Make OPALCO Power Affordable Again.

Rock Island Pitches Fiber Optics to Eastsound Business Core

By Margie Doyle

February 16, 2016

Dan Burke, Rock Island Communication’s Vice President of Sales and Marketing, announced to Eastsound Property owners a plan earlier this month, “to bring fiber optic Internet to downtown Eastsound…to get better connectivity to your buildings and to your tenants.”

 

In the email announcement, Burke wrote that the plan focuses only on downtown Eastsound, and lists 121 properties. “The cost savings, planning and build synergies are all dependent on working with this specific group.”

 

The plan “takes the place as the only go-forward plan,” following the “evolution of previous discussions,” Burke writes. “A one-time payment [of $3,000] will cover the cost of bringing this utility into and through town, and up to your building, where [Rock Island] will demark and terminate your service. This means we will make our way through asphalt, concrete, conduit, flowerbeds and other landscaping to your location with no additional cost­ (within reason).

 

“Once this project is complete, you will have a live fiber connected to your structure that can be accessed to give you fiber service.”

 

The $3,000 price tag doesn’t include active service, but rather “the ability to get connected. As part of the sign-up process, a “build questionnaire” will be sent to those who sign up. “Internal design, build and activation have additional costs, and we will walk you through them as we progress,” Burke writes. The flat rate-per-parcel cost includes a “Construction Incentive credit.”

 

Upon contacting over a dozen Eastsound business properties, most property owners
reported mixed feelings about the Rock Island business core plan. Their comments ranged from:

 

  • Support for the buildout expansion, but concern about the costs to individual property owners;

  • Disappointment with the timing and the quick time frame for commitment;

  • Reliance on tenant business owners willingness to take on their percentage of $3,000 property access cost;

  • Interest in the proposal, and plans to see how it will work for their property and their tenants;

  • Dismay that there wasn’t a discussion through the Chamber of Commerce or other convening group;

  • Concerns about the “trickling down” of costs to tenants;

  • Questions about the flat rate vs. economies of scale; and about the incentive to sign on.

 

One longtime property owner said, “The manner in which this was presented makes clear to me that Rock Island is operating in a less-transparent way than OPALCO; and more as a full, for-profit business.”

 

The deadline to sign up to participate in the Eastsound Business Core process is March 11 by which time interested parties will have submitted payment and others will officially decline to participate. Burke says, “We will also need easements to be signed and notarized by all property owners, so start to think about who is on your title, and how we can reach them for notarization (we will work with each of you on this detail, so stand by for more on easements). We cannot make progress beyond this phase until we receive both payment and signed easements from all interested.”

 

Then scheduling, including a start date, will be announced.

 

Burke gives an important caveat to the plan: “We are still waiting on a signed agreement with the county to take over some existing conduit designed for use as part of this build. We have all agreed to the terms of this plan; we just need to execute the deal officially and we will work with Rick Hughes to make sure that happens in a timely manor [sic].”

 

 

A comment from Alex MacLeod

 

 

Thanks for this report, Margie. Rock Island Communications not only is operating in this situation as a high-pressure, for-profit company, but is not following its OPALCO Board-approved business plan in its pricing of broadband connectivity.

 

Its business plan, used in prior situations (such as homeowner associations) has been to figure out the cost of what it calls the “middle mile,” a cost to be shared equally by the participants, and then waiting for a majority of each association to sign on. The “middle-mile” cost is then divided by the number of participants. Each then can apply Rock Island’s $1,500 “construction incentive” to that cost or to the cost of bringing the service the “last mile” to the residence.

 

In this case, Rock Island has set a flat per-property fee of $3,000, which, because it includes the $1,500 incentive, is actually $4,500 per property. Take it or leave it by March 11. If you don’t take it, the charge will arbitrarily rise to $6,000 if you want to connect in the future.

 

Where any of these numbers come from (other than the $1,500 “construction incentive”) is a mystery to the property owners and the rest of us.

 

Rock Island has cut similar corners on Phase 2 of the Cape San Juan/Cattle Pass project on San Juan Island. It has had so much trouble getting its LTE wireless operation there to work that it has offered people who switch to broadband an additional $1,000 subsidy on top of the $1,500 “construction incentive” to make the switch.

 

It is worth remembering that all of this money Rock Island is playing with is being provided by OPALCO members through our electric rates. How it plays with it ought to be a concern to the OPALCO Board and OPALCO management, though there is little evidence that it is.

 

I asked Gerry Lawlor, head of Rock Island, on Jan. 30 to answer these two questions about the San Juan Island project:

 

1. Do the families who switch from LTE to broadband have to pay the $1,500 “middle mile” fee?

2. What is the source of funds for the $1,000 subsidy for their connection from the road to the home? I can’t find authorization for that benefit anywhere in the Rock Island/OPALCO documentation.

 

I have gotten no response.

 

The OPALCO Board meets this Friday. It might be a good time for the Eastbound property owners, as well as those on San Juan, not to mention those who already have paid for broadband based on costs and incentives not now being followed, to get some answers.

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