DynamicCity::Case Studies - Cedar Falls, IA

Note: This summary is taken from a larger document authored by Doris J. Kelley, current Business Development Manager for the Telecommunication Division of Black and Veatch and former Telecommunications Coordinator for the Iowa Association of Municipal Utilities. Her landmark study is entitled: A Study of the Economic and Community Benefits of Cedar Falls, Iowa's Municipal Telecommunications Network. Download PDF

”According to city budget officials, beginning in fiscal year 2008, Cedar Falls will have its debt paid off (industrial and technology park infrastructure) and begin reaping a surplus. That could mean an additional $2 million in taxes available to the city that year; plus another $2 million split between the county and schools. The city's share looks to increase after that to $10 million in 2010. Communities across the state (including its next-door neighbor, Waterloo) are trying their hardest to emulate Cedar Falls' success.”

—Doris J. Kelley—

Cedar Falls Utilities, the largest municipally owned four-service utility in Iowa, provides electric, natural gas, water and communications services to a community of over 36,000 people. The citizens of Cedar Falls have been and continue to be the driving force. Because of citizen demand and involvement, what once began as an unreliable water supply from "Big Springs," a small light plant built with discarded bricks and an outdated manufactured gas system, has grown into an organization that is recognized nation-wide in the utility industry for outstanding performance management, some of the most favorable utility rates in the country, and for the way in which its telecommunications project changed the economic opportunities and quality of life for its businesses and residents.

For years, Cedar Falls found itself unsuccessfully competing with its larger next-door neighbor, Waterloo, in attracting business and residents to the community. In 1996, Cedar Falls began construction of a community-owned fiber-optic telecommunications network to reverse those trends.

Before the network became operational, figures for new construction showed a definite advantage for Waterloo. However, once the fiber-optic network began to operate fully, the advantage shifted to Cedar Falls. Not only did new construction in Cedar Falls outpace that of Waterloo, but property values increased while property taxes decreased, and since that time, Cedar Falls has held a substantial advantage over its neighbor. Since 1996, approximately 11 companies have relocated from Waterloo to the Cedar Falls Industrial and Technology Parks including Team Technologies, Principal Financial, The Department of Human Services, Hawkeye Community Business Center and the Waterloo Wood Bearing Co. In the same time frame, Cedar Falls has not lost a business to relocation.

Waterloo's Mayor, John Ruff, commented on the disadvantages to Waterloo:

"Fiber optics is the key to Waterloo’s future growth. . . . I believe it has hurt us economically not to be able to provide fiber optics to businesses locating in our city.”

In 1994, a new horizon was encouraged through visionary thinking. Considerable strategic planning and analysis preceded the decision to design, construct and operate a Broadband Fiber Optic Communications System. The Cedar Falls Board of Trustees spent approximately 24 months studying the technical and financial feasibility of constructing and operating such a network. Finally, on October 24, 1994, the Cedar Falls City Council adopted ordinance No. 2072 forming the country’s second Municipal Communications Utility and transferring authority to the Cedar Falls Utilities Board of Trustees.

Design work on the new system began almost immediately and Cedar Falls Utilities crews constructed the fiber optic backbone system. Administrative staff was recruited for the Communications Utility along with some experienced technical support. The efficiencies of operating a four-service utility were leveraged to keep the additional staff to a minimum.

According to the American Public Power Association, Cedar Falls Utilities (CFU) approached the operation of its broadband communications network with much the same goal as the creation of the electric utility infrastructure: to serve as a model for public power communities across the country interested in becoming the communications utilities of the twenty-first century.

For CFU, their vision to strategically position their community, provide economic benefits, improve their overall quality of life, create community distinctiveness, while enhancing their operations and service competitiveness compelled municipal ownership of a fully interactive communications network.

Cedar Falls' citywide municipal fiber optic network provides high-speed fiber connections via cable modems, Fiber-to-the-Business (FTTB) and T1 through DS3 level services.

Cable television entertainment was among the first of the services made possible. The first customer was connected on February 28, 1996. Today, approximately 7,625 residents have access to cable television services. However, this system was not created to provide cable television services alone. The fiber optic network was equipped to provide a wide-array of communications services.

On January 9, 1997, Cedar Falls Utilities introduced its second communications service – CFU-CyberNet, a virtual 10 MB/s citywide Ethernet network. Today, more than 5,500 Cedar Falls Utilities customers transfer files, log on to other computers connected to the Metro Area Network (MAN) (Telnet); and have shared access to the Internet, including e-mail, news and other Internet services.