Why WiredWest

 

 

http://www.newmarlboroughfiber.org/why-wiredwest.html

 

WHAT IS WIREDWEST
WiredWest is . . .
a municipal cooperative with 45 member towns in the four western-most counties in the Commonwealth. Governed by a Board of Directors made up of representatives for each member town, elected by their town’s Select Boards, it is a regional community-owned network. 

WiredWest is NOT a private for-profit company. It hasn't come to Western Mass from somewhere else. It started nearly six years ago with a group of volunteers from the area. 

Governance

The member towns govern the cooperative through the representatives each town designates as Board Members to WiredWest. I am New Marlborough’s representative to the Board of Directors. My alternate is Gino Furio. As representatives, we are looking out for New Marlborough’s interests. In addition, three of the members of the WiredWest Advisory Council are from New Marlborough. (You can read up on all the details of WiredWest’s governance structure in the Learn More menu tab.

A Cooperative of Municipal Lighting Plant Towns

WiredWest was incorporated in 2011 as a Municipal Lighting Plant Cooperative under Massachusetts General Law 164, Section 47C.
Becoming a WiredWest member town involved New Marlborough undergoing a lengthy process to first become a Municipal Lighting Plant. This necessitated conducting Town Meeting votes – passed by 2/3 majority of registered voters – at two separate Town Meetings within a 13 month period. Then the Select Board voted to join the Cooperative, completed extensive paperwork, and paid a $1,000 membership fee to become part of the Municipal Lighting Plant Cooperative, WiredWest.

WiredWest is An All-Volunteer Organization
The citizens in WiredWest's member towns who have been working to bring fiber service to our homes and businesses are all volunteers. No one is paid for the hundreds, and in some cases, thousands of hours they have each invested over the past four years to move this project toward its goals. The project would not be where it is today were it not for this level of commitment.
Mission

WiredWest’s mission is planning, constructing and operating a regional community-owned, universal, fiber-to-the-home network in its member towns. The planning phase is nearly complete. Construction of the network will begin in early 2016. Service is projected to start in 2018.

How The Coop becomes an ISP as it Moves Forward
WiredWest’s Board of Directors bring experience in project management, finance, law, network technology, finance, marketing, sales and community organizing. This deep-skilled group is the Coop's secret sauce.
As the project moves forward to construction and operation of the network, this group, WiredWest’s Board of Directors and Executive Committee, will be hiring a CEO and other staff from the telecommunications industry to fulfill operational, financial, marketing, customer service and network maintenance roles. Some of these activities may be provided by third party contractors. 

Strength in Numbers
New Marlborough, with its 1020 households, is fairly large for a Western Mass town. Yet, compared to WiredWest, we are small. WiredWest member towns span four counties and represent about 30,000 households. Within the borders of the 31 towns that are eligible to participate in the fiber build are 20,000 households. Click here to see a map of the WiredWest towns.

The scale of the membership gives the Coop a remarkably broad range of real world skills to draw upon to accomplish its mission. 

Some Impressive Stats
Since February, over 7,000 households have pre-subscribed for service, paying in $49 each. 19 of 31 towns have surpassed the 40% pre-subscription sign up goal; 3 more are well above 95% to goal. 24 of the 31 eligible towns have passed their bond authorization votes, authorizing $38 million. 

The WiredWest Business Plan and Financial Model
WiredWest has worked from the outset with complete transparency. The Coop's business plan and financial model have been developed over a period of at least  two years. Both the Financial Model and Business plan have been closely studied and thoroughly vetted by industry experts and a number of operating municipal   fiber networks around the country. The MBI, MBI consultants' have the Financial Model under review since mid 2014. During this time neither the MBI or its paid consultants have challenged the accuracy of the model. The Business Plan was submitted to the MBI and simultaneously made public in June 2015. In the 6 months since then the MBI expressed no concern to that document either. Then, on December 3, the MBI issued a public statement broadly critical of the entire WiredWest plan. Click here to go to the menu heading: "What's MBI's Problem?" to learn WiredWest's response.

 To review the draft Business Plan document and learn about the process WiredWest employed in developing the Financial Model. You’ll find both under the heading: "About the WiredWest Business Plan and Financial Model."

