At a special called meeting Tuesday night, Highlands Town Board began the process of going over three bids submitted by three companies for the completion and operation of its Smart Cities Project (broadband highway).
The town took out a 15-year loan of $4.6 million – a total of $6 million with interest – to build the broadband highway which will enable providers to service any home or business in town.
On Monday Oct. 26, the town received three proposals in response to its Smart Cities Project RFP. All proposals were deemed responsive.
The first round of bids received about two months ago were not accepted because the scenarios were based on profit-sharing with the town, something MIS/GIS Director Matt Shuler said is not allowed by the state.
“The first set of bids couldn’t count as responsive bids because the providers proposed profit sharing – giving the town a percentage of their revenue — and we are not allowed to do that because the town isn’t allowed to sell broadband and if it was profit-sharing, the state would still consider us selling broadband,” he said.
The second set of bids received were from NC Broadband Group, BalsamWest and Hotwire. They differ from each other concerning services to the public, leasing options to the town, whether they are “open” or whether they offer symmetric or asymmetric options.
Only NC Broadband proposed an open network whereas BalsamWest and Hotwire did not.
An Open Network concept is appropriate for both fiber and WiFi access networks, especially where exclusivity cannot be allowed. The shared maintenance costs make it appropriate for rural areas, where traditional Internet service providers (ISP) may be reluctant to provide a service. Open access networks are also viewed as a feasible way of deploying next-generation broadband networks in low population density areas where service providers cannot obtain a sufficient return on investment to cover the high costs.
Ryan Sherby with BalsamWest and Jonathan Bullock said they are single-provider bidders.
“We are a market demand service and we want to offer a long-term sustainable plan for the town that is good for us, and it, too,” Bullock said.
He also said Hotwire offers asymmetric internet connections not symmetric internet connections.
A symmetric internet connection means that the data speed and file transfer rate is the same in both directions. That is, the connection provides the same download and upload speeds, at the same time.
An asymmetric internet connection means that the data speed and file transfer rate on the network is different in each direction curtailed for the user’s needs – something Hotwire proposes.
North Carolina Broadband Group is an affiliate of ITC Holding Company. ITC has been in business for over 120 years and has successfully managed billions of dollars in telecommunications assets including current investments in the telecommunications industry. ITC has long standing relationships with many financial institutions and institutional investors.
It is an “open network” and would offer access to the network to other providers interested in bringing such services to the community.
Balsamwest has the backing of its owners, Eastern Band of the Cherokee Indians and Drake Enterprises.
The initial deployment connected Drake Enterprises, EBCI, 70 rural schools, universities and community colleges through a variety of foundation and public partnerships.
Today Balsamwest has grown beyond serving its owners and the educational institutions of the region and now serves hospitals, regional lending institutions, governments (state, county and local), other competitive local exchange carriers cable TV providers, cellular towers, wireless internet service providers, small businesses and expanded into fiber to home residential customers as of May 2019.
Hotwire has 20 years of experience in the construction and delivery of fiber-based communications services – from the start, they partnered with local communities to bring service to their residents and businesses. Pioneering early public/private partnership for ubiquitous fiber deployment and smart city applications,
Hotwire has successfully worked with a number of cities to deploy fiber-based broadband to residential, government and commercial customers – including the City of Salisbury, NC, City of Plantation, FL and City of Miami Beach, FL.
An abbreviated summary of each proposal presented to the Town Board follows:
North Carolina Broadband Group
- Will begin connecting customers within 90 days of contract adoption;
- Will build remaining 13% Fall 2021;
- Services Internet up to 1Gbps, Plan to have VoIP phone service;
- Will offer Town $3,650,000 over 25 years;
- Will offer an Open Network.
BalsamWest
- Will begin connecting customers in 6 months after contract adoption;
- Good Faith Effort to build out 17%;
- Services: Internet Up to 1 Gbps (residential), Voice, Transport, Data Center Services;
- Will offer Town $5,390,000 over 25 years.
Hotwire
- Will begin connecting customers 3 months after connection of upstream bandwidth;
- Will build underground in 3 years with customer commitment;
- Services Offered: Internet Up to 10 (residential) Gbps, Voice, Television, Home Automation, Home Security;
- Will offer Town $10,200,000 over 25 years.
Commissioner Marc Hehn has been opposed to the broadband highway from the start.
“I don’t think the town should spend money to compete with the companies now available in town,” he said Tuesday night.
But it’s the town’s stance that the existing companies either don’t want to or aren’t capable of supplying the kind of fire power that will propel Highlands’ remote possibilities into the future – which is a major component of its economic plan.
Hehn had several requests prior to any serious contract negotiations taking place – interview each bidder, to have the town’s local, state and federal lawyers in on the interviews, to see the bidders’ financials, to ensure they are properly insured and to enlist the help of an anti-trust lawyer to make sure the town isn’t stepping on local providers’ toes.
He also said he wanted to make sure each bidder was capable of taking on the project.
“We don’t want them to default along the way and leave us hanging,” he said.
All the commissioners agreed to Hehn’s suggestions.
Town Attorney JK Coward said getting other lawyers involved was a good thing “because these will be very involved contracts.”
Commissioner Amy Patterson said to make sure all the bids are apples to apples, she wants the town to ask them all the same questions.
Commissioners envision an hour-long interview with each bidder with all parties present – likely virtual – possibly as early as next week.
Based on the outcome of the interviews and input from various lawyers, the town will then enter into contractual agreements which will likely take some hashing over.
Meanwhile, Mayor Taylor said the town anticipates the physical network being completed by the end of the year. Rainstorms have slowed work down.
“Currently, the contractor is doing the tedious task of fusing the glass fiber together to unify the network,” he said.
He said the contractual agreement for the provider may take about as long to complete.
“Once the contract is signed the company will have to begin staging and setup an office. That process may take as long as three months, so new customers will follow sometime in the first or second quarters of the new year,” he said.
By Kim Lewicki, Highlands Newspaper