Assuming the state issues necessary permits promptly, a high-capacity fiber-optic Internet access line will come to Bainbridge Island as early as next March.

It will bring with it the capacity for enormous increases in data transmission, but also a host of unresolved legal and financial issues. Because of that, the city itself plans to be the guinea pig, connecting its various facilities into a wide-area network.

“There are going to be problems, but we don’t know what they are,” Councilman Norm Wooldridge said. “We will experiment, then bring in businesses along the route, then individual homes.”

A report on the status of broadband improvements on Bainbridge Island came at the Kitsap Regional Economic Development Council’s monthly meeting, held for the first time on Bainbridge Island on Thursday.

The Poulsbo-based Kitsap Public Utility District plans to extend a new fiber-optic “backbone” from the Kitsap Peninsula across the Agate Passage Bridge to Day Road, where it will connect with the Day City Internet company. The line then will wend its way toward downtown, along Madison Avenue and Winslow Way.

The Bainbridge leg won’t come without a price. KPUD has enough money to get as far as Day Road, but from that point on, Bainbridge will bear the cost.

“They will help us by issuing bonds, but to do that, they need customers who will pay off the bonds,” Councilman Bill Knobloch said. “The best customers out there are the city and the school district.”

The cost of extending the line past Day Road, estimated at between $200,000 and $240,000, won’t have to be paid all at once, Knobloch said. Rather, he said the utility district will work out a monthly payment schedule sufficient to retire the bonds.

The failure of KPUD to reach Winslow with current funding was not because of cost overruns, spokesman David Jones said.

“We never had enough money from our bond sale to extend the line into either Port Orchard or Bainbridge Island,” Jones said. “We saved enough on the rest of the system to get as far as Day Road, because labor costs and the cost of the line were low last year, but we didn’t have enough money to do the whole thing.”

The city plans to connect the Hidden Cove maintenance yard, city hall, the police station and other facilities into its network.

While officials haven’t worked out the economics precisely enough to know whether it will save money, one thing that will be saved is time.

“We’re transferring more graphic information-based material, and it can take a long time to transmit on our dial-up lines,” said Randy Witt, city public works director. “The costs in time of sharing information among ourselves gets expensive.”

The city will invite other public entities like the school, park and fire districts to hook on as well.

“We are told that the school district is paying $15,000 per month to rent its (high-capacity) T-1 lines,” Councilwoman Deborah Vann said. “They might pay only $1,500 to $3,000 per month for fiber.”

What is yet undetermined is how to connect the line to individual homes and businesses. As a broadband wholesaler, KPUD is prevented by law from dealing directly with an end-user customer – there must be an intermediate provider, defined as someone who resells more than half of the purchased capacity.

Beyond the question of an intermediate provider, there is the question of cost.

Installation costs run about $20,000 per mile for overhead lines, with additional equipment required at both ends. From the main line to an individual home, costs run about $20 per foot.

Construction of the fiberoptic backbone by the KPUD, a public agency, has been criticized by some private providers.

Qwest representative Stella Ley questioned whether there will be a substantial market for the level of ultra-high capacity that the fiber-optic cable will provide.

“We’re farther ahead than many realize,” she said. “(High speed) DSL service is available on 60 percent of the island, and we’re expanding that service. Bainbridge Island has the highest take rate for DSL in the four-state western region.”

But the fiberoptic line offers access speeds many times faster than that provided with DSL, advocates say.

The government entities looking to make the best use of the KPUD fiber-optic line are breaking new ground, Stern said, but that has its perils.

“We’re the pioneers,” he said, “the folks with arrows in their backsides.”