Fiber rate increase delayed

Work session to be held Thursday morning

Grant County PUD commissioners put off finalizing the expected rate increase for service providers on the Zipp fiber network at their Monday business meeting, even though some providers had already warned their customers the hike was coming.

Commission President Tom Flint said the rate-increase resolution was tabled so a work session could be held Thursday from 9 a.m. to 12 p.m. at the PUD's main building.

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 plan 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 new structure was developed by the PUD's fiber team, who consulted heavily with local service providers. Parties from both sides have agreed that an increase is necessary to keep the PUD financially healthy enough to support the fiber system, but providers worry about how many customers they'll lose when they raise their rates.

Alan Cain, who owns the service provider BigDam.net, told commissioners he mailed a letter out to his customers last week explaining the rate increase, and seven responded by dropping the service.

"It is going to be painful. It is going to hurt," he said.

Marlon Schafer, who represents the Odessa office of Accima, told commissioners he too sent out letters to customers saying the rate increase would take effect July 1 because that was the word he received from the fiber team.

Larry Jones, director of the telecommunications department, said his team sent that word out because July 1 is the scheduled date for the rate increase the application sent out for a federal Rural Utilities Services loan from the U.S. Department of Agriculture.

Steve Frazier, who founded the The Computer Place in Moses Lake and works as a consultant for service provider Net Plus, told commissioners they

need to develop a concise reason for the rate increase so service providers can pass that down to their customers.

Frazier wants something "I can take to my customers and say, 'This is why you are being charged more to surf the Internet,'" he said. "I'd kind of like you all to get on the same page, so I can get on the same page with you."

Commissioner Mike Conley said the issue for commissioners is one of education as to what the rate structure will look like and how many customers will be lost because of the increase.

Melissa Tippets, who represents service provider Donobi, said her company also supports the rate increase. Providers will see their customer lists shrink by approximately 10 percent, she said, but things will turn around.

"It'll pick back up. They'll get tired of the dial up because it's not fast enough, and they'll be back," Tippets said.

Tippets also clarified the rumors as to how far Donobi is behind on payments. Donobi has paid more than $369,000 to the PUD for rates after taking over four different service providers and is currently $80,000 behind in its payments, about three months' worth, Tippets said.

She added that she would like to have at least 60 business days to absorb the rate increase.

Craig Jungers, vice president of the service provider Network Essentials, said he would like to see a lower rate for virtual local area networks so as to attract more customers.

"Once again, we're on new ground. We really don't know what we're going to do with this," Jungers said of the new rate structure.