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HOW A REGIONAL COOPERATIVE DIFFERS FROM A SINGLE TOWN NETWORK
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Small towns in western Massachusetts increasingly are recognizing the need to regionalize the delivery of a variety of existing public services. This concept has compelling favorable arguments when it comes to providing modern telecommunications services. Rather than restricting the design, construction and operation of the network to a single township – a political construct created in the 18th century – better to design-in the many advantages larger scale brings at the project at the outset.
HOW A REGIONAL COOPERATIVE DIFFERS FROM A SINGLE TOWN NETWORK
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The Leverett Model
What has taken place in Leverett is a good place to start. They're network is up and running. Has been for 6 months,. WiredWest salutes what Leverett has done
to pioneer a single town fiber network—the first in our state. We in no way fault their decision.  But before you decide following that lead is best for New Marlborough you really need to look closer, dig deeper. What is great for Leverett, say, or Alford, may not work so well for other towns.  It's instructive to look at the demographics. 


Small towns in western Massachusetts increasingly are recognizing the need to regionalize the delivery of a variety of existing public services. This concept has compelling favorable arguments when it comes to providing modern telecommunications services. Rather than restricting the design, construction and operation of the network to a single township – a political construct created in the 18th century – better to design-in the many advantages larger scale brings at the project at the outset.

How scale works as an advantage
Were New Marlborough to operate its own service, the one-town network would have a maximum of 1039 customers (provided 100% of all households and businesses subscribed). The comparable number for the WiredWest network is about 20,000 households. That’s what's meant by scale. More realistically, think in terms of 500-700 customers if NewMarlborough were to go it alone versus 10,000 to 14,000 for WiredWest. Here are some things that the vastly larger customer base allows.

• Economies of scale for service provision (acquiring bandwidth, TV programming, etc.)
• More flexibility in pricing and packaging of services over larger customer base
• Greater ability to introduce new services (e.g., telehealth) over larger customer base
• Reduction of demographic disparities between towns, such as high second-home ownership
• Greater negotiating leverage with contractors and suppliers
• Benefits of financial success returned to towns, not retained by ISP serving a single town
• Shared risk of financial underperformance and greater resources for responding
• Shared ability to respond to operating failures and emergencies
• Economies of scale through regionalized design and construction
• Greater ability to exercise oversight of network design, construction and spending
• Economies of scale for operation and maintenance
• Greater flexibility to provide redundancy in connecting the network to the internet
• Higher uptime and network resiliency (through interconnected equipment huts)
• Greater ability to upgrade network as technology evolves and user needs grow
• Greater ability to attract professional managers (versus town administrator or Select Board)
• Wider range of input and oversight from diverse members on WiredWest Board of Directors
• More sale-able asset serving 10,000+ customers (a single-town network may actually be unsellable

MBI working with WiredWest to resolve issues

The Board of Directors of WiredWest, at its meeting on December 19th, voted unanimously to appoint a select group of representatives from its member towns to negotiate with the Massachusetts Broadband Institute (MBI) to resolve differences between the organizations’ plans for last-mile broadband deployment in WiredWest towns.

MBI issued a statement on December 1^st saying it would deny funding to WiredWest for the project to bring high-speed internet to people in western Massachusetts currently lacking such service. WiredWest responded with a detailed rebuttal, drawing on the organization’s comprehensive plans to bring broadband to its members. Responding to the controversy caused by these actions, the Board of Directors of MBI directed its staff to work with WiredWest to seek to bridge those differences, and then for the two organizations to come back before the Board in a joint presentation.

Last week, several WiredWest Executive Committee members participated in a meeting hosted by MBI in Westborough, and it was agreed that the two organizations would address the specific issues of contention in breakout committees on finance and governance, with meetings in the very near future. WiredWest is also asking for a committee on technology, to work closely with MBI on network design, to ensure operational efficiencies are taken into account.

Monica Webb, Chair of WiredWest, said: “I am confident that with genuine, open-minded collaboration, the two groups can resolve our differences in last-mile plans, and get the process of bringing desperately-needed broadband to the unserved back on track. We are all vested in the expeditious achievement of that goal.”

FOR MORE INFO GO TO:

http://www.shutesbury.org/broadband

THE MBI MISSION AS ESTABLISHED BY LAW

There has been a lot of discussion about MBI funding. How do we ensure that we qualify for these funds. Fortunately when public monies are involved the governing authorities must clearly spell out in writing the rules that govern the disbursement of these public funds. If these rules are not followed to the letter these funds cannot be released. What follows is the text of chapter 231of the acts of 2008 which is the law establishing the MBI and the rules regarding the distribution of MBI funds. The mission and the spirit of the law is outlined in section 1.

