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Home My WebLink About2005-06-15 Agenda Packet - Board (15) CLOSED SESSION CONFIDENTIAL Agenda Item # ,m RM,a . . Staff Report To: Board of Directors From: Peter Holzmeister Date: June 9, 2005 Subject: Conversations with Pete Abel of Cebridge Connections Why this matter is before the board: Pete Abel, Vice President of Communications for Cebridge Connections recently attended a District board meeting and spoke under public input. He suggested that Cebridge and the District enter into discussions with the goal of settling differences or disputes that exist between the two organizations. Subsequently, the board discussed this suggestion in closed session and gave guidance to me and authorized me to have preliminary discussions with Mr. Abel. The purpose of this matter is to report on the status of those discussions. History: We are all too familiar with the history of the dispute between the District and Cebridge. The District has been planning to deploy a broadband system in Truckee and offer voice, video and data services. We applied to Nevada County LAFCo for activation of the latent communication power and LAFCo approved our request. Cebridge filed a suit asking the court to vacate the decision of LAFCo. Our broadband deployment is on hold until the suit is decided. New information: Mr. Abel and I conducted an e-mail correspondence which resulted in a meeting on June 7, 2005. Attached are copies of the a-mails for your review. By means of the e-mail correspondence we were trying to determine if there was a reasonable chance that a high level meeting would be productive. If each side described its fundamental position and there appeared to be an unbridgeable gap a high level meeting would be unproductive. We were also trying to agree on a set of discussion points that would quickly get us to the meat of the matter. Board President Hemig and I consulted on this matter, reviewed the e-mails, and concluded that the positions were unbridgeable. I conveyed this opinion to Mr. Abel and he asked for a face to face meeting with me. We had that meeting on June 7. At that meeting he asked my why I thought the positions were unbridgeable and I told him essentially the following: • TDPUD is committed to having a state-of-the-art broadband system deployed in the community. • We believe that the gold standard today is fiber-to-the-home (FTTH), that this kind of system provides the kind of capacity that is being deployed throughout the United States. • We believe that Cebridge Connections will not deploy this kind of system, and that Cebridge will try to make modest improvements in the outdated coax system and nothing more. The community will end up with a 550 Mhz system which is a poor performing system. Mr. Abel responded with essentially the following points: • Cebridge believes that there is not a demand at this point in time for fiber- to-the-home service in all sections of Truckee. • He said that the cost to extend FTTH is not justified by the revenues that will be generated • He said that Cebridge is extending fiber to some areas of Truckee, but not all of Truckee. • He said there may be a way for the District and Cebridge to cooperate in a joint venture if the District could reach the point of agreeing that the existing coax system has some value or use in a future system serving Truckee. For example, he said, the district could build a fiber loop and Cebridge could use that loop (paying the District for use) to extend either fiber or coax service to neighborhoods. My response was that Cebridge is understating the demand in Truckee for broadband service. I told him that the community is technologically savvy, is becoming high income, and society in general is expecting increasing broadband capacity. Mr. Abel and I ended the meeting by agreeing to talk again. I told him I would share the ideas we discussed with the District's board. I also told him I would talk with technological experts about his idea of the District deploying a loop (this does not sound line a worthy concept to me but I did not want at that time to dismiss it out of hand). Recommendation: I would like to discuss these matters with the board to bring you up to date and see if you have any thoughts or further direction for me. Ce criniit s ns May 12, 2005 Mr. Peter Holzmeister General Manager Truckee Donner Public Utility District Dear Peter: Following up on our discussion last week — regarding a potential dialogue between senior officials of our respective organizations and the exchange of our "minimum expectations" prior to the start of such a dialogue— I have met with our senior management team, including Mr. Jerry Kent, who is both the Chairman of our Board of Directors and Chief Executive Officer, and Mr. David Rozzelle, our Chief Operating Officer. Based on their direct input, we expect our discussions could be productive if the TDPUD is willing to explore ways in which private enterprises (including but not limited to Cebridge) — either independently or in collaboration with the TDPUD — can meet both the current and future video, broadband, and telecommunications needs of the community. To constructively evaluate this topic, we further believe the agenda for an initial meeting should include ... 1. The scope and nature of the community's video, broadband, and telecommunications needs. 