Broadband plan broadsided by Cebridge appeal
The Truckee Donner Public Utility District’s attempts to build its proposed fiber-to-the-user broadband network has run into another delay.The latest snag is due to an appeal by Cebridge Connections of the Nevada County Local Agency Formation Commission’s (LAFCo) final certification to provide broadband services. Cebridge Connections, which plans on offering similar service after it acquired local cable television and Internet provider USA Media, asked that LAFCo reconsider the district’s broadband business plan and whether it complies with state law.LAFCo commissioners had given the district the go-ahead to complete the financing of the broadband system at their Aug. 11 public meeting. Cebridge’s appeal prevents the district from moving forward until LAFCo takes further action.”The actions of Cebridge at this point have delayed the district from proceeding and contradict [Cebridge’s] previous statements that they were looking forward to healthy competition,” said Alan Harry, the districts’ director of telecommunications. “This challenge only proves that they are afraid of the services we will be bringing to the community.”At last Wednesday’s district board meeting, Board Chairman Jim Maass had harsh words for Cebridge’s appeal. He said he believes that the district will ultimately provide broadband services to the community, “Because one who studies the broadband industry throughout the United States and the investor-owned telecommunications industries versus the municipal utilities will see time and time again, and city after city after city, the same tactics being directed toward the municipals. But ultimately … the municipals eventually serve the public.”In an e-mail to the Sierra Sun that contained his comments made at the meeting, Maass said Cebridge is no different than what has gone on historically in other communities. “I caution the people of Truckee to pay close attention to what is going on and what will be going on in the weeks and months to come,” he said. Maass argued that the Cebridge appeal is just an attempt to keep the district from competing for customers.”If the PUD is going to fail, why would [Cebridge] care, let us fail, it won’t affect you at all… You know we will not fail – plain and simple. You don’t want us on the playing field. You don’t want the Truckee citizens to have a choice. You want to be the monopolist player in this community,” Maass said.After that meeting, Pete Abel, vice president of corporate communications for Cebridge Connections, defended his company’s decision to appeal the project, citing concerns about the district’s business plan for the broadband utility and a potential subsidy of the new utility by the district’s current water and electric customers.Abel said that to power its operations, Cebridge uses a lot of electricity. “We pay quite a bit of money for the electricity we use, and if they fail, and their reputation is damaged in the financial markets and their interest costs increase, that will force our electric rates to go up just like everyone else. And I don’t want to have to pay higher electric rates because of a mistake,” he said. “Number two … we want to make sure they [the PUD] plays by the same rules.”Cebridge officials contend that the district’s proposed transfer of a fiber-optic conduit to the broadband utility constitutes an illegal subsidy. The issue, according to Dave Gilles, Cebridge’s vice president of operations, is that the conduit might be worth as much as $5 million if it were sold on the open market. However, the district’s broadband utility, which will use the conduit to provide broadband services to Truckee customers, will only have to pay a fraction of that value for it.Peter Holzmeister, the district’s general manager, dismissed Cebridge’s claims, stating that the utility’s broadband operation will be required to reimburse the district the same amount it paid for the conduit. Such agreements are fairly common between the district’s water and electric utilities, which share many resources such as office space and computer systems and then repay each other for the cost of those services, Holzmeister said.Cebridge’s representatives also worried that LAFCo did not conduct a thorough enough review of the district’s broadband business plan. Both Abel and Gilles argued that many of the assumptions in the district’s business plan were flawed and that LAFCo should hire an independent expert in the telecommunications industry to verify the claims.”LAFCo has said it’s not their responsibility to determine whether the business plan is viable, it’s the PUD’s responsibility. But LAFCo’s own policies and standards very clearly state that it is their responsibility to make the determination whether it is viable and not the PUD’s,” Abel said. Holzmeister, on the other hand, was confident that the LAFCo review of the broadband business plan was satisfactory.”They were more than thorough,” he said, noting that the district and LAFCo worked closely in refining the broadband business plan to meet LAFCo’s standards. “They really put us through the hoops on this thing.”LAFCo
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