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Minutes of Utilities Task Force, 04/07/2016

AGENDA: Utilities Task Force

RECEIVED 04/14/2016 2:47pm

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Attending Leon Karvelis, Don Cullman, Wes Higgins

Leon called the meeting to order at 2.03 pm

Motion to approve the minutes from the March 3rd meeting. Cullman, Higgins  approved 3-0

Donna Hamzy, Manager of Governmental Relations at Frontier Communications began her presentation by distributing their slide deck “Fiber to Home” dated December 2015. She explained that the company’s first proposal was made in response to a request by New Haven last year for a plan to wire the city with fiber optic cable to facilitate high speed internet service. Macquarie’s offer was selected but as it became apparent that the plan contained public funding Frontier resubmitted a proposal based upon a public/private funding partnership design.  To date, no municipality has entered into an agreement to build a system.

Frontier is a leading provider of communication services in the US. Based in Connecticut, it provides services to over 28 states and employs more than 17,000 workers. It owns roughly half of the telephone poles along the roadways in Redding. The Frontier fiber optic cable is carried on this pole network. The existing base now in place roughly follows the State Road(s) 53, 58, 107 and Umpawaug Road. Their plan if they are selected as the fiber optic service provider is to expand that coverage along their pole networks, a buildout that would take about 3 years. Homeowners or businesses would connect to the poles in a manner similar to the method they now receive phone service- either buries or via overhead wires.

As a result of its existing infrastructure Frontier believes it can provide municipalities with the most competitive pricing option. Their proposal contemplates a contractual agreement between Frontier and the Town of Redding to provide high speed fiber optic service for 15 years. The Town would collect fees from homeowners (or businesses) to cover the cost of the service. The method of collection would be up to the town, however a preference has been indicated to include the fee in the tax bill to ensure tax deductibility for the homeowner. The fee has not been established- it would result from a negotiation but an indication of the amount was given as $20 per residence per month for the first five years, stepping down in year six to a lower amount  until the 15th year. The Town would collect, in the example provided, $20 per home for 3,000 homes per month to total $60,000. The Town would pay Frontier $720,000 per year for five years, then a lower amount for the remaining 10 years. Frontier’s goal is to achieve a sufficient amortized return of its capital investments in the infrastructure for universal access in a manner similar to a water or sewer utility

The homeowner or business would receive installation support to cover some of the cost of initial connection. The monthly fee would be credited to the monthly Frontier phone and data charges the family pays. The Company expects that the 18 megabyte standard package would cost about 1/2 of the typical internet service of similar speed now available. The system would be an open system, meaning that other ISP’s would be available to consumers so long as they paid Frontier a use fee for the network.

Leon shared a note he received from Representative John Shaban.  In response to a recent meeting they had to discuss expanding gas service to Georgetown, Rep Shaban contacted Eversource to ask them to explain their decision to not expand their service line into the town. The company called back and promised to recalculate their break-even analysis and report those results to Rep Shaban’s office.

In preparation for drafting the Task Force report to the Town Board of Selectmen, Leon assigned Don and Henry to outline the gas service section and assigned Susan and Wes responsibility to draft the section covering high speed fiber optic internet service.

Motion was made to adjourn at 3 pm. Cullman, Higgins  3-0

Submitted by Wes Higgins