Sherwood, Oregon Ferments ‘Future-Proof’ Fiber To Preserve and Expand Municipal Network

Sherwood Broadband sign on side of street

In the City of Sherwood, a mostly residential bedroom community 16 miles south of Portland, officials have been quietly cultivating a digital vineyard across Oregon’s “Gateway to Wine Country.”

As part of its on-going work to build out a citywide fiber network, Sherwood Broadband recently secured a $9 million grant from the Oregon Broadband Office Broadband Deployment Program (BDP) to continue expanding Sherwood’s municipally-owned network into neighboring rural communities just outside city limits.

The grant award is part of $132 million in federal Rescue Plan funds the state is doling out to an array of community-owned broadband initiatives for 16 projects across 17 counties.

Award winners include Beacon Broadband, a subsidiary of the Coos-Curry Electric Cooperative ($19.4 million); Jefferson County ($19.2 million); Douglas Fast Net, a wholly-owned subsidiary of the Douglas Electric Cooperative ($8.5 million); the Idaho-based member-owned cooperative Farmers Mutual Telephone Company, which offers broadband service in Malheur County, OR ($18.9 million); and a handful of independent providers like Blue Mountain Networks ($6.5 million) and Ziply Fiber ($10.2 million), recently acquired by Bell Canada.

Image
Sherwood Broadband vehicles in a lot next to spools of fiber

“High-speed, reliable Internet is a modern essential,” Oregon Gov. Tina Kotek said in a prepared statement when the grants were announced. “Our broadband infrastructure is the lifeblood of Oregon businesses and communities, and these grants will help ensure that we’re not leaving communities behind.”

With a total BDP budget of $156.7 million, the Oregon Broadband Office received 62 grant applications requesting approximately $445 million for projects across the state, prompting Nick Batz, Director of the Oregon Broadband Office, to note:

“This oversubscription shows the demand to bring reliable broadband to all Oregonians. Our goal is within reach between the Broadband Deployment Program and our upcoming Broadband Equity, Access, and Deployment (BEAD) program” for which Oregon is poised to receive an additional $689 million in federal funds, courtesy of the 2021 infrastructure law.  

Built For The Community, By The Community

Meanwhile, Sherwood’s longtime IT and Broadband Director Brad Crawford tells ILSR the $9 million grant the city received will help pay for a deployment project to connect “a rural pocket” of 688 unserved addresses spread across three counties (Clackamas, Washington, and Yamill).

The grant requires a $2 million match from the city, which Crawford said will be paid for with in-kind construction labor thanks to the 17-member staff employed by the city’s broadband utility.

“We have both inside and outside-plant on staff. That includes 11 on the outside plant, two install technicians and an outside plant engineer,” he said.

Image
Sherwood Broadband dump truck

The city’s network currently passes about 3,000 households and businesses in a city where the population has doubled over the last decade to nearly 20,000 residents, Crawford said.

He estimated there to be about 7,000 single-family households and businesses in Sherwood (which also includes approximately 8,000 multi-dwelling units).

“We’re about 40 percent done (and) have about three and half years left” before construction is complete and the network passes every address in Sherwood, he said, adding that the city is “thinking about” applying for forthcoming BEAD funds to connect neighboring school districts.

Slow But Steady Progress

The seed of Sherwood Broadband was first planted in 2003 when the city’s urban renewal agency invested $300,000 to run a “single thread line” of fiber to a data center in Portland, Oregon about 20 miles up I-5 to support an institutional network (I-net) connecting city-owned facilities.

Image
A cement path leads through a grassy area to fenced in playground with lights surrounding a court

“We used that to kickstart Sherwood Broadband,” Crawford recalled.

In addition to building a backbone for the city’s I-net, the network also began to serve a small number of business clients.

“It was sometime around 2007/2008, we started getting calls and connecting larger enterprise customers. But for the first 15 years or so we really only sold business services to larger entities. And for the first six years, we really didn’t do any marketing,” he said.

It wasn’t until 2018 that city leaders decided to launch a pilot project for residential service.

“We had a handful of neighborhoods with conduit, so we lit up 10 neighborhoods,” Crawford said.

Image
Aerial view of Sherwood, Oregon street running through a community amid rolling hills with fall foilage

Because “the city council liked it (the pilot project) and wanted to do the whole town,” in 2021, following the pandemic lockdowns which underscored the need for universal broadband access, city councilors voted to issue $20 million in revenue bonds to fund the construction of a city-wide fiber network.

“We had hoped to be done by now,” Crawford acknowledged. But, what extended the timeline was the fact that the city “wanted to do the construction ourselves. We had to train our own staff and then when we went into full build-out (mode) we had to bring on additional staff.”

“It slowed things down a bit because we didn’t have the scale a private contractor does,” he recounted, adding that Sherwood Broadband was set up to operate as a city enterprise fund. “We are structured like a water department where the revenues stay within the fund.”

Facing Down Early Challenges

Hiring and training the staff, Crawford said, was one the biggest challenges along the way.

“It’s all underground construction. And it takes time to get everyone up to speed. But, our crews work really well now,” he said.

Still, Crawford added, “funding is always the hard thing” – though in Sherwood’s case it was made a bit easier because “definitely before we started building we (the city) were not in debt … and we have a Mayor (Tim Rosener) who is a big broadband advocate.”

Because of the careful, steady progress the city has made – coupled with a rising demand for fiber connectivity – “we’ve been able to build our fund balance up. We’ve paid all our debt back. We have been able to provide services and the potential to use excess funds for community improvements.”

The Long Game

So far, Sherwood Broadband has risen to face the internal challenges every ISP must contend with: financing network construction, as well as training and retaining a capable workforce.

The external challenge, however, is having to effectively compete against two other providers in town: the regional cable monopoly (Comcast) and an acquisition-hungry Ziply Fiber who recently merged with Bell Canada.

Without divulging Sherwood Broadband’s exact take-rate (a number many small providers hold close to the vest in a cut-throat world where the big providers are known to temporarily offer below-market subscription prices in an attempt to hold onto their near-monopoly share of the market), Crawford said in the neighborhoods where Sherwood Broadband offers service (nearly half the city), “we are becoming the predominant provider.”

Image
Sherwood Broadband utility truck with worker climbing utility pole in background

Undoubtedly, the attractive service tiers and prices – offering the gold-standard in Internet access technology – has been a major driver of demand.

The city’s fiber service offers a symmetrical 100 megabits per second (Mbps) connection for just $30/month – a price point city leaders settled on so that low-income residents could get free Internet service if they were enrolled in the now expired federal Affordable Connectivity Program (ACP).

Beyond that, Sherwood Broadband also offers a symmetrical 250 Mbps connection for $40/month; it’s most popular symmetrical gig speed tier for $60/month; and it’s second most popular offering: symmetrical 2.5 Gig speed service for $80/month.

“Our prices have been the same since we started,” Crawford said. “We are striking a chord with people. Our Google reviews are mostly five stars. The interest in the neighborhoods we serve indicates we are doing something good. Yes, it’s expensive to build and it takes time. But, local accountability keeps us to a higher standard.”

But what really distinguishes Sherwood Broadband, Crawford added, is the different approach and incentives that municipal networks embody in comparison to corporate providers.

Whereas corporate ISPs can come and go – get acquired, raise prices, and primarily serve distant shareholders – all without any local input or oversight, Crawford articulated the Sherwood Broadband view:

“We are playing the long game. The city will be here for 100 years and we will be here for 100 years. So this will be an asset to the community for multiple years.”

Inline images courtesy of Sherwood Broadband