Oregon broadband expansion faces more hurdles

Oregon is facing more hurdles in its broadband expansion. Clackamas County, won a $7.8 million grant for its broadband expansion project designed to bring anchor institutions in the area online. However, because due to franchise fees, one of the larger city centers in the area may not be included in the network.

Clackamas County has been in negotiations with Oregon City for months over the franchise fees to run broadband through the city. Cities collect franchise fees from utilities wishing to use the cities right of way infrastructure. After the last round of negotiations ended without a deal, county officials threatened to bypass Oregon City completely, leaving its anchor institutions without high-speed access.

According to county officials, the fee is too high to run fiber through the city. City officials argue that if they suspend the franchise fee for this project they’ll face calls to do the same for any other project in the future.

According to a piece in The Oregonian, the city offered to discount the fee 50% bringing the overall bill down to just over $100,000. But that still represents a sizable bill for the county which is already investing over $3 million of its own funds in the project in addition to federal grant awards. The county also argues that the project is meant to be profit-neutral and paying franchise fees provides a profit back to the city.

Oregon’s broadband expansion hasn’t been easy. As CivSource reported earlier this year, the city of Portland recently overhauled its own expansion project after realizing they lacked the capital to complete a more ambitious version agreed to in 2007. The city has been mired in disputes over both the old and new plans and still hasn’t moved the ball forward very far on how to bring down cost and improve access for Portland residents.

According to the terms of broadband funding, Cities and states that have won federal grant money for broadband have to use most of their funds by 2013 or risk losing unspent money.