AN ACT ESTABLISHING AND FUNDING
THE MASSACHUSETTS BROADBAND INSTITUTE.

Whereas, The deferred operation of this act would tend to defeat its purpose, which is forthwith to establish and fund the Massachusetts Broadband Institute, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same as follows:

SECTION 1. To provide for a capital outlay program to achieve the deployment of affordable and ubiquitous broadband access for every citizen of the commonwealth, the sums set forth in section 2, for the several purposes and subject to the conditions specified in this act, are hereby made available, subject to the laws regulating the disbursement of public funds. 

SECTION 2.

EXECUTIVE OFFICE FOR ADMINISTRATION AND FINANCE

1599-7060 For a reserve to provide funds to the Massachusetts Broadband Incentive Fund established by section 6C of chapter 40J of the General Laws...................................................... $40,000,000

SECTION 3. Section 3 of chapter 23A of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by striking out, in line 24, the words “wireless broadband development council” and inserting in place thereof the following words:- Massachusetts Broadband Institute.

SECTION 4. Said section 3 of said chapter 23A, as so appearing, is hereby further amended by striking out, in lines 62 and 63, the words “wireless broadband development council, established pursuant to section 6A” and inserting in place thereof the following words:- Massachusetts Broadband Institute, established by section 6B.

SECTION 5. Said section 3 of said chapter 23A, as so appearing, is hereby further amended by striking out, in lines 87 and 88, the words “wireless broadband development council established pursuant to section 6A” and inserting in place thereof the following words:- Massachusetts Broadband Institute, established by section 6B.

SECTION 6. Chapter 40J of the General Laws is hereby amended by striking out sections 6B and 6C, as so appearing, and inserting in place thereof the following 2 sections:-

Section 6B. (a) As used in this section and in section 6C, the following words shall, unless the context clearly requires otherwise, have the following meanings:-

“Board”, the board of the Massachusetts Broadband Institute established by subsection (c).
“Broadband”, high-speed internet access, including wireless internet access, and as may be further defined by the board.
“Fund”, the Massachusetts Broadband Incentive Fund established by section 6C.
“Institute”, the Massachusetts Broadband Institute established by subsection (b).

(b) The corporation shall establish an institute for investment in broadband infrastructure in the commonwealth, to be known as the Massachusetts Broadband Institute. The executive director of the corporation, subject to the approval of the board, shall appoint a qualified individual as director to manage the affairs of the institute. The purpose of the institute shall be to achieve the deployment of affordable and ubiquitous broadband access across the commonwealth. The objectives of the institute shall include: (i) assessing and improving broadband access conditions in communities that have no access or have limited or insufficient access to broadband; (ii) promoting robust broadband access for essential state and local governmental services including, without limitation, public safety, health and education; (iii) promoting increased availability of, and competition for, broadband access and related services; and (iv) creating conditions that will encourage economic competitiveness and growth. The first priority of the institute shall be to assess and improve conditions in the commonwealth’s communities that have no broadband access.

(c) The institute shall be governed and its corporate powers exercised by a board of directors, which shall consist of the following 9 members: the secretary of administration and finance or his designee; the secretary of housing and economic development or his designee; the commissioner of telecommunications and cable or his designee; the executive director of the corporation or his designee; and the chairman of the governing board of the John Adams Innovation Institute or his designee; and 4 members to be appointed by the governor, all of whom shall have knowledge and experience in 1 or more of the following areas: telecommunications, broadband infrastructure, public-private partnership development, information technology or other fields of experience consistent with the mission of the institute. The governor shall, from time to time, designate 1 member to chair the board. Each member appointed by the governor shall serve a term of 4 years and thereafter until his successor is appointed. Any person appointed to fill a vacancy on the board shall be appointed in a like manner and shall serve for only the unexpired term of such member. Any appointed member shall be eligible for reappointment. An appointed member may be removed by the governor for cause. Five members of the board shall constitute a quorum, and the affirmative vote of a majority of the members present and eligible to vote at a meeting shall be necessary for any action to be taken by the board. The members shall serve without compensation, but each member shall be entitled to reimbursement for actual and necessary expenses incurred in the performance of his official duties. The board shall meet at least 4 times annually.

