Caution urged on telecom plans
Following a lengthy meeting in a standing-room-only Truckee Sanitary District board room, the message by Nevada County’s Local Agency Formation Commission (LAFCo) to the Truckee-Donner Public Utility District’s proposal to offer its customers telecommunications services was: proceed with caution.
The proposal was approved unanimously by the commission, but the PUD now has the responsibility to meet a list of terms and conditions before a certificate of compliance can be issued.
At the LAFCo meeting and public hearing, commissioners heard from Truckee residents, USA Media cable television representatives and even from a Pacific Bell representative on the utility district’s plans to provide broadband services including cable TV, telephone, high speed Internet access and data transfer.
Members of the public lined up to address the issue to the board. Comments ranged from enthusiastic support to strong disapproval over the concern of putting ratepayers at financial risk and the argument that public agencies have no right to compete with private businesses.
“We are a rural community,” LAFCo commissioner Peter Van Zant said to the PacBell representative. “Quite frankly, we don’t get the service from the private (companies). The conventional wisdom is privates do better in (the communications) business than publics. Where are the privates in this particular realm?”
However, some members of the public debated whether there was a need.
“The PUD is an unregulated monopoly,” said Ted Langan, a Truckee resident in opposition to the plan. “It is using its protected position to prey upon the private sector … This idea erodes our tax base in Truckee, which has to be made up somewhere. Who’s going to pay? I’m perfectly happy with other services available and I don’t see how the PUD can do any better.”
There were also comments from Truckee residents who work out of their homes and rely on telecommuting for business purposes.
“The service that we have in Tahoe Donner for telecommuting
is awful,” said Jack Schwartz, a technology expert who lives in Tahoe Donner.
“I’m here as a fan of competition,” said Fred Bush, also a Tahoe Donner resident.
Roger Terneuzen, Regional Manager for USA Media, spoke in adamant opposition to the PUD’s proposed venture, calling it a “highly speculative and very risky venture.”
“Throughout this application process, the PUD has switched several gears and much of their data is vague, inaccurate, and in many cases has provided to cast a dark shadow over my service, the service from PacBell, and the general bleak conditions that they see today in Truckee,” Terneuzen said at the meeting.
Terneuzen said he was disappointed by LAFCo’s decision.
“The issue is not about USA Media or my fears about competition,” he said. “The issue is about TDPUD – whether it’s proper for them to spend ratepayers’ money recklessly, whether it’s right for them as a government agency to compete with a private business. The real issue is that they’re proposing no services that aren’t already available in this community.”
TDPUD General Manager Peter Holzmeister said he was impressed with the members of the public who shared their opinions at the meeting.
“There were many new faces who expressed interest in improved services,” Holzmeister said. “It was heartening for us because that’s exactly the type of service we want to offer. I do believe we plan to offer a service people in Truckee want.”
Holzmeister said the PUD will be working to meet LAFCo’s conditions in a timely matter.
“The conditions they’re imposing are not unreasonable and we’re in accord with that,” he said. “We now have a lot of work to do. We need to finalize our analysis. Risk mitigation is potentially the most important part of LAFCo’s approval.”
LAFCo’s Executive Director S.R. Jones said the ball is now in the PUD’s court to complete its risk mitigation agreement, which will be analyzed by an independent consultant hired by LAFCo.
Before the utility district can receive a certificate of compliance from LAFCo and put its broadband plans into service it must prove it has met the following conditions:
— Plans are limited to the following services: cable television, Internet access, data transfer and telephone service.
— Prior to assuming additional debt to finance the initiation of communications service, the district must:
-Prepare and submit a Master Service Element for the services it intends to provide.
-Adopt a risk mitigation plan adequate to ensure its water and electrical service ratepayers will not be required to subsidize the new services or support the repayment of debt incurred for the new services. The risk mitigation plan must contain a fully articulated legally enforceable risk mitigation agreement with an experienced and credible underwriter. The plan must be submitted to LAFCo for its review and approval. The review must be conducted by an independent and qualified consultant or consultants selected by LAFCo and working under LAFCo’s direction with full participation by the PUD.
-Apply for and obtain franchise agreements with all applicable jurisdictions, including the Town of Truckee, Placer County and Nevada County, or reach alternative agreements satisfactory to those agencies.
If the PUD does not comply with the terms and condition of LAFCo’s resolution sufficiently to allow the commission to issue a certificate of compliance within two years, the approval will expire. The PUD has until Jan. 1, 2005 to offer telecommunications services to its customers if the district is granted a certificate of compliance.
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