— by Margie Doyle —
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].”
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.
Alex, Thank you for your transparent review. The one common concern I have is G.L.’s lack of response to your questions… I’m still waiting for a response to my questions from a “Good Friday” meeting of Eastsound property owners last spring. At that point we were being asked to pay $5,000 and it would be done by 12-31-15. Then we were told if our tenants would commit to $150 connection fee we would not have to pay the 5K…Now $3,000 with no commitment from tenants, with $6k for connections after March 11. All this confusion put forth with the hope that we are not being held “hostage” by Century Link. And the hope that we can use the existing conduit installed during past construction for lighting…By public funds.
I want to support a local solution, but I also believe it will take time to do it with respect to those who need it now and later as a necessary utility. I’m close to drinking the “kool aid” for my building in town but hope that RI Utility becomes more compassionate to the long range goal and less as a quick buck start up.
It takes time to build community respect, but you can loose it overnight.
We at Orcas Online connected to OPALCO Fiber in 2008. The Public Library, the Public School, Windermere Real Estate, and Ray’s Pharmacy all hooked up with fiber at about that same time. Fiber has been available in Eastsound for over 8 years now.
Using our fiber connection, we have been providing internet service, up to 50 Mpbs (depending on the customer’s needs), since we have had this connection.
There is another local alternative to CenturyLink and it’s been available for quite some time.
Hi Alex, why don’t you come into our office and sit down with us. We can go over the details you mention above and more. These are all very complex discussions, that while easy to pick apart and debate on the Internet, require more understanding, background, and technical knowledge of both the technology we’re implementing as well as the physical implementation.
The Rock Island situation is very complex, and for me personally, is my biggest frustration. It makes my job hard because every conversation takes time and care to communicate all that’s going on. Since you are a vocal part of this dialog, I encourage you to come in and let us boot you up on the details.
Also note, for six months now I have been holding open fiber meetings rotating from island to island to answer questions like these. I’ve been running ads in all 3 newspapers every week since last September advertising these meet-ups, and have included a mention of them in the monthly Fiber Update Newsletter that has been going out to over 5,000 people at the first of every month. It’s a great place to ask questions and I encourage everyone to attend at least one to learn more about this massive and important project.
Dan:
Complex as your business may be, I asked two straightforward questions of your boss (repeated in my note above) on Ja. 30 that neither he, nor you, have answered. Once you have, I will consider your invitation.
You are doing the equivalent of trying to understand how fish swim by looking through aquarium glass. You’re not going interpret the experience very well standing outside and that’s what I see you doing online.
Just to clear any obstacles you may have to sitting down face to face, here are your answers:
1) Anyone with an LTE connection has already paid $1,500 for their middle mile fee, so no, they will not be charged another $1,500.
2) Any and all Construction Incentive dollars can be spent at our discretion. These get blended with Middle Mile funds and backbone location to derive a build cost. Distance from the backbone and families in the build plays a big part of the equation because total feet, divided by people sharing it = cost.
So there are your answers. No more excuses now. What’s your move?
I hate to jump into these discussions… I have Orcas Online and am thrilled with their service, with no intention to switch if I don’t have to, so really I have no dog in the fight. But,
Dan, your response is EXACTLY what is wrong with this whole discussion.
At every step, the PR response from both OPALCO and Rock Island has been defensive, dismissive and for lack of a better word, snarky relating to the genuine concerns of the membership that is paying for this entire operation. I agree, your business is complex and I know about zilch about fiber-network infrastructure and even less about the costs related to it, but what I do know is that there are many, very valid concerns about the status of the project, both financial and in terms of schedule. Part of the troubling part of the PR response is that it seems that no one on the corporate side of this understands that it is OUR MONEY that is financing this entire operation. We have a right to be concerned, a right to be critical and a right to ask questions – even if it is in the venue of an on-line forum.
Not all of us can just “drop in” to the office to discuss these things. We have to ask them when the opportunity presents itself.
Only my humble opinion, but OPALCO should be publishing regularly issued (quarterly?) reviews and updates of the exact financial status, with overage and savings tracking and should include Critical Path analysis with documented accounting for schedule changes available to the membership. More information is better, transparency is golden, and from your side of things, I think you would find a whole lot less questions being asked.
I, for one, hope that the OPALCO/Rock Island experiment is abundantly successful. Given what is at stake, it is going to have to be if we intend to keep the lights on.
I spent nine years working at one of the local newspapers before the Internet was commonplace. I miss the 5pm Friday deadline for letters to the editor. The delay gave people a forced break and the PR people of the day had time to carefully consider the wording of their responses. Many times people withdrew or asked to change letters after showing them to their coworkers or friends. A poorly worded response could come across as condescending to all readers and not just the person it was aimed at. I suppose that time has passed.