(d) The board shall leverage private sector and federal investment by financing the construction and acquisition of broadband infrastructure to promote the development of broadband access. This broadband infrastructure shall include, but not be limited to, conduit, fiber and towers. Any equipment or other property financed by the institute shall be owned by the corporation, the commonwealth or 1 or more other public entities, but may be leased or licensed by the institute, for a fee or otherwise, for use by nonprofit or for-profit private-sector entities. Any such transaction shall constitute a transaction with the commonwealth for the purpose of chapter 30B. The lessee or licensee shall pay any lease or license fees to the corporation, which shall credit them to the fund. The institute may provide and pay for advisory services and technical assistance as may be necessary or desired to carry out its purposes.
The board may work in collaboration with the corporation and other quasi-public and nonprofit entities and state agencies, and may provide advisory assistance to local entities, local authorities, public bodies and private corporations for the purposes of maximizing opportunities for the expansion of broadband access in the commonwealth and fostering innovative approaches to broadband access in the commonwealth.

(e) The board shall collect information from reasonably available sources including, but not limited to: municipalities and other public entities and agencies of the commonwealth, local and regional nonprofit entities and telecommunications and broadband service providers to develop and maintain an inventory of: (i) locations where telecommunications and broadband services are not available in the commonwealth; (ii) locations where telecommunications and broadband infrastructure is available or is likely to be available to support the provision of services to unserved and underserved areas; (iii) locations where new infrastructure may be necessary to support the provision of services to unserved and underserved areas; (iv) the quality of such services, including, but not limited to, speed of data transmission and cost of such services; and (v) any other relevant information as the board may deem necessary.

(f) The board shall establish a detailed long-term plan for the operation of the institute and the administration of the fund and shall consult with the joint committee on telecommunications, utilities and energy and the joint committee on economic development and emerging technologies on the plan. The plan, and any amendments thereto, shall be subject to the approval of the secretary of housing and economic development and the secretary of administration and finance and shall be filed with the clerks of the house of representatives and the senate who shall forward the same to the house and senate committees on ways and means, the joint committee on telecommunications, utilities and energy and the joint committee on economic development and emerging technologies.

(g) The board shall annually adopt an operating plan governing disbursements from the fund and, to the extent the plan provides for disbursement of appropriations or other moneys authorized by the general court, the plan shall be subject to the approval of the secretary of housing and economic development and the secretary of administration and finance. The board shall file the plan, and any amendments thereto, with the clerks of the house of representatives and the senate who shall forward the same to the house and senate committees on ways and means, the joint committee on telecommunications, utilities and energy and the joint committee on economic development and emerging technologies.

(h) The board shall promulgate rules and regulations for the administration and enforcement of this section and section 6C.

(i) The board shall review and recommend changes in laws, rules, programs and policies of the commonwealth and its agencies and subdivisions to further financing, infrastructure and development for broadband access in the commonwealth.

(j) The board shall prepare, publish and distribute, with or without charge, as the institute may determine, any studies, reports and bulletins and other material as the institute deems appropriate.

(k) The institute shall file an annual report of its activities with the governor and the clerks of the house of representatives and the senate who shall forward the same to the joint committee on telecommunications, utilities and energy, the joint committee on economic development and emerging technologies, and the house and senate committees on ways and means.

(l) Actions of the board may take effect immediately and notice thereof shall be published and posted. Meetings of the board shall be subject to section 11A1/2 of chapter 30A. Records pertaining to the activities of the institute shall be subject to section 10 of chapter 66, unless exempted under subsection (h) of section 12. The operations of the institute shall be subject to chapters 268A and 268B; provided, however, that the members of the board shall be considered directors for the purposes of the fourth, fifth and seventh paragraphs of section 3.

(m) Sections 38A1/2 to 38O, inclusive, of chapter 7, section 39M of chapter 30, subject to the provisions of subsection (c) of section 4A and sections 44A to 44J, inclusive, of chapter 149 shall apply to the operations of the institute.