2. The extent to which these needs are currently being met 3. If unmet needs can reasonably be addressed now and in the future through private enterprise solutions, or if publicly financed/subsidized assistance might be necessary 4. How Cebridge's network might be employed to assist the TDPUD in the provision of its current utility services. We further expect that, for our mutual benefit, these discussions would be treated as "settlement" discussions, from which nothing would be admissible in any subsequent proceeding for any purpose — i.e., neither party would seek to use, in subsequent proceedings, anything that the other parry's representatives say or write in the context of the aforementioned discussions. Bottomline: We are extremely flexible and willing to explore reasonable alternatives through which we might collaborate rather than conflict with the TDPUD. Assuming we agree that our respective lists of minimum expectations allow for a productive dialogue to commence, we look forward to scheduling the start of that dialogue with a meeting in Truckee, between your senior representatives and ours. Mr. Kent and Mr. Rozzelle have both indicated they will make time for this meeting. Sincerely, its, It,/ Peter M. Abel Vice President, Community Relations Copy: Mr. Jerry Kent, Chairman of the Board and Chief Executive Officer Mr. David Rozzelle, Chief Operating Officer Mr. David Gilles, Vice President of Operations, Pacific Region RE: Per Your Voice Mail Page I of I Peter Holzmeister From: Abel, Pete [pete.abel@cequel3,com] Sent: Friday, May 13, 2005 10:05 AM To: Peter Holzmeister Subject: RE: Per Your Voice Mail Did you send your letter through? Wanted to make sure there weren't any email problems. Feel free to reply to this message. Thanks. -----Original Message----- From: Abel,Pete Sent: Thursday,May 12,2005 3:00 PM To: PeterHolzmeisterlilitc1pud,org' Subject: Per Your Voice Mail << File: Holzmeister Lefter.doc >> Peter -- Thanks for your voice mail. I attempted to call you back and leave a voice mail for you, as well, although I fear I pressed an errant button when doing so. Either way, attached is an elecontrically signed letter, copied to our top executives and reflective of their direct input on the minimum expectations we agreed to exchange prior to scheduling a meeting between our organizations. I will be out of the office this afternoon for some personal commitments, but back in tomorrow morning and throughout the day, should you have any follow-up questions. We look forward to receiving your correspondence, as well, outlining the TDPUD's minimum expectations. Thanks for your consideration. -- Pete A. @ 314.315.9346 (office) or 314.420.1817 (mobile) "The information transmitted is intended only for the person or entity to which it is addressed and may contain proprietary, confidential and/or legally privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from all computers." 6/9/2005 May 13, 2005 Peter M. Abel Vice President, Community Relations Cebridge Connections Dear Pete; I received your letter regarding potential dialogue between Cebridge and the District and I need to express a concern. Your list of four agenda items was something of a surprise to me. I was expecting you to set forth basic positions expressing outcomes that are essential to Cebridge. As an example, during our conversation last week you stated that one important outcome for Cebridge would be that you not end up competing with TDPUD in the provision of video services. I took that statement as an indication of the kind of issues we would each prepare and share. It appears that the issues identified in your letter lead to a general discussion, rather than points upon which we might search for a common ground. Considering the above concerns that we have, I ask that you consider providing a more substantial initial statement of outcomes that Cebridge would be seeking in the discussions. We believe that focusing on more substantial outcomes would facilitate a more productive meeting among top management representatives. Following is our statement of outcomes that we consider essential to satisfy the District's basic position: • TDPUD will design, build, own, maintain and continually update a FTTH infrastructure. It is a community asset that must be owned by the Truckee community. • TDPUD will own the IRU to the fiber connect from Reno to Truckee and Truckee to Sacramento. • The FfTU system will provide IP video, data, voice and other broadband services utilizing its fiber backbone and delivery systems to residential, commercial and governmental users. • District will generate a revenue stream that will pay for the investment, and generate reserves that allow it to update the system and maintain an overall healthy financial condition • District will have a recognizable brand name related to its presence in the broadband utility business • District will use the broadband system for its internal data needs. • District may choose to allow other private or public organizations to provide services using its fiber infrastructure if it is found to meet any and all legal and financial requirements. We are willing to agree that nothing we say or documents we share would be admissible in any subsequent legal proceeding for any purpose. We are happy to read that you remain very flexible and are willing to explore reasonable alternatives through which we might work collaboratively. Please provide me with a response to this letter and then we will determine if face-to-face meetings are warranted. Very truly yours, Peter L. Holzmeister con! eCTii —, May 19, 2005 Mr. Peter Holzmeister General Manager Truckee Donner Public Utility District Dear Peter: You asked that we get back to you with more detail regarding "outcomes that are essential to Cebridge"from the proposed dialogue between our organizations. As you know, private enterprises have already designed and built communication infrastructures in the Truckee community, and they are regularly maintaining and updating those infrastructures. Hence, rather than design, build, own, maintain, and update an entirely separate, conflicting infrastructure — as suggested in your May 13 letter — we hope the TDPUD would be willing to explore ways in which it might collaborate with private enterprises on graduated or progressive enhancements/extensions to the existing infrastructures. For instance, the TDPUD might collaborate with private enterprises to (a) extend communications infrastructure to un-served or underserved areas of the community; (b)construct new, fiber-to-the-neighborhood infrastructure for planned developments; (c) install custom solutions for special-case needs (such as Channel 6 telecasts), etc. In exchange for these contributions, the TDPUD might secure revenue-sharing and similar agreements, which pay back its investment with a reasonable return, while improving the efficiency and effectiveness of its own water and power utility operations, for the benefit of the entire community. To that last point, the TDPUD might use our existing network to read meters, connect any un-connected District facilities, etc. In short, our one essential outcome from a dialogue with the TDPUD is a middle-ground resolution that... • advances the community's interests; • is based on collaboration sans conflict; • incorporates our respective areas of expertise and existing infrastructure investments. I trust this additional information is helpful and I hope we can schedule the initial installment of our dialogue during the week of either June 6 or June 13, after you have returned from vacation. Let us know, and thank you, as always,for your consideration. Sincerely, / ' #v Peter M. Abel Vice President, Community Relations Copy: Mr.Jerry Kent, Chairman of the Board and Chief Executive Officer Mr. David Rozzelle, Chief Operating Officer Mr. David Gilles, Vice President of Operations, Pacific Region Page lof | Peter Holzmelster From: Abel, Pete[poKe.ubo|@oaquo|3xom] Sent: Sunduy, May 15'2OO53:58P&1 To: PotarHn|zmoio$er Subject: RE: Response k> Pete Abel letter Peter--Thank you for your email/lefter, Given my travel schedule it may be a few days before we are able to respond to the points on which you request a response, but I will commit to having you a reply before you leave on your trip. Thanks again. — Pete A. From: Peter Hobmeister [nnaiko:peterho|zmeister@0dpud.urg] Sent: Fri 5/13/2005J:59PM To: Abel, Pete Subject: Response to Pete Abel letter "The information transmitted is intended only for the person or entity to which it is addressed and may contain proprietary, confidential and/or legally privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from all computers." 6/Y/2005 Peter Holzmeister From: Abel, Pete [pete.abei@cequel3.com] Sent: Thursday, May 19, 2005 6:28 AM To: Peter Holzmeister Subject: Response to May 13 Questions Importance: High Holzmeister Letter Response to Pete Holzmeister 2.doc(52 K.- Abel letter.d... _etter.doc(51 KB)... «Holzmeister Letter 2.doc>> <<Response to Pete Abel letter.doc>> «Holzmeister Letter.doc>> Peter -- Attached is response to the questions raised in your recent letter. Thank you for allowing us some additional time to pull this together, given my travel schedule. I will attempt to call you later today to discuss this response, prior to your departure, next week, for vacation. Please note that I have attached all three of our recent letters to this email, to assist with keeping all correspondence together, in one place. These attachments include . . . * My May 12 letter to you -- Holzmeister Letter.doc * Your May 13 letter to me -- Response to Pete Abel letter.doc * My letter dated today, with e-signature, to you -- Holzmeister Letter 2.doc Thanks again. -- Pete Abel @ 314.315.9346 "The information transmitted is intended only for the person or entity to which it is addressed and may contain proprietary, confidential and/or legally privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from all computers. ^ 1 Peter Holzmeister From: Abel, Pete [pete.abel@cequel3.com] Sent: Friday, May 20,2005 3:19 PM To: Peter Holzmeister Subject: RE: Response to May 13 Questions Peter -- I tried calling you a few minutes ago, but it sounds (from your voice mail) that you may have already left on your vacation. In case your still there, I wanted to drop a quick email to see if there might be an update on scheduling the start of our dialogue for the week of June 6? I also had another question for you, on a separate topic, but will try to reach Steve Hollabaugh on that matter. Let me know, as you can. If you have left already, I do hope you enjoy your time off. -- Pete A. > -----Original Message----- • From: Abel, Pete > Sent: Thursday, May 19, 2005 8:28 AM > To: 'Peter Holzmeister' > Subject: Response to May 13 Questions > Importance: High > << File: Holzmeister Letter 2.doc >> << File: Response to Pete Abel > letter.doc >> << File: Holzmeister Letter.doc >> > Peter -- Attached is response to the questions raised in your recent > letter. Thank you for allowing us some additional time to pull this > together, given my travel schedule. > I will attempt to call you later today to discuss this response, prior > to your departure, next week, for vacation. > > Please note that I have attached all three of our recent letters to > this email, to assist with keeping all correspondence together, in one > place. These attachments include . . . > * My May 12 letter to you -- Holzmeister Letter.doc > * Your May 13 letter to me -- Response to Pete Abel letter.doc > * My letter dated today, with e-signature, to you -- Holzmeister > Letter 2.doc > > Thanks again. -- Pete Abel @ 314.315,9346 > "The information transmitted is intended only for the person or entity to which it is addressed and may contain proprietary, confidential and/or legally privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from all computers. " 1