Inside the issues: Of fiber, broadband and OPALCO board election

After the CenturyLink fiber optic cable break earlier this winter, support increased for expanded broadband communications in San Juan County.

Many members want access to expanded communication services from OPALCO, but critics want to be assured that electricity customers don’t pay for fiber optic deployment and internet connections.

It’s a key issue that dominates the debate for the two board seats from San Juan Island that are up for election this year.

At the first meeting after the CenturyLink outages, the OPALCO board told the cooperative to extend its backbone system of fiber optic cable on and between the islands. Although some OPALCO members want OPALCO to be the provider of more broadband telecom services, other members, including two candidates for the OPALCO board, Steve Hudson and Bryan Hoyer, don’t want broadband expansion to be financed by electricity ratepayers.

Mark Madsen, who ran for an OPALCO board seat three years ago, expresses a middle view in an op-ed elsewhere on this website:

“There are major challenges ahead in the process of planning broadband services and delivering them to … San Juan County.” Madsen concludes that the entire community must be involved, but “the degree to which OPALCO should serve end-users directly … or make its capacity available to wholesalers like ISP’s or neighborhood associations needs careful thought.”

Since 2004, OPALCO has been growing its fiber optic capacity, much of it to service its electricity distribution system. OPALCO’s Island Network has opened its system to 54 locations, and now is connecting businesses and county governments entities to its system. Its latest compilation of end-users of the network lists 22 businesses, six medical facilities, five government agencies, three fire districts and two pharmacies. OPALCO is a telecom competitor.

After pursuing an unsuccessful broadband initiative which asked members to sign up for an OPALCO broadband service, OPALCO considered and rejected a contract for provision of broadband services by CenturyLink, the local telephone company that provides DSL internet service itself and also resells service through Rock Island Technology Solutions.

Now, OPALCO is moving ahead with expanding its Island Network services from its base of fiber optic cable servicing its electric grid. It is already an internet service provider and a network provider, mostly in populated areas like Friday Harbor and Eastsound, and it resells “backhaul” fiber connections to ISPs such as Rock Island, The Computer Place, CenturyLink, NoaNet and Zito Media.

OPALCO, therefore, is a full competitor with other telecom companies and ISP’s such as CenturyLink and Rock Island Technology.

Although some connections are internet or network connections to private businesses, many are to government, such as San Juan County and the Sheriff’s office, through NoaNet, a public utility-owned reseller of communications services. This is why county offices, the sheriff’s office and the library remained on-line during the CenturyLink outage. All OPALCO services are billed to customers on a non-profit, cost of service basis.

The money for broadband is coming in part from the $38 million standing loan fund made available from the U.S. Department of Agriculture Rural Utilities Service, but loan amounts are not disbursed until projects are completed.

OPALCO explained its intentions for the current four-year program:

“In the current construction work plan, there are approved projects whose purpose is to improve safety and data communications in the field for our operations staff that involve expansion of the grid control backbone: mostly fiber.”

At its recent community meeting series, the OPALCO board and management team explained that as the grid control backbone expansion projects are completed, more broadband connections will be made, first in population centers (such as Friday Harbor, where connections are now being completed), then near access points on existing fiber lines, followed by neighborhood connections further from access points. Whether “neighborhood connections” means OPALCO will retail or wholesale broadband connections to individual members is not clear.

The crux of arguments made by board candidate Steve Hudson and active members like Gray Cope is that the fiber program being implemented is more than what is necessary for electricity delivery and this excess capacity is being paid for by electricity ratepayers.

At a recent meeting with members on San Juan Island, Cope commented, “We should do what cooperatives are built to do and that is have those who use the system the most pay their equitable share. … If 95 percent of the traffic on our co-op’s fiber backbone and the wireless expansions are carrying broadband and telecom then those users should pay that portion of the costs to expand, maintain and operate that infrastructure.”

Cope also commented that OPALCO should leave retail broadband services to ISPs and not try to provide internet and other telecommunications services directly to non-commercial member.

“I believe our co-op should get into broadband, but limit it to wholesale and let others do the retail and take on that cost and those risks,” Cope said. “It is clear to me from the failed first plan that they do not understand the broadband market.”

OPALCO provided a comprehensive response to the question of who pays for what services:

“The answer is very clear: all members pay for the grid control backbone that runs our automated electric distribution system. Just like with the replacement of the submarine transmission cable in the crossing between Lopez and San Juan islands: all members will pay for that piece of the system – not just those who live on San Juan Island. For broadband services, which are delivered through Island Network, each connection pays for itself. Members pay the cost to connect to OPALCO’s backbone and then pay the cost of service on a monthly basis – just like on the electric side.”

OPALCO and the OPALCO board are on a transformative path for the cooperative and the county. The 2014 election of two San Juan Island board members will not derail that transformation or even answer the “who pays” question.

The question before the membership seems to be whether questioning of that transformation comes from within the board or from the audience.