— by Joe Cohen —
I would like to comment regarding the ongoing ‘debate’ concerning OPALCO and the Rock Island acquisition and broadband initiative.
The question(s) I seek to ask are the following:
1. What was (is) the ‘business case’ for the broadband initiative (and the Rock Island acquisition)?
2. What are the financial and non financial benefits to OPALCO members (over time)?
3. How do we get there?
In August a small group met (informally) with Foster Hildreth and his team to discuss a host of issues – including Broadband. A lot of good questions were asked – and for the most part I was suitably informed by the factual answers provided. A number of interesting ‘suggestions’ were made – including the notion or idea of ‘how’ OPALCO does (and might in the future) assist those members ‘most in need’ as utility costs increase in the years ahead.
But what I finally came to understand were the answers the first two questions above: What is the business case for the broadband initiative? And….. What are the financial and non financial benefits to OPALCO members?
The questions are interrelated as are the answers.
First, we need to acknowledge that a business decision was made by OPALCO (after a drawn out deliberation process) – to move forward with the Broadband initiative. After the fact, there can be open debate on the wisdom of that decision – but a major business decision and commitment was arrived at. And now we are moving forward!
Second, the business ‘case’ for making that decision rests (my interpretation of what I have learned) on three key points – or benefits to OPALCO members:
· The opportunity to have, experience (and enjoy) fast and reliable access – as compared to our present service provider (CenturyTel).
· (Less understood) The opportunity to have that new service (broadband by Rock Island) generate ‘cash flow’ to the parent entity (OPALCO) in significant amounts (over time).
· The cash flow to the parent (OPALCO) may be of a magnitude that will significantly mitigate future utility cost increases for ALL OPALCO members.
A simple example:
If the broadband entity (Rock Island) can reach its initial goal of 3,000 (or more) hookups or paying customers, it is anticipated that it will begin to generate significant cash flow to the parent (OPALCO). Projections provided in the August meeting were about $ 1,000,000 per year. And if the adoption of Rock Island’s service offering is more successful still, the benefits and cash flow to the parent (OPALCO) become ever greater.
And who benefits from that ‘cash flow’ to the parent? We ALL do – everyone of us benefits. And how?
The cost of delivering electricity will continue to increase. If this assumption is ‘true’ – then those costs will be borne by all of us collectively. But if OPALCO’s broadband subsidiary (Rock Island) can contribute positive cash flow to the parent – then the cash so generated reduces the cost delivered to all of us. And equally important is that the new income provides a diversified revenue source for OPALCO (and us as members).
If energy demand is slowing (and it is in our cooperative) and internet demand is increasing exponentially (as it is everywhere), it just makes good sense to have the broadband capacity for our island community – both for accessibility of service and for the revenue it will create going forward.
Question #3: How do we get there?
First, my simple answer is that we (as members of OPALCO) must first ‘see and acknowledge’ the benefits that accrue to ‘us’ (individually and collectively) and then get behind early adoption of the initiative. It is in our collective self-interest to do so! Let’s seek out and find ways to speed up our adoption and create the ‘cash flow to ourselves’ – sooner than later.
Second, let’s acknowledge that there is a lot of ‘talent’ in our community. And with that talent are those willing to help (in a positive way) with creative ideas that may accelerate or advance the successful rollout of broadband. Let’s get those ‘players’ around the discussion table with Gerry Lawlor – and see what ‘good ideas’ percolate. There can only be one Captain of a ship – but the naval phrase ‘all hands on deck’ is appropriate to what we need to make this work. It requires our collective best energies and good thinking.
Third, let’s abort the kind of ‘political’ and/or ‘personal attacks’ that have been made in recent months – there is more than enough of it in the outside world. We can do better – really.
Thank you!
Thanks for contributing this Joe. Your rationale about the possible benefits of broadband and your call for collaboration are spot on.
Thanks, Joe; finally, a voice that’s more interested in speaking from reason than in speaking from a soapbox!
Joe Cohen states that “If the broadband entity can reach its initial goal of 3000 connections …”, it will generate a positive cash flow that can be returned to OPALCO which, evidently is budgeted by the parent Co-Op to “balance its books” in the next few years.
My concern is what happens if Rock Island doesn’t meet its projected goals?
What is Plan B ? We should all be concerned, FIRST, with the financial health of our electric co-op. I am not convinced that OPALCO management can attest to a positive answer that the Co-Op can stand on its own without a significant increase in rates in order to satisfy the primary lending organization, RUS.
Thanks for this thoughtful article, Joe.
I appreciate the courage and foresight of the OPALCO leadership for undertaking this transformational project, one whose benefits we are just beginning to understand, appreciate, and build upon. In ten years (less?), broadband internet will be as essential to our lives as electricity. Rock Island: Keep growing your network, keep those photons flowing dudes. Islanders are applauding.
s
Thank you Joe for your thoughtful words. I am, as Foster is, always willing and looking for individuals in the community who wish to engage with us in achieving and help this massive undertaking be successful. Every neighborhood that’s has moved forward towards wide scale delivery (from as small as 10 folks to over 100 homeowners) as done so because of leadership and dedication by individuals in each neighborhood.