Section 6C. The corporation shall establish a fund to be known as the Massachusetts Broadband Incentive Fund. The corporation shall hold the fund separate and apart from its other funds, to finance the activities of the institute. The corporation shall credit to the fund any appropriations, bond proceeds or other moneys authorized by the general court and specifically designated to be credited to the fund, and any other moneys legally available to the corporation which the board of the corporation may determine to deposit in the fund.

SECTION 7. Notwithstanding any general or special law to the contrary, to meet the expenditures necessary to carry out section 2, the state treasurer shall, upon request of the governor, issue and sell bonds of the commonwealth in an amount to be specified by the governor from time to time, but not exceeding, in the aggregate, $40,000,000. All bonds issued by the commonwealth as aforesaid shall be designated on their face, Massachusetts Broadband Incentive Fund Loan Act of 2008, and shall be issued for a maximum term of years, not exceeding 30 years, as the governor may recommend to the general court pursuant to section 3 of Article LXII of the Amendments to the Constitution. All such bonds shall be payable not later than June 30, 2043. No authorization shall be expended unless expressly authorized by the secretary of administration and finance. All interest and payments on account of principal of such obligations shall be payable from the General Fund. Bonds issued under the authority of this section shall be general obligations of the commonwealth.

SECTION 8. Notwithstanding any general or special law to the contrary, in making the initial appointments pursuant to subsection (c) of section 6B of chapter 40J of the General Laws, the governor shall appoint 1 member to serve for a term of 1 year, 1 member to serve for a term of 2 years, 1 member to serve for a term of 3 years and 1 member to serve for a term of 4 years.

SECTION 9. Notwithstanding any general or special law to the contrary, not less than 10 days after the effective date of this act, the Massachusetts Technology Park Corporation, established by section 3 of chapter 40J of the General Laws, shall transfer the balance of the Wireless and Broadband Development Fund established by section 6C of chapter 40J of the General Laws to the Massachusetts Broadband Incentive Fund, established by said section 6C.

