PUD proposes new telecom rate schedule
EPHRATA — The Grant County Public Utility District Board of Commissioners on Thursday unveiled a proposed new telecommunications rate schedule, causing rate increases for area Internet service providers and their retail customers, according to some providers who reviewed the proposal.
"It will take the profit away," Alan Cain, with Bigdam.net, an ISP based in Grand Coulee, said of the proposed rate schedule changes. "The cost burdens are smallest for those who have the largest number of customers and those who are located outside the county."
Cain calculated what effect the proposed rates would have on his business.
"It's going to be a blood bath," he said.
His payment to the district would increase 162 percent, according to his calculations. He feels he would have to pass on the cost to his customers, and estimates most would see a 50 percent increase in their monthly bill.
He said the special private connections for organizations like hospitals, police departments, accountants and others would all rise 500 percent.
Commission President Randy Allred missed Thursday's rate workshop, but during Monday's regular meeting he said the district's intention was to create both fair and equitable rates.
"It was never intended to be a rate increase," he said.
"This is an extremely hostile place to be a service provider," said Kelly Ryan, a Moses Lake resident who reviewed the proposed rate schedule. Ryan was the CEO and founder of VIB-TV, an Ephrata-based ISP which discontinued service last year.
"These rates are going to have drastic impacts to the take rates, to the number of customers taking service, and to the consumers and citizens and businesses and the schools here in Grant County," he said.
Currently, about 25 ISPs serve around 4,200 retail customers or end-users in Grant County. About 10,000 retail customers are available for service, meaning take-rates equal approximately 42 percent, according to district officials.
Ryan fears some local providers are not aware the PUD is creating a new rate schedule for telecommunications services and believes the public needs to become more involved in the process.
Craig Jungers, owner of Moses Lake-based ISP Network Essentials, and Cain drafted a replacement rate schedule for the district and submitted it to the board of commissioners last month.
Before the district staff presented their proposed rate schedule on Thursday, Jungers made a prediction.
"I think they will come up with a rate schedule that will put all the local ISPs out of business," he said.
Both Cain and Jungers filed petitions with the Washington Utilities and Transportation Commission, alleging the district breached state law by providing unreasonably discriminatory rates to providers.
PUD staff analyzed market data to draft the new rate schedule, said Jim Bunch, a senior financial analyst for the district.
"We looked at all the utilities around the state for services that matched as closely as we could come up with the services we're offering," he said.
PUD Treasurer-Controller Nick Gerde said the estimated financial result of the proposed rate schedule would be an annual revenue increase of nearly $1 million. That revenue increase would drop the estimated net cash deficit for telecommunications from about $3.7 million to $2.7 million.
Commissioner Vera Claussen approves of the proposed rate schedule presented by the district, but said understanding some telecommunications issues can be difficult.
"I have to rely on staff," she said.
The district began working on a new telecommunications rate schedule after the board of commissioners received a number of comments recommending changes, said Claussen.
Commissioner Tom Flint said he is extremely unhappy with the proposed rate schedule.
"It treated all users the same, which is discriminatory in my mind," said Flint.
He believes end-users should get the greatest benefit from the telecommunications system. Under the proposed rate schedule, commercial and business users benefit disproportionately, he said.