During Thursday night’s Zoom Town Board meeting, Commissioner Amy Patterson announced that contract negotiations with Wide Open Networks have fallen apart.
At the March’s retreat –though business isn’t typically done – business was conducted regarding the Wide Open Networks contract. The board voted 4-1 to accept the contract. Commissioner Marc Hehn voted against it.
At the time, MIS/GIS Director Matt Shuler said though the contract was accepted by the Town Board, the process wasn’t complete.
“The Town Board did approve the Wide Open contract, but now it will be sent back to Wide Open for their approval,” he said. “If Wide Open approves it, then it is a completed deal, but if they have any changes, it will be brought back to the board.”
And that’s what has happened.
“I wanted to update everyone on where we stand with broadband,” said Commissioner Patterson. “We have been in negotiations for two years with Wide Open Networks which was going to provide the network for our high-speed broadband. The latest iteration of them coming back to the town was significantly different from what we have been talking about over the last year or so, so what we decided with Matt and our lawyer in Washington who is very well versed in these things as we will be going in a little different direction.”
Consequently, according to Patterson and staff, the town will not enter into a contract with Wide Open.
“We have let them know that the contract they sent back to us was not acceptable so we have gone in the direction where we are putting together a Request for Proposal (RFP) from other networking folks that can manage our network,” she said.
The relationship with Wide Open Networks was based on a Request for Information (RFI), which had state law stipulations attached – that being that the lease contract between the town and Wide Open could only be for under 10 years.
State law doesn’t allow a contract based on a RIF to even speak of a contract extension. This doesn’t give a company much security to invest a lot of money when it will only be for 10 years, said Patterson.
“It has been an uphill challenge for providers to deal with the 10-year provision,” said Mayor Pat Taylor.
According to Town Manager Josh Ward, unlike RFIs, RFPs aren’t hampered by state law and so can extend to 20-25 years, which means more providers would possibly be interested in being the provider for the town.
Ward said the reason the town initially issued a RFI instead of a RFP was because the town would have more control over prospective bidders.
“It’s possible Wide Open may even be interested with RFP terms,” he said.
MIS/GIS Director, Matt Shuler said Wide Open could not commit to the annual lease payments, which the town needed to subsidize the annual fiber loan payment.
“The extended lease period should be more attractive to interested companies,” he said.
Shuler said he plans to have the RFP verbiage ready to present to the Town Board at its May meeting.
“Once the board votes, if it passes, we will then advertise for RFPs,” he said.
The town has taken out a $4.6 million loan to build the network and it expects the fiber network to be a viable operation for 40 to 50 years. It’s a 15-year loan but it will take 23 years to fully recover the cost of the loan, said Mayor Taylor.
The network operator will eventually own the fiber highway installed by the town as a private business and will manage and operate it.
The money the potential operator pays the town for operating the network and leasing the fiber will go to paying the loan back.
Patterson said she knows of at least two other companies who have expressed an interest in being the town’s network operator.
“What we anticipate doing in the next month or so is to have that RFP out and get proposals back and then make a decision and have them on board about the time when the build-out of our part of the network is done; sometime around mid-summer,” she said.
By Kim Lewicki, Highlands Newspaper