POWELL - Two years after making a $125,000 payment to the Utah-based U.S. MetroNets consulting firm, Powell has received full funding from private investors for a citywide fiber optic telecommunications network.

"The money is in the bank, so it's real," City Administrator Zane Logan said of the $6.5 million deal that will bring fiber optic service over a city-owned network to more than 95 percent of the town's homes and businesses.

Construction of the network is expected to start in about 60 days and will take up to six months. If schedules hold, Powell residents could be surfing the Internet at lightning speed by Christmas, he said.

"Getting funding is a big hurdle, but not the only hurdle," Logan said of the deal, which saw several delays in securing financing and faced opposition from telecom giants Qwest and Bresnan Communications.

"Now, I hope that the community and businesses and public entities like the schools and the college will support it. We have the opportunity to do things most communities can't think about," he said.

Logan said the city's up-front payment to U.S. MetroNets of $125,000 has been refunded as part of the deal. Mayor Scott Mangold said the City Council is considering reinvesting the funds into the network, but no final decision has been made.

The deal is one of the first in the country to fund a municipally owned fiber optic network without a guarantee of public funds.

City Council members last year approved a "contingent obligation" that could allow the city to make quarterly payments of up to $131,000 for 20 years to lease the network from Global Leveraged Capital Management, the New York-based lender that funded the project.

But network backers have said that such funding by the city would be an option, not a requirement, and is a decision that won't be made until 2014 at the soonest.

Agreeing to such a lease would be optional and would happen only if the system could not be refinanced by private investors. A lease would be pursued only if it made financial sense for Powell taxpayers, Logan said.

Mangold said there were times over the past two years when he wasn't sure all parties would ever agree to the deal that was finally approved and funded Wednesday.

"But in the long run, it's certainly going to put Powell on the map," he said.

"It's going to give us an advantage over other communities, and is going to be one of the next things for municipalities around the state and elsewhere to consider - a telecommunications department within the city," Mangold said.

But cities that have built municipally owned networks have typically found it tough to compete with the private sector, said Shawn Beqaj, a Bresnan spokesman.

"From a service perspective, we're going to continue to be a very strong competitor" in Powell, he said, adding that Bresnan is "proud of our track record of investing upwards of $100 million in Wyoming."

Beqaj said customers buy services, not bandwidth, and that other than a fiber-to-the-home connection, Powell's network would offer nothing that Bresnan can't match.

He cautioned that Powell is a "robustly competitive" telecom services market, and said that a new network protocol due to launch next year would make Bresnan download speeds comparable to fiber optic connections.

Beqaj questioned whether cities should be players in the telecom business.

"The municipality holds all the cards, and is not only our competitor, but also our regulator. That breeds some concern from our industry," he said.

Following Powell's early efforts to get private funding for the city-owned network, Qwest and Bresnan Communications successfully supported new state legislation that has made it more difficult for other cities to pursue such projects.

Mangold said the city has sought to work with existing providers, but that large companies are focused on delivering fiber-to-the-home in major metropolitan markets, not small towns in rural areas.

"It was 10 years ago when people at Qwest said they would be bringing us a fiber-to-the-home system," he said.

"I found a letter from 1997 saying, 'It's coming soon.' Obviously, 'soon' for us is different for them," Mangold said.

"We have an obligation to our shareholders, employees and customers to build a strong business case to support our investments, and we take a disciplined approach, focusing technology deployment where demand is greatest, where it's technically feasible and where the concentration of potential customers served can support the investment," said Qwest spokeswoman Johnna Hoff.

Hoff said Qwest has invested significantly in providing telecom services in Powell, and that "we do not think it's appropriate for city government to compete with private companies that offer similar services."

U.S. MetroNets will help manage construction and operations of the network.

TCTWest, a Basin telecommunications firm, will provide exclusive service for six years, after which the network will be open to other providers. After 20 years, investors will be repaid and the city will own the network.

TCTWest has said customers will be able to purchase phone, TV and Internet services all over a single fiber connection starting at around $85 per month.