Post by Gray Cope on Jan 21, 2013 12:02:16 GMT -8
Update as of January 20, 2013:
At this point it appears our cooperative members will not get to vote on whether our cooperative saddles them with debt to branch out into consumer broadband.
Here's what was decided and discussed at the January OPALCO board meeting last Thursday:
Our board members voted to initiate an educational process regarding a possible expansion into consumer broadband. Yet to be seen what form that will take. Will our energy members be allowed to examine the business plan, understand the financial risks, as well as examine the wireless coverage analysis report and data or will it be closer to a sales pitch?
Hopefully this will be a two-way educational process where board members and staff can hear the concerns and questions of the membership.
It was decided OPALCO will ask for a measure of pre-commitment from members to subscribe to consumer broadband with a one-time no-risk $100 down payment. The pros and cons of whether to separate the educational process from the buy-in were discussed.
Ultimately the board decided to not specify up-front a required percentage of members as a go, no go decision point. They also decided they would not separate the buy-in from the educational process. Members will be allowed to pay their $100 at the same time they learn about the specifics. This suggests there may be little or no modification of the plans based on member feedback.
It was decided there will be a $15 tariff added to every energy members monthly meter billings to help cover the capital expansion costs. In my opinion this violates our co-op's core principle #3 requiring all members contribute equitably to our capital since many will not be able to get or may not want to subscribe to the service.
My impression is that the process is the sort of thing needed for the board to derive a financial decision point.
My concern is that a buy-in is not a democratic process. By its nature it does not measure the nays as opposed to the yeahs. Low income households may not be adequately heard from.
My hope is that the board will use the similar controls it uses to validate real member voting to ensure the one member, one vote egalitarian nature of our cooperative.
The claimed consumer broadband subscription cost will be $70 per month. Nothing mentioned about who pays for the cost to install the radio-antenna on the subscriber's premises or run the cable into your house along with lightning suppression, grounding, and power equipment.
My concern about one size fits all pricing is that it is not how the real-world consumer broadband market works where stepped pricing and performance choices exist. Also, $70 is not a realistic price to compete against existing broadband offerings in Friday Harbor which has 16% of the county populace and has a number of cheaper choices (ClearWire, Zita Media cable, ADSL at more than adequate speeds in town).
The board intentionally chose not to set the number of pre-subscriptions that had to be filled before they would decide to take us into the consumer broadband business. So there may be no requirement of at least a simple majority of members signing up.
It was clear when one board member was trying to get clarity on these issues that the board had previously taken what they termed a straw vote. This may have occurred in one of the many closed executive meetings the board has had in previous months. I have attended the last 4 board meetings and have never seen a dissenting vote (in open meetings). Hopefully this is not the case in closed executive sessions. I will say that I appreciate that our board members frequently ask good, challenging questions in their open sessions as they deliberate and that is a very healthy thing. The last thing I want is a board that operates like a hive mind.
There was also discussion about using a “Medicare Plan B” type of subscription incentive. If you decided to be prudent and wait and see how OPALCO wireless broadband worked for others before subscribing then you would have to pay subscription fees backwards to the start-up of the offering. I guess that would be a little bit of pressure for members to subscribe right away rather than wait.
The board has all our local ISPs bound to non-disclosure agreements. It appears OPALCO will buy-out all the local competition. Unknown how many millions of $ this would add to the cost.
Say goodbye to our local ISPs. Uncertain how many ISP related jobs, if any, will be lost.
New ISPs might startup given CenturyLink is required by law to provide access to the consumer.
The board decided to go into term negotiations to buy licensed 700 Mhz spectrum to implement the wireless broadband. It was not stated in the board meeting how many millions of $ this would add to the cost, but the amount from the ready seller is not negotiable only the terms are to be hammered out.
I confirmed that the decision to use 700 Mhz spectrum was due to its lower susceptibility through the tree canopy and other such terrain related interference. I also confirmed during the board meeting that the calculations had been made to ensure that 20Mbps download speeds can be achieved in the densest potential subscriber areas on any single radio-antenna mounted on a tower. I will be looking to examine these calculations to confirm this for myself. 20Mbps download is the claimed subscriber capacity that can be achieved with a firmware/software upgrade using the same hardware. It is not clear to me yet whether that wireless download data will be shared in the same frequency as the upload data. Keep in mind that 700 Mhz has a lower maximum total data throughput than GHz frequency spectrums.
I was told by execs after the meeting that OPALCO will not allow new local ISPs to use our wireless broadband to access subscribers if it is built. An understandable consequence of the business model they are going after, but not necessarily the best thing for our county.
