The new year is likely to bring a City Hall decision that will impact Lawrence Internet service for years to come.

There is disagreement on whether the impact will be good or bad.

City commissioners are being asked to make a decision on a technical question commonly referred to as “common carriage” or “open access” of future fiber optic networks. Common carriage would allow for multiple Internet service providers to operate on a single network of fiber optic cables rather than each company burying its own set of cables.

The idea, its chief proponent says, is that start-up costs for new Internet service providers would be dramatically reduced, and consequently there would be a large increase in the number of providers and a decline in the price of service.

That all sounds good, but it may not be the way it would work in reality, said City Hall staff members who are struggling to make a recommendation on how the city should move forward.

“The question on common carriage is whether it creates more of an incentive for a new provider to come in and build out a neighborhood with (broadband) services, or whether it creates more of an impediment for companies to do that,” Diane Stoddard, an assistant city manager who has been studying the issue, said at a recent meeting. “I don’t know the answer to that.”

Montgomery’s proposal

A big part of the question in Lawrence is whether City Hall mandates common carriage in the future or simply allows it as an option. Joshua Montgomery, an owner of Lawrence-based Wicked Broadband and the chief proponent of common carriage, is asking commissioners to mandate it in certain scenarios.

Under his proposal, common carriage would be mandated when a company connects its network to any part of the miles of fiber optic cables owned by the city. Internet service companies have been interested in leasing unused portions of the city’s existing fiber optic network because it saves time and money on burying new cable.

But as part of that lease arrangement, Montgomery is suggesting that such providers would be required to make all of their networks in the city common carriage, meaning they would be mandated to allow other companies to use their networks to sell broadband services. The owner of the network would be paid a per-house/business wholesale fee that would be set by the city. Montgomery is suggesting $25 per house/business per month, with the fee automatically adjusting based on the consumer price index.

“It will create a true, open, competitive marketplace and will lower prices and improve service,” said Montgomery, whose business provides Internet services to Greek houses, apartments, nonprofits and some households.

Montgomery said three local companies — DoctorDave computer repair, BestMacs, and Action Technology Group — that have signed letters of intent to begin offering Internet services if city commissioners agree to provide Montgomery’s Wicked Broadband a $300,000 loan guarantee to build a pilot project that would bring gigabit Internet service to about 300 addresses downtown.

But another start-up company that also hopes to bring the super-fast gigabit Internet service to Lawrence says it will drop its Lawrence plans if the city moves forward with Montgomery’s proposal. Baldwin City-based RG Fiber objects to the idea of the city providing a loan guarantee to a potential competitor, but also objects to the city mandating a common carriage network.

RG Fiber opposes the plan

Mike Bosch, co-founder of RG Fiber, said he hasn’t seen where the idea has worked, and is not looking to add extra complications to his company’s start-up efforts.

Montgomery counters that open access networks are popular overseas, and points to two small communities — Cortez, Colo., and Ammon, Idaho — that have had success with such networks.

But research on those two cities shows their networks are significantly different than what is proposed for Lawrence. In those communities, the city governments own the fiber optic networks and sell wholesale service to retail providers. Neither city directly sells retail service to homes or businesses.

Under Montgomery’s proposal, Wicked Broadband would be both a wholesaler of service and a retailer of service. That would place some Internet service providers in the awkward position of buying its wholesale service from a retail competitor.

It also makes it likely that the city would be called to serve as the role of regulator of broadband service in the community, Bosch said.

“I see more headaches and issues with this type of system, and I see the city of Lawrence would have to become a regulator of broadband service,” Bosch said at a recent meeting. “For the city to get to a place to regulate a network, you are going to have to learn a lot more.”

The city’s two dominant providers of Internet service — WOW and AT&T — both have expressed multiple concerns with Montgomery’s proposal.

Montgomery said he does think the system would be cleaner if the city owned the actual fiber optic networks and served as the wholesaler of service. But thus far, city officials have not expressed an interest in that sort of system.

City’s role

Montgomery said he thinks the city’s regulatory function would be manageable. He said contracts could be written in a way that disputes between retailers and wholesalers could be settled in court rather than before the City Commission.

City Manager David Corliss cautioned that may not be the way such disputes play out in reality.

“Lawsuits can take a long time and be expensive,” Corliss said. “It seems just as likely that the aggrieved vendor is going to come before the city and ask for some relief.”

City commissioners have asked staff members to do more research on the idea of open access networks. The issue of how much of a regulator the city would have to become is likely going to be a key issue, one commissioner said.

“I think it would be a negative thing if we had to become a regulator,” Commissioner Terry Riordan said. “I would like to have certain standards that they follow, and then have an easy way to check if they are following through.”

Commissioners have said they hope to make a decision on the issue in mid-January. In the meantime, both Wicked and RG Fiber have their Lawrence plans on hold.

Wicked, which previously operated in the city as Lawrence Freenet, has had a request before the city for about 18 months that would create a gigabit pilot project in downtown Lawrence. RG Fiber is a start-up company that has targeted Baldwin City as the spot to build its first network. It also will be offering gigabit service.

Bosch said he plans to start hooking up customers in Baldwin City, including a partnership with Baker University, in the first quarter of 2015. His current plans call for a key piece of fiber to run through Lawrence on its way to Baldwin City, and he has proposed hooking up customers in parts of Lawrence as part of his Baldwin City project.

Bosch said he also has been exploring alternative routes that would bypass Lawrence and bring fiber into Baldwin City from a different direction. He said he won’t let any delays in Lawrence slow down the Baldwin City project, which is set to offer not only Internet but also cable and phone service to Baldwin City businesses and residents.