It’s true, we do get frustrated and I apologies that it comes through from time to time. Part of my frustration is this: you asked “OPALCO should be publishing regularly issued (quarterly?) reviews and updates of the exact financial status…”
We diligently supply this data every month for exactly the reason you mentioned, to provide transparency. We are deeply committed to it in fact, and here are the ways we go about it:
• We provide monthly reports at the OPALCO Board meeting open to the public
• Send monthly Fiber Update Newsletters to 5,000 people
• Host two Open Fiber Meet-ups a month on Orcas, Lopez and SJ in rotation
• Maintain an open door policy anytime from 8am-6pm, Monday through Friday on two islands
You can find the past six months of updates and detailed fanatical analysis here:
January 2016 – starting on page 76
https://www.opalco.com/wp-content/uploads/2016/01/January-2016-Board-Materials.pdf
December 2015 – starting on page 53
https://www.opalco.com/wp-content/uploads/2015/12/December-2015-Board-Materials.pdf
November 2015 – entire document
https://www.opalco.com/wp-content/uploads/2015/12/2016-Budget-Report-Rock-Island-Communications1.pdf
October 2015 – starting on page 44
https://www.opalco.com/wp-content/uploads/2015/12/October-2015-Board-Materials-r1.pdf
September 2015 – starting on page 28
https://www.opalco.com/wp-content/uploads/2015/12/September-2015-Board-Materials1.pdf
August 2015 – starting on page 35
https://www.opalco.com/wp-content/uploads/2015/12/August-2015-Board-Materials.pdf
Fine more and keep updated here:
https://www.opalco.com/resource-library/#rlfboardmeetingsandmaterialsboardmaterials2016february
I hope you can see why it is hard to hear that we are not being transparent. We live here, we have family here, and we care very much about what we’re doing for our community.
“fanatical analysis”? A Freudian slip, perhaps? If so, an amusing one…
Great, lots of revenue detail. How about costs, and budget for costs?
While you are at it a balance sheet for the beginning of the year as well as a current balance sheet would be helpful.
Transparency doesn’t just mean what you want to share. It means all of it, because as Justin Paulson pointed out, you are using OUR MONEY to finance your business.
Can anyone tell me if OPALCO separately accounts for its power and internet enterprises?
Dan,
I thank you for the links. Knowing where to find them is a step in the right direction.
Now, on to Chris’ observation, which is the same that jumped out at me as I read it as well: No Expense Lines?
Again, to proclaim my own ignorance, I know about as much about fiber infrastructure as I do accounting, but I’m pretty sure that transparent accounting should at least show us the bulk expense line. Given that we have a budget v. actual for the income side, that same information should be provided on the expense side.
I understand frustration, I understand being badgered by customers and I understand having convictions about how “right” I am in my efforts. But in the face of challenge, kill em with facts, kill em with information and destroy their doubt with strength of your argument.
This defense just elevated my concern.
Looking forward to the publication of those quarterly income AND expense reports and critical path performance projections as they are rolled out.
Dan,
Mea Culpa-
I read through most of what you posted but didn’t catch this link.
It does indeed show expense lines here:
https://www.opalco.com/wp-content/uploads/2015/12/2016-Budget-Report-Rock-Island-Communications1.pdf
Looking at it now and will happily share it with Chris as well. I think we will both enjoy the read. His suggestion of a balance sheet would be great too!
Peg – Yes, power and Internet expenses are completely separate accounts and enterprises.
Yes, Mea Culpa as well. I recall reading this report when it was released, and was glad to see the extra expenses and level of detail.
Suzanne Olson–Thank you.
In a recent guest ed on OPALCO’s 100% clean energy (comments apparently closed), Theresa Haynie says the electricity is 100% hyrdoelectric – but hydro doesn’t “run” on its own. I have a burning question. How much of that hydro is powered by nuclear reactors? How much was, before the Hanford closure? Since Hanford is leaking into the Columbia river, how much of the waters have been permanently polluted and contain radioactive substances? What other sources power hyrdo, if not nuclear? Please name what sources and percentages of Hydro that they power. Then we can determine if our energy is indeed “100% clean.”
As per “dropping in the office to discuss these things” that are so complex, a better idea would be to have OPALCO explain it to the rate payers in terms we all can understand, and show in a 100% transparent fashion the exact breakdown of the separate broadband and electric infrastructure proposed and being built. If any of the electric grid and fiber cables being built will power both electric and communications, how do you separate out the costs to ensure that electric users alone aren’t paying hidden costs? Show us, don’t tell us.