The city is taking the next steps in developing a fibre optic network to provide ultra-high-speed internet service to businesses in the downtown, Carter Light Industrial Area and future airport logistics park.
The city hired consultants Stantec to provide a preliminary business case for building and operating a $3-5 million fibre optic network.
Stantec engineer Enzo D'Agostini said, based on conservative estimates, such a network could take 22 or more years to turn a profit for the city.
"We're looking at an access cost of $500 a month," D'Agostini said. "That's a price point where a lot of small businesses are going to have a hard time justifying the step up."
Fibre optic networks use glass fibre cables to transmit data using light waves. Fibre optic networks typically can transmit 10 to 40 gigabytes of information per second -equivalent to 70 to 280 minutes of high-definition video per second, or 400 to 1,600 times faster than the fastest home internet services.
The most successful model used in other communities is the city would build the network and charge for access to it, he said. Businesses and existing Internet providers would pay for access to use the network.
"You should offer dark fibre, not managed services to compete with Telus or Shaw," he told council last week. "You're not the only city that's considering this. There is a lot of them that have done this, and a lot of them that have failed. The common factor with all the municipalities that have failed is they tried to take on the Shaws and Teluses."
Because of the high expense of building fibre optic networks, the public sector has taken the lead in developing the infrastructure in cities including Kamloops and Kelowna.
Including the future airport logistics park as the third phase of the expansion adds a lot of expensive construction without a known market, he said.
"Phase three drags the whole thing down, to a large degree," D'Agostini said. "You're building a lot of kilometres and have very few customers."
The total proposed network would include 70 km of fibre optic cable - including the 16 km of fibre optic cable already installed to support the city, hospital and university.
City council approved city staff to prepare an estimate of what it would cost to do a detailed business case.
"If we're going to move ahead, we need to move ahead quickly," Coun. Garth Frizzell said.
Mayor Dan Rogers said "sharper information" is needed before the city can decide whether pursing the fibre optic network is worth considering.
However, not all members were convinced the network was worth investing further in something with such a long payback.
"My concern is purely from a business perspective," Coun. Shari Green said. "I'm quite reluctant to put more work into it, if doesn't look more rosy than this."
