Providers, PUD commissioners seek consensus on rate increases

Discussion nets praise for team work abilities

While nobody was entirely thrilled, service providers at the Zipp fiber network and Grant County PUD commissioners were pleased with their ability to work together.

The two groups met for a three-hour work session Thursday morning, after PUD commissioners put off finalizing the expected rate increase at their business meeting Monday.

As previously reported, the resolution calls for a number of changes in the structure of rates that service providers must pay the PUD. The most significant is a jump from $15 per megabyte of bandwidth (which represents one Internet customer) to $22 per megabyte.

The new plans keeps the additional $5 charge to bundle the Internet with video or telephone service. Providers will be charged $30 for commercial fiber users, a new rate class.

The purpose of the session was to review the telecom rate schedule and allow the providers an opportunity to give input into the process about the proposed rate schedule's potential impact, Commission President Tom Flint told the gathered group at the beginning of the meeting.

"We need to get on with the process of rates, but we want to do it the right way that has the least impact to everybody and that everybody is on board with what's going on," Flint said.

The rate increase is necessary, parties from both sides agree, to keep the PUD financially healthy enough to support the fiber system, but providers were concerned about how many people they would lose when they raise their rates.

Craig Jungers, vice president of the service provider Network Essentials, said that the two goals of the group were to increase money for the PUD, and not put any of the providers out of business.

Among those concerns raised during the course of the discussion were costs to providers bundling the Internet with video and telephone services, the lack of building out the fiber network in well-populated areas like Knolls Vista and Mae Valley, attempts to bring in new customers and the cost of bandwidth.

At the meeting's completion, service providers supported two changes to the plan. The new rate schedule will take effect Aug. 1 instead of July 1, and providers will be required to pay a minimum monthly bill that will reach $1,000 in 18 months, said Eric Briggs, fiber account manager for the PUD.

Many of the people involved found the meeting encouraging.

"It was positive," said Steve Frazier, owner of Net Plus. "They seem to be taking positive steps to come to an agreement and hopefully make the fiber viable going into the future. I would have liked to seen them say, yeah, they're all going to vote for it, but they don't want to say that."

Frazier said it sounded like the commissioners could vote five for five for the rate increase as the changes had been talked about, which was fine and needed to be done, as far as he was concerned.

"I just think we should try to start having a little bit more cooperative attitude on the commission and start running it a little bit more like a business, so I think they're all right; I think they're doing fine," he said.

"We started out, everybody had their own opinions and we ended up adopting pretty much the same rate schedule that we started out with with just a few little changes here and there," said Melissa Tippets, operations manager of Donobi. "The rate increase is important because the fiber project has to succeed. We put a lot of money into it through the PUD, and if we don't raise the rates, there's no way the fiber project can succeed. So, raising the rates is the first step and what we need to do."

Jungers said he had a positive feeling about the meeting.

"Certainly we articulated what the positions we had were, and I think we've got at least everybody understands what went into it," he said. "Not everybody's happy with everything, I'm not happy with everything, but nobody gets everything they want in this world, so we get what we can live with and hopefully we can move forward."

Alan Cain, owner of BigDam.net, said there was no choice but to go forward.

"Timidity at this point in time is suicide," Cain said. "We need to make the commitment, we need to move forward. The network is worth a hell of a lot more than we're paying for it. We need to go there. Quite frankly, the price has been way too low for too long. The only issue is timing; timing is better now than later. (The meeting) was reasonably successful. I am encouraged, I'm glad."

PUD Commissioner Mike Conley said he was happy to see service providers "fairly united" with support of any program.

"I just know we have to get this rate implemented and get it going," Conley said. "We can't keep everybody happy, that's a given, but fiber in my mind is an asset to the county and we've got to figure out how to make it work."

Conley said that he understood that a new implementation would be that any new service provider coming on board would have a $500 charge up front, but would still have 18 months to reach the $1,000 minimum.

"You don't get in without some cost to the PUD," he said. "That doesn't probably cover our start-up cost, but at least we know they're committed."

Flint echoed Conley's impression of the ability of people to work together.

"It's good consensus working together, going forward and we haven't seen that here for a long time, so I'm really encouraged by it," he said.

Scott Daniels, one of the owners of Genext, said he thought the work session covered a lot of ground in three hours, being that it was the first time several providers had been with the group.

"I think they understand a lot more about why we came up with the rate proposal that we did," Daniels said. "Whether or not everybody agrees is a different matter, but at least we were able to tell them why we did what we did. The recommendations that we're making … they're not always in anybody's best interest. It was a compromise, but I think it went pretty well for the first time to be able to sit down as this group."

Daniels said the outcome would be found out when the PUD commissioners vote on Tuesday.

"It was a working session so the commissioners would be better informed on what it is they're going to vote on Tuesday," he said. "That was the goal, and I think we accomplished that very well, but as far as how they vote, that's up to them and we'll learn that on Tuesday."

Marlon Schafer, who represents the Odessa office of Accima, said he was in awe at how civilized the various competitors were, especially considering what he called "the past two years of shenanigans.

"To be able to come to a meeting like this and discuss these issues without anybody getting mad, throwing chairs and whatnot, it's an honor to be a part of a group like that," Schafer said. "Whether I agree with everything they've done or not, it's a great group of people. If anybody's going to be able to rescue this program, this is the group that's going to be able to do it."