HomeMy WebLinkAbout10 Broadband Business Planning Agenda Item # 10
TRUCKEE DONNER
i L Htility Distri( t
Workshop
To: Board of Directors
From: Alan Harry; General Services Manager
Date: January 17, 2008
Subject: Broadband Business Planning
1. Why this matter is before the board
The purpose of this memorandum, and associated power point presentation, is to provide the
Board with a clear appreciation of the milestones the District has achieved to date as it relates to
the TDPUD Broadband Initiative, and an update on Broadband related disbursements to date.
2. Summary
• The TDPUD Board of Directors and staff have been working on what has been coined the
"Broadband Initiative" for some time in order to provide the Truckee community with superior
broadband services, including high speed data, IP video and competitive telephone services.
• Over the past eight years, we have drafted numerous iterations of a financial business plan,
the latest of which was approved by the TDPUD Board of Directors and Nevada County
LAFCo in 2004. This final business plan was evaluated and approved by an independent
financial analyst.
• Within this same time frame the District has contracted with three independent marketing
research firms to conduct quantitative market research to identify telecommunication needs
and market demand for District provided broadband services.
• In addition, the District has evaluated virtually every technology for the provision of broadband
services including coaxial cable, a mix of coaxial cable and fiber optic cable, wireless
technologies, broadband over power line technologies (BPL) and the use of fiber optic cable
from the source to the end user.
0 Page 1
• Throughout our investigations, we have communicated our findings to the District's Board of
Directors and the Truckee community. In fact, the District's Board of Directors have taken
over fifty (50) actions relating to the broadband initiative. In every case these findings and
actions have been reported to the community through the District's web site, press releases in
the Sierra Sun, speaking engagements and feature articles in both the Sierra Sun and
Moonshine Ink.
• Following Nevada County LAFCo's certification of the Truckee Donner Public Utility District to
provide broadband services Truckee's local cable television operator, Cebridge Connections,
filed a lawsuit in opposition to the certification which effectively stalled the broadband initiative
for eighteen months. Following the defeat of this legal challenge, Cebridge Connections
ignored their agreement to adhere to the Nevada County Superior Court ruling and appealed
the action to the State Appellate Court of California. In June of 2007, the Court ruled in favor
of Nevada County LAFCo, upholding the initial ruling. With the filing of the initial lawsuit, and
subsequent appeal, the District found it necessary to put the Broadband initiative on hold due
to lack of funding opportunities.
• During the third quarter of 2007, the District was approached by 180 Connect, Quanta
Services and Victor Capital with a proposal to design/finance/construct and manage the
proposed broadband system, through a lease to own proposal. Due to the instability in the
telecommunications market Victor Capital, 180 Connect's financial partners bowed out of the
project in December, 2007.
• During the Board workshop agenized for January 23"d, I would like to provide the Board with a
summary of milestones met by the Truckee Donner PUD since the inception of the
Broadband Initiative.
3. Recommendation
There is no recommendation at this time
A190 IrrFy Michael D. Holley, P.E.
Gkoeral Sere' s Manager General Manager
•Page 2
TDPUD Broad band
I nitiative
A Look Back
Purpose of Presentation
• To provide the Board of Directors &
Truckee Community with a clear
appreciation of the milestones that have
been achieved to date
• To provide an update on Broadband
related disbursements to date
• Milestones - 1
— District Strategic Plan (1999)
— Application to Nevada Co. LAFCo (approved 1999)
— Customer Survey findings (2000 / 2003 / 2007)
— Preparation of Business Case (ongoing)
— Choice of Technology (approved 2002)
— Cable Television Franchise (approved 2003)
— Bidding (approved 2004)
• Milestones - 2
— Financing (Initial COP Docs approved 2004)
— Regulatory Approval (August 2004)
— Defeated Legal Challenge (December 2005)
— Defeated Appellate Court Challenge (June 2007)
— 180 Connect/QuantaNictor Capital
design/finance/build offer (June 2007)
— Victor Capital bows out (December 2007)
— Nevada Co. LAFCo tolls time lost per Cequel III
litigation (January 2008)
Broadband Related
Disbursements through 12/31 /07
• Study and Analysis — $1 , 191 ,893
• Legislative — $271 ,092
• Legal — $402,295
• Advertising / PR — $79,984
• Financing — $568,032
• Enaineerina Services - $ 143 ,969
• Total Disbursements - $2,657,265
Next Steps
• Pursue The Best Use of the District's
Broadband Assets