One politician running for County Council shared his feedback with the board about what OPALCO members are telling him. He stated that some members were saying they will get off the grid if OPALCO forces them to shoulder a broadband tariff added to their bill. Others were asking him why Roche Harbor is getting fiber before them. I clarified that members are confusing fiber run between our sub-plants for monitoring and controlling the grid (smart grid) with consumer wireless broadband. I reiterated my message to the board back in October that members are misinformed how smart grid is not the same thing as wireless consumer broadband and they should address this confusion.
I have spoken to people who don't understand the distinction between smart grid and consumer wireless broadband. Nor do they understand that expertise in smart grid does not translate to expertise in consumer wireless broadband. They believe the publicity rhetoric that OPALCO can leverage its excellence in electricity into wireless Internet service. If you look at any website of a responsible experienced WISP (Wireless Internet Service Provider) you will see the disclaimer something like this “we can not guarantee service or performance without doing a site evaluation.” This is not the rhetoric we are hearing from our cooperative. So caveat emptor. Wireless like any technology has its limitations in theory and the real world.
The board has not announced whether they will discourage cellular carriers from allowing their subscribers to use their Internet access over their cell phones. If OPALCO does not allow cellular broadband use it may not be very attractive to cellular providers to collocate on our towers which is needed to address cellular dead spots. Allowing cellular collocation is a publicly expressed goal of the board with the proposed DAS towers. If OPALCO does allow cellular based broadband it may become a source of competition to our co-op.
This current plan requiring all our co-op member owners to pay a $15 tariff on their billings is a violation of our organizing 3rd cooperative principle, “Members contribute equitably to, and democratically control, the capital of their cooperative.” Given it is known a significant number of members will not be able to get or will not want to get our consumer broadband and they will still have to shoulder the burden then this violates the equitable contribution principle big time. In principle they may end up having a legal right of action against our cooperative.
Our own Articles of Incorporation make it likely that such members indignant over a tariff requiring them to pay for something our cooperative is not explicitly purposed will have a legal course of action against our co-op. This is something I spelled out in my November letter to the board. Simply put Article VII, section 3 requires the obligations placed on the members must not be inconsistent with our our articles of incorporation which clearly limit our purposes for existing to energy related purposes. If the decision to go into consumer broadband is not added to our purposes then forcing non-subscribers to pay that tariff may be a violation of that clause.
An OPALCO exec confirmed during the board meeting the estimate to build the consumer broadband system is still $34 million as estimated last summer. However, I believe that price is now low if we are buying licensed wireless spectrum and buying out the local ISPs.
Given our board's first estimate of the consumer broadband was $18MM and is now $34MM to build anyone want to gamble that the actual costs are not going higher? Anyone want to gamble that the 90% member coverage predicted by OPALCO is accurate? Or that the guaranteed minimum download data rate of 10Mbps promised is really achievable for all subscribers?
After the board meeting I suggested to management that they create an online forum to allow members to voice their views and concerns. It could educate both board, staff, and membership in a relatively low cost way. A lack of an ongoing community dialogue sponsored by our co-op is why I created the online forum here. It cost me $0 and a few hours of my time to set it up, but I don't want to spend resources advertising it nor should I be the one to do it.
An online forum created by OPALCO would allow low-income members to participate in the discussion through their library online access. Those members were not represented at all in the OPALCO broadband "road show" forums. They had to work. All that is needed is for our co-op to use its publicity machinery to get the word out about our own online-forum as one of the places they can participate in a two-way educational process.
My hope is that every board member participates in whatever educational process is created by our staff so they see for themselves the manner in which it is presented and can sample for themselves the responses and concerns.
OPALCO may be crossing into a new era. It's current path in terms of the $15 charge to all energy members for consumer broadband capital expansion is antithetical to our egalitarian democratic cooperative principals that gave birth to our cooperative in the wake of the New Deal. The related legal challenges are potentially risky. Taking out local ISPs competition and not allowing a truly democratic decision of the membership to alter its purposes to include consumer broadband risks legal action and gives fuel to our would be competitors that our cooperative needs to be regulated by the WUTC. On the other hand maybe the demise of local ISPs around the world signals they are a dying bread.
The saddest thing about it is our members could stop this inequity before it happens, but they refuse to communicate any concern to the board. Most members are too busy to get informed, many uncertain of the issues or what is at stake and many motivated by the hope of improved broadband.
The board does listen. Democracy is only preserved for those willing to stand up for their rights. The Occupy Wall Street and similar movements are looking at how cooperatives might be used to improve our flailing national democracy and we have a beautiful one right here if we truly live by our foundational cooperative principles and the laws that govern it.