Approved August 4, 2008

Wired West Rebuttal to MBI

WiredWest Rebuttal to the Statement by the Massachusetts Broadband Institute of December 1, 2015
MBI said: “The MBI is committed to working with you to develop a sustainable plan for governance and operation of a regional network, and therefore will be prepared to partner with towns on new pathways to successfully expand broadband service as needed.”
WW replies: The only way that MBI can work and partner with the towns is on the basis of respect for the towns and WiredWest. “New pathways” is merely a code word for detouring around WiredWest. That is not the route the towns have chosen to take. By releasing its statement of December 1, MBI has sewn confusion in the towns, thrown the project into chaos, and subjected it to further delays. This will only prolong the frustration of people in western Mass. at their lack of broadband. MBI must become part of the solution, not part of the problem.
MBI: “The Massachusetts Broadband Institute at Mass Tech Collaborative (MBI) is committed to partnering with towns to extend broadband service to residents and businesses. WiredWest was an early supporter of a regional solution and has sought to complement MBI’s efforts to promote aggregation of towns and to educate them about the benefits of a common, regional approach. Those efforts have been successful in instilling early and sustained energy and providing information about many of the issues involved with building and operating a fiber network for the citizens of western Massachusetts.”
WW: For more than four years, the WiredWest cooperative has been working with its 44 member towns to bring “last mile” high-speed internet service to the people in western Mass., long before MBI became involved in such an effort. MBI is now “partnering” with the towns only to the extent that towns do so on MBI’s terms.
MBI: “More recently, WiredWest has extended beyond these educational and outreach efforts to develop and propose a plan and agreement under which WiredWest would own and operate the network on behalf of the towns.”
WW: Since its formation in 2011, the Bylaws of WiredWest have stated that the purpose of the cooperative was “planning, building and operating a regional fiber-optic network.” That is why towns joined WiredWest. It is misleading to imply that WiredWest has changed its mission, or that is an entity separate from the towns which would operate the network on their behalf. It is a cooperative of the towns, by the towns and for the towns. WiredWest is nothing but the towns. It is governed by a Board of Directors, representing each of the member towns, which has supported and continues to support this purpose.
MBI: “It [WiredWest] has informed towns that it will be seeking the towns’ execution of the proposed agreement in early January. We are writing to provide you an update on our ongoing review of the WiredWest regional fiber network proposal, in order to support your upcoming decision-making around signing the proposed Operating Agreement.”
WW: Numerous drafts of the Agreement have been subject to extensive review and input from the Board, town officials and counsels, town broadband committees and others. The board unanimously approved the proposed Operating Agreement. MBI is not acting to “support” the towns’ decision-making, but to thwart it.
MBI: “The MBI has been reviewing the WiredWest operating agreement and business plan, which propose a new, independent, regional, municipal cooperative in the telecommunications business. While WiredWest continues to revise both the operating agreement and business plan, it is important for the MBI to provide local officials with preliminary feedback now based upon our review.”
WW: WiredWest continues to adjust our governance and business plan, by design, in response to multi-year discussions and feedback from towns and industry experts. The changes embodied in the Operating Agreement change the form of the existing WiredWest cooperative from a corporation, formed according to state law governing such coops, to a Limited Liability Company. Operating as an LLC would not only give the towns continued control of the coop, but actual ownership of it in shares proportional to their investment in the network.
MBI: “The MBI believes that the current draft WiredWest operating agreement is not compatible with the best interests of the Commonwealth, the towns, or their residents. The operating agreement coupled with the business plan would require substantial, in some ways fundamental, revision in order to succeed as a reliable framework for the startup and operation of broadband service in the region.”
WW: It is not up to MBI, a bureaucracy in eastern Massachusetts, to decide what is in the best interests of the towns and their residents in western Massachusetts. It is the responsibility of the towns to determine the course that is in our best interests. The MBI’s letter follows a long series of actions that are not in the town’s best interest. The revisions MBI seeks are for the purpose of furthering its attempt to control the last mile project, despite the fact that the towns are providing nearly two-thirds of the funding, while threatening to withhold funding from the organization which the towns themselves created.
MBI: “Operating Agreement Review: The WiredWest Operating Agreement includes basic elements that contradict MBI’s Last Mile Broadband Policy as passed by its boards on July 30, 2015. The program policy was established to mitigate financial and operational risk to towns and taxpayers, and ensure that any project receiving state and local funds had a pathway to sustainability.”
WW: The Director of MBI told representatives of WiredWest that they would have input into the Policy. They did not. WiredWest believes that elements of the Policy increase, rather than mitigate, the risk to towns and their taxpayers. The assessment of such risk must ultimately be that of the towns who are undertaking an unprecedented financial commitment to the project, and not a dictate of the state. The MBI claims that the WiredWest business model is not sustainable, but provides absolutely no evidence to support its claim. On the contrary, the WiredWest model has been fully vetted by many experts including a nationally recognized network consultant.
MBI: “For example, the WiredWest Operating Model requires towns/MLPs to transfer ownership of the network to WiredWest in perpetuity, while retaining ultimate responsibility for the local debt obligation for construction of the network. Towns/MLPs are required to maintain membership in WiredWest for a minimum of 10 years, and if the towns leave WiredWest they will lose all rights to the broadband network in their towns with no assurance of full repayment of their municipal debt.”
WW: The towns and their MLPs (Municipal Light Plants) are not transfering ownership of the network to WiredWest. The towns are choosing to jointly own the network and WiredWest serves as the mechanism to manage it. WiredWest is committed to repaying the debts of its Members, which no other provider of internet service is proposing to do. When a town withdraws from WiredWest, after a sufficient period of time to enable it to achieve financial stability, the Operating Agreement stipulates that it it will be reimbursed in full for its outstanding debt for the project.
The 10-year membership requirement in the Operating Agreement includes four years of construction and six years of operation, which is necessary to build reserves to repay any town that choose to leave the co-op.
MBI: “In addition, the Operating Agreement contains no clear means of resolving unbudgeted financial shortfalls or obligations such as may be expected in the start-up of a challenging business. Such shortfalls could lead to sale or mortgaging of the network without any return of funds or control to the towns.”
WW: This is false. Under the Agreement, the members of WiredWest are fully empowered to address any financial difficulties. The net proceeds from sale of the network, the necessity of which will be decided by the members, will be returned to the towns. And of course, it goes without saying that if the network were sold, the towns would no longer control it.
MBI: “Some practical concerns from the operating agreement review include:

• Towns lose direct managerial and policy control over their network when substantial unknowns exist that may cause towns to want or need to modify plans;
• Towns lose flexibility to respond to the interests of their respective residents in the future, despite any business conditions or market factors that may arise; and
• The proposed structure of WiredWest creates unnecessary financial and operating risks for the towns.”

