TDPUD board waits to approve telecommunications business plan
The Truckee-Donner Public Utility District board of directors delayed acceptance of the telecommunications business plan at last Wednesday’s meeting, and agreed certain details needed to be worked out before the plan was submitted to the Nevada County Local Agency Formation Commission (LAFCo).
“We need to have a conceptual discussion to get on the same page,” board president Ron Hemig said.
Board member Pat Sutton suggested the details should be worked out before being subjected to LAFCo scrutiny.
In order for the district to enter into the telecommunications business and build a fiber-optic system, it must receive LAFCo approval to activate its latent telecommunications power.
Before an application is submitted, the board must approve the telecommunications business plan, the community survey results as well as a $5,000 deposit to LAFCo for retaining special legal counsel.
The $6.5 million fiber-optic system would encompass the Supervisory Control and Data Acquisition systems (SCADA) upgrades, Internet services as well as cable T.V. services. The intent is to lease dark fibers to various local and regional telecommunication providers.
“The revenue potential for the lease of dark fibers is significant,” TDPUD telecommunications director Alan Harry said to the board. “It is our intent to market that service.”
The business plan now includes the capability to serve telephone companies, a recent addition that board member Sutton said was confusing.
“Now I think we’re being confronted with the possibility of providing phone service,” Sutton said. “I think we’re getting way beyond what a district this size, a population this size, can really function well at. We should find our niche and do it well, not try to do everything we’re capable of.”
Harry explained the district simply didn’t want to limit its possibilities for the future.
“The technology is moving forward in such a way that we very well could provide that service,” he said. “We wanted to bring forward to the board with this business plan a good understanding of what you could do.”
Harry also stressed to the board the business plan is a feasibility study, that can be changed as time goes on.
“We can modify this document in that it belongs to the board,” he said.
TDPUD board and staff members also heard from members of the public, who expressed views both against and in support of the district’s plan to enter into the telecommunications business.
Paul Duggan, a full-time Truckee resident and retired computer business executive identified both philosophical and practical concerns with the business plan.
“A public utility should not compete with private firms,” he said. He noted the PUD would have an unfair advantage over a private company because the district is tax exempt, has a lower cost of capital, can’t go out of business and doesn’t necessarily have to be profitable.
It would be trading a private monopoly with a public monopoly, he said, because no private firm would be able to compete.
Duggan also identified some practical concerns he had with the survey results. The district recently hired Sierra Market Research (SMR) to survey district customers on their satisfaction with current Internet and cable TV services and how likely they would be to purchase those services from the PUD if available.
Duggan, who was actually one of the nearly 400 customers surveyed, said he did not believe that 78 percent of those surveyed could really have Internet access.
He also said the results were misleading because the options weren’t really laid out.
“Who wouldn’t want improved cable TV service,” he asked. He was concerned the numbers weren’t valid because the survey assumed USA Media is not going to improve their services.
“I don’t think it’s something you can base a business plan on,” Duggan said.
He also said the survey should have asked, “Do you think this is the right thing for the PUD to do?”
Tom Ballister, also a full-time Truckee resident and chief technical officer of a central European direct bank, shared Duggan’s concerns.
He said Internet Service Providers and telephony services are complex businesses and plans must be very detailed in order to have confidence in viability.
Two full-time Tahoe Donner residents, Mary Davis and Lin Zucconi, were there to support the district’s telecommunications business plans.
“I do believe there are 78 percent of (Truckee) residents on the Internet now,” said Davis,a member of the Tahoe Sierra Board of Realtors.
“If the private industry could have provided [these services], I would think we would have it by now,” she said. Complaining that getting on the Internet was extremely slow, she said she has researched every other avenue and there is no relief.
“I say, ‘why not.’ Who’s a better provider [than the PUD],” Davis asked. She mentioned she was also interested in taking classes via the Internet.
“I think the PUD providing a platform for the community for these methods of communication that are desperately needed, is a good thing.”
Zucconi agreed with Davis, and said the Truckee-Donner PUD can provide the pipe to give consumers every option possible for entertainment, Internet access and other possibilities in the future.
“Because it’s the Truckee-Donner PUD, you’re all responsible to us,” Zucconi told board and staff members. “You guys will listen to us, and I don’t think any of these big companies listen to us in a reasonable way.”
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