At this point it appears our cooperative members will not get to vote on whether our cooperative saddles them with debt to branch out into consumer broadband.
Here's what was decided and discussed at the January OPALCO board meeting last Thursday:
Our board members voted to initiate an educational process regarding a possible expansion into consumer broadband. Yet to be seen what form that will take. Will our energy members be allowed to examine the business plan, understand the financial risks, as well as examine the wireless coverage analysis report and data or will it be closer to a sales pitch?
Hopefully this will be a two-way educational process where board members and staff can hear the concerns and questions of the membership.
It was decided OPALCO will ask for a measure of pre-commitment from members to subscribe to consumer broadband with a one-time no-risk $100 down payment. The pros and cons of whether to separate the educational process from the buy-in were discussed.
Ultimately the board decided to not specify up-front a required percentage of members as a go, no go decision point. They also decided they would not separate the buy-in from the educational process. Members will be allowed to pay their $100 at the same time they learn about the specifics. This suggests there may be little or no modification of the plans based on member feedback.
It was decided there will be a $15 tariff added to every energy members monthly meter billings to help cover the capital expansion costs. In my opinion this violates our co-op's core principle #3 requiring all members contribute equitably to our capital since many will not be able to get or may not want to subscribe to the service.
My impression is that the process is the sort of thing needed for the board to derive a financial decision point.
My concern is that a buy-in is not a democratic process. By its nature it does not measure the nays as opposed to the yeahs. Low income households may not be adequately heard from.
My hope is that the board will use the similar controls it uses to validate real member voting to ensure the one member, one vote egalitarian nature of our cooperative.
The claimed consumer broadband subscription cost will be $70 per month. Nothing mentioned about who pays for the cost to install the radio-antenna on the subscriber's premises or run the cable into your house along with lightning suppression, grounding, and power equipment.
My concern about one size fits all pricing is that it is not how the real-world consumer broadband market works where stepped pricing and performance choices exist. Also, $70 is not a realistic price to compete against existing broadband offerings in Friday Harbor which has 16% of the county populace and has a number of cheaper choices (ClearWire, Zita Media cable, ADSL at more than adequate speeds in town).
The board intentionally chose not to set the number of pre-subscriptions that had to be filled before they would decide to take us into the consumer broadband business. So there may be no requirement of at least a simple majority of members signing up.
It was clear when one board member was trying to get clarity on these issues that the board had previously taken what they termed a straw vote. This may have occurred in one of the many closed executive meetings the board has had in previous months. I have attended the last 4 board meetings and have never seen a dissenting vote (in open meetings). Hopefully this is not the case in closed executive sessions. I will say that I appreciate that our board members frequently ask good, challenging questions in their open sessions as they deliberate and that is a very healthy thing. The last thing I want is a board that operates like a hive mind.
There was also discussion about using a “Medicare Plan B” type of subscription incentive. If you decided to be prudent and wait and see how OPALCO wireless broadband worked for others before subscribing then you would have to pay subscription fees backwards to the start-up of the offering. I guess that would be a little bit of pressure for members to subscribe right away rather than wait.
The board has all our local ISPs bound to non-disclosure agreements. It appears OPALCO will buy-out all the local competition. Unknown how many millions of $ this would add to the cost.
Say goodbye to our local ISPs. Uncertain how many ISP related jobs, if any, will be lost.
New ISPs might startup given CenturyLink is required by law to provide access to the consumer.
The board decided to go into term negotiations to buy licensed 700 Mhz spectrum to implement the wireless broadband. It was not stated in the board meeting how many millions of $ this would add to the cost, but the amount from the ready seller is not negotiable only the terms are to be hammered out.
I confirmed that the decision to use 700 Mhz spectrum was due to its lower susceptibility through the tree canopy and other such terrain related interference. I also confirmed during the board meeting that the calculations had been made to ensure that 20Mbps download speeds can be achieved in the densest potential subscriber areas on any single radio-antenna mounted on a tower. I will be looking to examine these calculations to confirm this for myself. 20Mbps download is the claimed subscriber capacity that can be achieved with a firmware/software upgrade using the same hardware. It is not clear to me yet whether that wireless download data will be shared in the same frequency as the upload data. Keep in mind that 700 Mhz has a lower maximum total data throughput than GHz frequency spectrums.
I was told by execs after the meeting that OPALCO will not allow new local ISPs to use our wireless broadband to access subscribers if it is built. An understandable consequence of the business model they are going after, but not necessarily the best thing for our county.