WW: The towns’ ownership and control of the regional network mitigates, not creates, risks. Again, the towns own and control the network, and are empowered to respond to any such concerns through their representatives on the Board of Directors.
MBI: “Business Plan Review: The MBI has also engaged many industry experts, led by a consultant team from Wipro, to evaluate elements of WiredWest’s business plan, and to explore and further test various operating models. We will be providing more information in the weeks ahead, and believe WiredWest continues to adjust certain elements of the plan, but preliminary analysis demonstrates that the current draft plan understates challenges and expenses and overstates the amount and timing of anticipated revenues.”
WW: It is disappointing that in its rush to stop towns from signing the Operating Agreement, MBI would hint at the conclusions of a report, by a company having little experience with municipal broadband projects, that has not been finalized nor made available for examination. On the other hand, WiredWest just released a report by CTC, a leading communications consultancy which has also consulted to MBI. It concludes: “The WiredWest financial model has been well designed and is a reasonable portrayal of its business.” The full report is available at wiredwest.net/2015/12/02/ctc.
MBI: “Some practical concerns from the business plan review include:

• WiredWest has developed a model which starts up and runs the business independently, rather than relying on professional or technical partners who can bring organizational experience in the business, which is risky given the challenges associated with operation of rural fiber-to-the-home networks;
• WiredWest plans a fully-insourced model of administration, staffing and services, which is expensive and very challenging to sustain. MBI’s review indicates a sustainable approach must include contracting out many administrative, service and maintenance operations”

WW: These statements are simply not true. The aim of the WiredWest business model is to minimize the costs to towns not maximize profits to private industry. The WiredWest Board will determine who WiredWest will or will not partner with, and which functions should be performed inhouse versus outsourced, on the basis of their financial and operating costs and benefits. The main business of MBI’s consultant Wipro is outsourcing, so it is not surprising, if not a conflict of interest, that they would advocate that WiredWest do so.
MBI: “WiredWest’s plan to repay debt service to the towns will be difficult or impossible to achieve at reliable subscription rates (including WiredWest’s proposed ranges from 40 percent to 55 percent subscribers). Towns should assume that they will have to repay most if not all of the debt they borrow.”
WW: The CTC report states that the take rate of 55% required for WiredWest to repay town debt service is feasible, citing municipal broadband projects that exceed 60% take rates. In fact, as a result of WiredWest’s presubscription campaign, nearly 40% of all households in its service area have already signed up for service and made a $49 deposit two or more years before they will be connected. That is already two-thirds toward 60%, which WiredWest is likely to surpass by time service is available to customers.
 MBI: “Our obligation to the towns, policymakers, and taxpayers investing state and local funds is to support sustainable and successful approaches which will expand broadband service for the region. Because of overall concerns with project operations and sustainability, the MBI will not authorize expenditure of state funds for a project with core elements as proposed in this draft operating agreement and business plan. Therefore, the MBI recommends towns not sign the WiredWest operating agreement as currently planned for January 9, 2016.”
WW: MBI has an obligation to towns and their taxpayers to respect their opinions and decisions, which regretably MBI’s actions have shown that it does not. Nor are its concerns justifiable, as demonstrated above. In fact, MBI’s desire to control the project and minimize the ability of towns to oversee its expenditure of their funds, despite the towns providing most of the money, is the reason MBI is stepping in at this late date to block the implementation of the Operating Agreement. Refusing to fund the solution chosen by the towns is bureaucratic blackmail.
 MBI: “Moving Forward: This modeling and analysis also convinces MBI that there are viable approaches to building and operating broadband service in the region. As Leverett’s success shows, a single-town approach to broadband service can work. However, MBI believes that a regional approach to policy making, procurement and shared services is the preferred pathway, and that there are ways to make a regional model work.”
WW: Leverett is a unique case, because of the demographics and location of the town. Individual, single-town networks are higher cost and higher risk. WiredWest agrees with MBI that a regional approach is preferable. Our business plan for a regional network has been more painstakingly developed—substantially based on work done by consultants to MBI—and more exhaustively reviewed than any other so-called “viable approaches” which thus far MBI has not revealed.
MBI: “If WiredWest can demonstrate flexibility to align with the towns’ interests and the state’s policies, we can all continue to work together on a substantial, municipally-owned regional project.”
WW: WiredWest is prepared to continue to work together with MBI, provided that MBI demonstrate flexibility in recognizing the legitimacy of WiredWest as the grassroots voice of its member towns, and the decision of the people in those member towns as to how best to use their funds for a regional solution.

