Guest Opinion: Understanding OPALCO’s Broadband Initiative

— 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!