PUD to sell Zipp video equipment
EPHRATA — The Grant County Public Utility District commission is expected to OK the sale of equipment, intended to deliver video via the Zipp fiber optic network, next week.
District telecommunications engineering staff, in a Dec. 6 report to PUD management, recommended the video head-end equipment be sold. That equipment, which engineers claim requires considerable expense to once again become operational, is slated to be sold in parts. The PUD plans to keep some of the equipment.
"It seems to be one way for us to make use of some of the equipment that we need and can use to save money," said Commission President Randy Allred. "It is a way to get something out of (the equipment) while it still has even a small salvage value."
Allred said the district tried, on multiple occasions, to sell all the head-end equipment together. Bids never matched the estimated value of $276,000.
The PUD's video head-end facility, with its large antenna and satellite receivers, was designed to pick up video content. The head-end equipment includes an encoder for transferring the content into a digital format for transport on the Zipp network.
The PUD constructed the head-end facility to sell wholesale video to service providers. The providers would turn around and sell video to subscribers on Zipp. This added video to the list of products available on Zipp, providing additional revenue opportunities for the district.
Operating the head-end facility proved difficult, as content providers expected to deal directly with entities in the business of retail sales, a February 2005 Zipp business plan states. The district, as a public entity, was limited to providing video wholesale.
The PUD initially proposed hawking its video head-end equipment in March 2005, when a 3-2 commission vote brought fiber optic network build out to a halt and into "stand pat" mode. That meant no further construction of the network, but allowed residents to connect to the system where fiber was already available.
Commissioner Tom Flint said the head-end facility has a lot more value now — to the utility and the fiber optic project — than when the "stand pat" decision was made.
"It's premature to let go of (the equipment) at this point in time," Flint said.
He estimated the district paid roughly $2 million for the head-end equipment. The PUD may need the video head-end in the future, Flint said, if the policy on build out changes.
The equipment currently sits idle, the internal district report states, and is no longer viable. It requires upgraded encoders.
If the district were to re-establish the facility, a service provider would need to come forward and be able to provide video or TV to retail customers. But even with a video provider, the PUD still doesn't have the required set-top boxes to enable retail customers to view the content.
Additionally, the PUD would have to create new staff positions assigned to facility upkeep, the report states.
Reusing the video equipment potentially saves the PUD $110,150 on future purchases, the report estimates. The PUD gets a combined $150,875, if the district sells part of the equipment to bidders and saves on future equipment purchases, according to the report's calculations.