Other Information Sources

There has been a lot of conversation concerning WiredWest and the other broadband choices that are open to Egremont. Because many of the readers of this blog may not be followers of these other sites I'm going to post discussions and comments from these sites. What follows is a thread from Egremont Neighbors, a site graciously hosted by Marj Wexler. To read the entire thread follow the link:  https://groups.google.com/forum/?utm_source=digest&utm_medium=email#!topic/egremontneighbors/ZarKYqfBk14

Eric Swanson wrote:

The letter from MBI refers to a consulting firm for some of its concerns about Wired West. The first, and to me most important, concerns are based only on Wired West's proposals regarding ownership and control of a assets paid for by the town of Egremont's taxpayers. Nothing that any Wired West official or representative has ever written or said has addressed those concerns satisfactorily.

There are a number of Wired West True Believers who accept the logic of Wired West's proposal without any real criticism. They are demonizing MBI for doing part of its job. 

The question of how best to provide fiber broadband service to Egremont requires serious scrutiny and evaluation. Some of this forum's posts are more reflective of a religious war than a business decision.

Eric

 

To which Jonathan Taylor responded:

Eric,
The issue of ownership is a smoke screen, hiding the real issue of the comparative costs to the towns and individual subscribers.

It seems strange that you find the biggest concern to be the ownership issue, because both of the other corporations vying to build our network also plan to own the network,  NOT the town.

On the surface these seem like great alternatives to WiredWest except when you look at their pricing structures. Fiber Connect wants to collect a $250 connection or start up fee and will be charging nearly $100 per month for the entry level of internet access, and will offer no TV as part of their broadband service. Matrix wants to collect a $500 start up fee and will likewise charge about $100 per month and will offer Sling TV which requires a set top box like the Apple TV box which allows anyone with an internet connection to stream TV shows they offer like Apple TV does. WiredWest wants a $100 start up fee plus the $49 subscription fee, will charge $49 per month for their entry level internet and will have an online TV package much like we get from Direct TV or Dish TV. Just not the 900 useless channels. The pricing for that is TBD based on a planned survey of what people want to watch. All three of the companies will offer online telephone service for about $20 per month. By my calculations each subscriber will be spending almost $600 more per year for their internet if we do not work with WiredWest.

Anyone who understands municipal networks knows the participant towns own a percentage of the network not their own portion of it.

Perhaps, the last, but not the least important aspect of WiredWest's proposal is that after a number of years, when the network is up and running and the towns' debts are being paid by WiredWest, the excess profits can be returned to the towns. This has been belittled consistently by you, Eric, but the new report by CTC Technology and Energy, 2 links to which have been posted here, indicates that WiredWest's business plan is well reasoned and in their opinion is workable. CTC is a prominent technology consulting firm in Maryland. From their website-

CTC Technology & Energy is an INDEPENDENT communications and IT engineering consulting firm with more than 30 years of experience. We work at the highest levels on cutting-edge communications networking projects for public sector and non-profit clients throughout the U.S. 
their client list includes- the city of Boston, the Internal Revenue Service, the State of Kansas, New York City and  hundreds more (see their website for complete listings). They are known for their neutrality and conservative fiscal approach - as the client list would support. Therefore, the your personal issue of this company being paid for its services by WiredWest is yet another smoke screen,

Why Eric you have chosen to publicly belittle WiredWest and the people who have worked so hard to make an affordable network a reality, is truly a mystery to me?  Why this campaign of misinformation and misdirection? And, why in a time of such religious turmoil, would you characterize the democratic process of discussion regarding WiredWest  as a "religious war?

My observation:

One thing not really mentioned is the state and federal monies being given to anyone who builds the network. The only way we can use these funds and still retain ownership of the assets by hiring a company to build the network for us or having an ownership stake in WiredWest.

If we cede our portion of the state and federal funds to the private companies to build out their company's assets we forfeit our ownership stake in the network. Then the only way to regain ownership is to buy it back. This would be tantamount to the state and federal government using tax dollars as venture capital to fund a private for profit company.