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RBC | Success comes with its own troubles. The county’s broadband project has exceeded expected demand—more customers than anticipated have signed up to receive fiber internet. Colorado Fiber Community (CFC), the company contracted to connect individual addresses, has maxed out their $1.5 million budget, and without an infusion of capital, the rate at which homes are connected to the network will drop to 10-15 per month bundled over the course of several months. In August 2017, more than 100 addresses received fiber connection. Seventy-three percent of Rangely customers are connected, and 61 percent of Meeker customers.
The county was anticipating a 45 percent “take rate” of local subscribers, or 2,000 addresses, but the take rate for Rio Blanco County is closer to 60 percent and is expected to continue to rise, according to CFC’s Paul Recanzone.
“We’ve gone well beyond what we anticipated,” Recanzone said, adding that in his 15 years experience with community broadband projects he has never seen such a high take rate.
At the outset, the county established an accrual contract with CFC that set aside $1.5 million so that if CFC decided to sell out or the county fired them, ownership of the infrastructure would remain in the county’s hands, not go to an outside entity. That contract established security for CFC to obtain a loan with Mountain Valley Bank.
Now that amount has been met, CFC has three options: find a private investor to fund the rest of the money needed to complete the connections, seek an increase in the amount of the “backstop” $1.5 million accrual account with the county and renegotiate the loan with MVB, or request an additional early payout from the county on the $1.5 million that will be paid back “organically” as new customers are added to the network. CFC and the county have already exercised the early payout option once this year.
“We first hit that barrier in June,” said RBC IT Director Blake Mobley. Those who are already in the network will not see a change in service. The change will be in how quickly new customers can be added to the network. “They (Local Access Internet and Cimarron) have funds for another two to six weeks.”
Recanzone said they are actively seeking outside investors so they can continue expanding the network’s reach to everyone who has already signed up. Each “drop” to a home costs approximately $1,100 per subscriber, below the average national rate of $1,500.
RBC Commissioner Si Woodruff expressed concerns Monday during a workshop that the county needs to live up to the promises made to the public.
“We promised the people we’d build a system,” Woodruff said Tuesday via telephone. “I think the commissioners made an agreement and we need to put a price tag on it and get it done.”
Reduced property tax valuations forecast for 2018 may make meeting that price tag a challenge. According to RBC Finance Director Janae Stansworth, the county expects to lose close to $600,000 in property tax income next year. Completing the broadband project, according to Recanzone, could cost an additional $600,000-$800,000.
“I don’t want to see the county lose money, but we need to finish the project,” Woodruff said. “Voters approved it by a large margin. We also didn’t ask the voters for any money to get it done. If we made a mistake, let’s do what we can to fix it.”
Local Access Internet owner Dale Smith is on the commissioner’s agenda for Monday, Sept. 18 in Rangely and Monday, Sept. 25 in Meeker to discuss solutions. Smith hopes the public will attend to express their views.