One politician running for County Council shared his feedback with the board about what OPALCO members are telling him. He stated that some members were saying they will get off the grid if OPALCO forces them to shoulder a broadband tariff added to their bill. Others were asking him why Roche Harbor is getting fiber before them. I clarified that members are confusing fiber run between our sub-plants for monitoring and controlling the grid (smart grid) with consumer wireless broadband. I reiterated my message to the board back in October that members are misinformed how smart grid is not the same thing as wireless consumer broadband and they should address this confusion.
I have spoken to people who don't understand the distinction between smart grid and consumer wireless broadband. Nor do they understand that expertise in smart grid does not translate to expertise in consumer wireless broadband. They believe the publicity rhetoric that OPALCO can leverage its excellence in electricity into wireless Internet service. If you look at any website of a responsible experienced WISP (Wireless Internet Service Provider) you will see the disclaimer something like this “we can not guarantee service or performance without doing a site evaluation.” This is not the rhetoric we are hearing from our cooperative. So caveat emptor. Wireless like any technology has its limitations in theory and the real world.
The board has not announced whether they will discourage cellular carriers from allowing their subscribers to use their Internet access over their cell phones. If OPALCO does not allow cellular broadband use it may not be very attractive to cellular providers to collocate on our towers which is needed to address cellular dead spots. Allowing cellular collocation is a publicly expressed goal of the board with the proposed DAS towers. If OPALCO does allow cellular based broadband it may become a source of competition to our co-op.
This current plan requiring all our co-op member owners to pay a $15 tariff on their billings is a violation of our organizing 3rd cooperative principle, “Members contribute equitably to, and democratically control, the capital of their cooperative.” Given it is known a significant number of members will not be able to get or will not want to get our consumer broadband and they will still have to shoulder the burden then this violates the equitable contribution principle big time. In principle they may end up having a legal right of action against our cooperative.
Our own Articles of Incorporation make it likely that such members indignant over a tariff requiring them to pay for something our cooperative is not explicitly purposed will have a legal course of action against our co-op. This is something I spelled out in my November letter to the board. Simply put Article VII, section 3 requires the obligations placed on the members must not be inconsistent with our our articles of incorporation which clearly limit our purposes for existing to energy related purposes. If the decision to go into consumer broadband is not added to our purposes then forcing non-subscribers to pay that tariff may be a violation of that clause.
An OPALCO exec confirmed during the board meeting the estimate to build the consumer broadband system is still $34 million as estimated last summer. However, I believe that price is now low if we are buying licensed wireless spectrum and buying out the local ISPs.
Given our board's first estimate of the consumer broadband was $18MM and is now $34MM to build anyone want to gamble that the actual costs are not going higher? Anyone want to gamble that the 90% member coverage predicted by OPALCO is accurate? Or that the guaranteed minimum download data rate of 10Mbps promised is really achievable for all subscribers?
After the board meeting I suggested to management that they create an online forum to allow members to voice their views and concerns. It could educate both board, staff, and membership in a relatively low cost way. A lack of an ongoing community dialogue sponsored by our co-op is why I created the online forum here. It cost me $0 and a few hours of my time to set it up, but I don't want to spend resources advertising it nor should I be the one to do it.
An online forum created by OPALCO would allow low-income members to participate in the discussion through their library online access. Those members were not represented at all in the OPALCO broadband "road show" forums. They had to work. All that is needed is for our co-op to use its publicity machinery to get the word out about our own online-forum as one of the places they can participate in a two-way educational process.
My hope is that every board member participates in whatever educational process is created by our staff so they see for themselves the manner in which it is presented and can sample for themselves the responses and concerns.
OPALCO may be crossing into a new era. It's current path in terms of the $15 charge to all energy members for consumer broadband capital expansion is antithetical to our egalitarian democratic cooperative principals that gave birth to our cooperative in the wake of the New Deal. The related legal challenges are potentially risky. Taking out local ISPs competition and not allowing a truly democratic decision of the membership to alter its purposes to include consumer broadband risks legal action and gives fuel to our would be competitors that our cooperative needs to be regulated by the WUTC. On the other hand maybe the demise of local ISPs around the world signals they are a dying bread.
The saddest thing about it is our members could stop this inequity before it happens, but they refuse to communicate any concern to the board. Most members are too busy to get informed, many uncertain of the issues or what is at stake and many motivated by the hope of improved broadband.
The board does listen. Democracy is only preserved for those willing to stand up for their rights. The Occupy Wall Street and similar movements are looking at how cooperatives might be used to improve our flailing national democracy and we have a beautiful one right here if we truly live by our foundational cooperative principles and the laws that govern it.