've been considering the plan since 2003. And documents obtained by the opposition coalition, include a consulting firm's proposal from December, 2007. Included in the proposal, sent to City Manager Wally Wysopal, is the line: "We know you want to stay under the radar for now."

But the proposal, from CCG Consulting of Maryland, notes that the city will want to conduct a survey or residents at some point.

That survey was done by CCG in April 2008, and concluded:

• 65 percent of North St. Paul households have some form of high-speed data. This is not the same as the ultra high-speed data that could be delivered with a fiber network. 

• 11 percent still use dial-up for Internet access and 81 percent of those have considered changing to a high-speed connection.
 
• A majority of customers with Internet access said they would consider buying service from the city, indicating that they are not particularly happy with some aspect of the current product. 

• People are more in favor of a public/private partnership than they are with the City offering service alone. 

• Residents seem to like and trust the city more than they like or trust service providers.

• "Overall, one might expect an eventual market penetration of around 70% if you ever got into the business. It looks like penetration rates would be higher for a private partner of the City than for the City directly. Of course, getting a high penetration rate is dependent upon two main factors — offering a price discount from the incumbents and offering great customer service."

Supporters answer questions about the project on this page.

Joe Kimball reports on St. Paul City Hall, Ramsey County politics and other topics. He can be reached at jkimball [at] minnpost [dot] com.