The key point to be successful is there is nothing cookie cutter about this effort, every neighborhood, every street and every home requires a bespoke solution/cost. Solutions and costs are driven by the individual homeowner as much as the collective. Discussing and educating on the variables and iterations requires a lot of effort and this is way we seek FGO’s (Fiber Group Organizers in our parlance) in every part of this county.
Contrary to other comments etc we are meeting our goals for deploying fiber for the year. We stated late last year that 400 new fiber connections in 2015 was our goal and we have delivered 275 thus far and are confident we will see the balance delivered by year end. The LTE portion of the network is behind but a decision was made very early on to change course with the equipment/vendor, our Radio Frequency design combined with longer regulatory approval times. This is now moving into the delivery phase and we have started deploying fixed wireless customers on Buck Mountain, west of Terrill beach road, Cape SJ etc. The main goal with the Fixed wireless to to ensure we use this capability to deliver service to those whose average fiber costs are too high as it is a finite resource unlike the fiber.
I look forward to sitting down with you soon to discuss the Eastsound core as we have had good traction with property/business owners who wish to share in the cost of deployment.
I have some questions regarding the broadband project, since my understanding is that when we visited this several years ago, a majority of people said no to the proposed plan and paying for it. How was it decided to purchase RockIsland given lack of public support for going forward with broadband?
What about those who will never be able to afford this broadband? Should we be paying for it ? Will we be reimbursed for all that we have (unwillingly) been forced to put into the project, when all this supposed revenue is returned to OPALCO by RockIsland’s projected profits?
What is the plan to help low income people pay for the fixed facility rate projectons of $79 per month by 2020? Speaking for myself, the extra $18 a month now puts it out of the ballpark for me already.
Seems to me this could be much simpler and fairer: Those who want broadband, pay for it. By that, I mean pay for all the costs directly and indirectly that we are being charged for it – the $3 a month charges, and the hidden costs of laying a huge grid of 12 fiber-optic cables. Let us just pay our portion of the new submarine cable. Those who don’t want OPALCO’s broadband, or who will never hope to afford it – don’t pay.
I agree one hundred percent with Sadie on Broadband. It is quite similar to what is going on in our country! Those who have little in material wealth are forced to live by the rules of this Oligarchy!!! FORCING everyone to pay for those who Can afford Broadband is Pure Arrogance on the part of the Board and its’ supporters in this endeavor!
Spirit Eagle
Hi Sadie, Theresa Haynie here for OPALCO. Let me address three important points in your message.
If you use a computer at the library, you are using the OPALCO fiber backbone. Built out and paid for by OPALCO members for modern communications between offices, to collect billing information, and for many years providing Internet backhaul for our libraries, San Juan County, and other local institutions. The benefits of our 15-year old fiber backbone accrue to all Co-op members, island businesses and residents working to build a sustainable community.
The minimal $3 on your OPALCO bill covers the loan expense representing the Co-op investment in our sustainable community. That’s a short term payment for a long-term benefit for all islanders. Costs for extending fiber-based broadband to someone’s home or business are paid for by that member. In time, Rock Island Communications profits come to OPALCO as a revenue source.
OPALCO convened an inter-island Needs Assessment group to learn how best to help low-income members. The OPALCO Board is working to address how to support those most in need. Take a look at the materials from the October Board meeting (www.opalco.com/find-documents). A sustainable community isn’t just for the wealthy, and it’s the Co-op way to help our most vulnerable residents.
Finally, throughout my adult, home-owning life, I’ve paid property taxes to fund schools even though I don’t have children. Those taxes pay for lunches I don’t eat, playgrounds I don’t use, sports I don’t play. And for teachers and their retirement packages. Those taxes I pay gladly, because I believe in developing an educated, sustainable community.
OPALCO has a 75-plus year track record of working as a cooperative to improve the quality of life for us all, and fiber-based, broadband Internet is another key thread in the fabric.
The Orcas Library and Orcas Public School are currently NOT using OPALCO fiber for their internet connection. They are part of the K20 network which has decided to switch from using OPALCO fiber and contract these links out to Startouch via microwave connections to Mt Constitution.
Well Leif when you guys all jump ship over to OPALCO/Rock Island for broadband just remember those of us stuck with an even worse CenturyLink because the number of customers they will have left won’t matter to them. Why will I be stuck with CenturyLink? Because I’m one of those working poor who has been renting my currant residence since 2004 which consists of a double wide trailer. The owner has no reason to pay for the middle mile and last mile up to the house and if they did I’m sure that cost would transfer to me by way of rent increase I couldn’t afford anyway. When and if they build on their property would be when they would have the fiber installed. So I will continue to pay for something I will never have access to unless I move into one of those extremely available, in abundance, affordable housing rentals I see all the time, HAHAHA.
Let’s keep moving into the future – fiber optics, faster and more efficient internet, services that are subsidized for those in need and Centurylink a choice rather than a monopoly.
There are neighborhood satellite cooperatives (which is brilliant), but for those of us that aren’t as organized, don’t we need to set our support on services for the greater population – San Juan County as a whole?
Change is sometimes an unwelcome entity. It does, however, bring with it creative problem solvers and unexpected benefits. My impulse is to stay open. After 34 years, I know OI and the other islands are going to remain all-people-supportive and sustaining communities!