Discuss article submitted to San Juan Journal

I commend Alex for his thoughtful responses. I agree the OPALCO board should have opened up their broadband planning to stakeholders earlier. To be clear stakeholders should include co-op members, not just ISPs and OPALCO's Island Network present or potential customers.

I agree that adopting the right policies is extremely important. Those policies and our Co-op's primary purposes should guide us in deciding whether an expansion into unfamiliar markets makes sense. More importantly those policies and purposes should guide our Co-op in weighing out the opportunity costs of the wireless expansion if it means we are not fully investing in making our co-op less dependent on BPA supplied electricity.

Perhaps the wiser choice is to spend such sums to make our Co-op an eventual net producer, rather than a net consumer of electricity. This is probably where we need to be headed over the next 50 years.

The Internet was built upon collaborative and open planning. Why can't OPALCO use the same process in its broadband planning? It is not as if that 2Gb/s fiber optic highway to the mainland is going to be stolen by an open planning process. It seems the recent OPALCO broadband forums were delayed until years after deciding to “open” their Island Network. Those forums were timed for the week before the County Council closed public comments on the new tower ordinance. Near the end of that public comment period at the May County Council meeting an OPALCO's board member stated that they had *not* completed their technical due diligence, but they wanted the ordinance passed. What if OPALCO finds out they need 180 foot towers instead of the new legal 150 foot limit they pushed for? It just doesn't seem logical to me to request the tower ordinance changes when your due diligence is incomplete.

The partial conclusions I currently have are the OPALCO board is uncertain of what it is doing, is unwilling to open their planning in a collaborative way, unsure that the expansion will be widely accepted if fully understood, and they are concerned about the return on investment or revenue proposition. That uncertainty would not bother me if there were a more open planning process that included their stakeholders all along the way.

Alex is right to point out the number of failed broadband expansions taken on by electric utilities. Ultimately, their customers pay the price of those business failures in higher electric rates.

OPALCO seems to have partly relied upon the broadband market research report produced by the SJC Economic Development Council and SJI Community Foundation. This report appears to be based on a non-random, partially anecdotal 520 respondent survey which focused primarily on San Juan Island and its underlying methodologies were not disclosed. To the extent we can trust their report it can be believed that something between 82 and 91 percent of responding residences and businesses are using ADSL broadband through CenturyLink and Rock Island.
Find the report here:
opalcowireless.boards.net/index.cgi?board=opalcowirelessplans&action=display&thread=17

While Rock Island was the pioneer and offers value that CenturyLink does not and has its own backhaul to the mainland its DSL customers are getting to them through CenturyLink's network. Given that broadband report how can OPALCO make a dent in the current broadband market without steeling customers away from CenturyLink and Rock Island?

While OPALCO's Island Network has had mixed success competing against CenturyLink and RockIsland the revenue opportunities are not clear for our Co-op's planned extracurricular expansion. The revenue picture is particularly hazy if you consider that our Co-op's entry into the wider broadband market will spark a broadband price war, which OPALCO has promised to match by saying they will be competitive.

In the short-term a price war will benefit broadband customers. The mid- to long-term picture is less clear. CenturyLink has had a terrible track record of expanding the reach and performance of its ADSL networks in rural areas. Slower than advertised data rates and high pricing is a complaint of CenturyLink rural customers across the nation. However, CenturyLink may well go “all in” and make the needed improvements when they realize they could be at risk of losing both broadband and phone customers in significant numbers to OPALCO's expansion. These responses in the market could leave our Co-op with an underutilized broadband expansion or poor return on investment.

I am not eager to see our Co-op do battle against CenturyLink who has total cash of $1.5 Billion and annual net income around $500 Million. I believe that is a battle we are ill prepared for. Let us keep in mind that CenturyLink is a Co-op member and they may well have legal concerns about the board reaching into a market clearly outside its specific purposes for existing as defined in our articles of incorporation.

The biggest policy question of all is should our co-op divert from its primary purposes of providing electric service and get into an entirely different market? Basically going from a monopoly electric market into a competitive broadband market. I believe that decision should be left to the full co-op membership after they are well informed and not just left to 7 well intentioned board members.

OPALCO's board should be scared about taking on CenturyLink in a market it has little experience in and so should every single Co-op member. The future health of our Co-op may be at stake.

Explore further at opalcowireless.boards.net

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