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Broadband clears yet another hurdle

Paul Raymore

The final regulatory hurdle facing the Truckee Donner Public Utility District’s broadband project was dismantled last week, a move that should allow the project to go forward barring legal challenges.In light of last Thursday’s decision by the Nevada County Local Agency Formation Commission (LAFCo), the district’s board of directors voted on Monday to move forward with financing the fiber optic network that has been tied up in appeals for the past two months.LAFCo commissioners first gave the district the authority to pursue its broadband initiative in 2001 under the condition that certain provisions be met. On Aug. 11 of this year, the commission certified that the district’s broadband plan met all of the conditions required by LAFCo. However, Cebridge Connections challenged LAFCo’s approval, and the commissioners sent the matter back to the LAFCo telecommunications subcommittee for further review.At last Thursday’s LAFCo meeting, the telecommunications subcommittee laid out its recommendations to the full slate of LAFCo commissioners, essentially rejecting many of the arguments put forth by Cebridge. But the subcommittee also recommended that a number of changes be made to the district’s broadband business plan, including the tax-exempt status of the district’s financing and the possibility of cross subsidization of the broadband business unit by the district’s water and electric rate payers.PUD moves forward quicklyWith the final go-ahead from LAFCo, the district’s board members voted on Monday to approve a resolution to move forward with the broadband project. In a four-to-one vote, with Director Pat Sutton continuing her opposition for all things broadband related, the board ratified previous broadband actions and authorized the sale of $24 million worth of Certificates of Participation. COPs are the equivalent of bonds sold to private investors to finance the construction of the fiber optic network.”I’m pleased now that the board … has decided to move forward with the financing and putting the last pieces in place,” said Jim Maass, president of the district’s board of directors. “I’m really looking forward to seeing broadband come to this community, providing cable television service, high-speed Internet and all the other amenities that broadband can bring.”Due to state law, the district must now wait 60 days before the COPs can be signed and the construction and equipment purchase contracts can proceed.Legal challenge expectedRepresentatives from Cebridge Connections said that they would continue to contest the district’s broadband plan and will ask for a validation hearing on LAFCo’s approval in the California Superior Court in Nevada City.Pete Abel, vice president of community relations for Cebridge, said, “the dialogue with the Nevada County LAFCo was a healthy and constructive process, and we were pleased that they were able to address at least some of the issues we raised…”Despite what Abel called “constructive dialogue,” he said the company remains concerned that elements of the district’s plan, “may be illegal and may still lead to an increase in the price we all pay for electricity. For those reasons we are asking a state court to review this matter.”Specifically Abel cited concerns about the viability of the district’s business plan given the competitive nature of the telecommunications market in Truckee, the legality of a public agency competing with private companies already established in the market and the possibility of subsidies flowing from the district’s water and electric customers to the new broadband utility.Cebridge’s decision to pursue legal action surprised no one at the Truckee Donner Public Utility District.”I would not be surprised if Cebridge files a lawsuit to prevent us from proceeding,” Maass said at Monday’s board meeting. “And I believe the Truckee community should stand up and take notice, once that lawsuit is filed, if Cebridge is really interested in the Truckee community or are they interested in their own bottom line.”Maass said the district’s electricity and water departments are protected, “in the unlikely event of the broadband business unit not succeeding.”


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