Tag Archives: CCEDC

The CCEDC’s Broadband Towers Proposal The $2 Million “Road to Nowhere”

by George Gramlich,
Managing Editor
Analysis and Commentary
Introduction
Custer County should not commit to supporting this venture that the Custer County Economic Development Committee (CCEDC) is proposing. Government should be limited, especially when it comes to entering a private sector marketplace (Just look at what happened to healthcare.)
Just from a business perspective, the proposal lacks a detailed business plan, market analysis, income/revenue projections, firm cost and liability projections competitive analysis (satellites, etc.), technology evolution projections, and county infrastructure requirements to support the towers. The proposal is fatally incomplete and would be laughed out of any CEO’s office.
For Custer County to make a 20-year financial and
liability commitment to this incomplete, flawed and certainly doomed project would be fiscally irresponsible and a complete disservice to its tax paying citizens.
Where Is the Detailed Business Plan?
Yes, where is it? Marketing, income/revenue, expenses, manpower, infrastructure, competitive analysis, legal issues, management structure, on and on. Nowhere to be seen.
The CCEDC commissioned a consulting firm (Centerline Solutions) to do a preliminary, basic cost study for the towers. The study is flawed in many ways. The cost estimates for land acquisition or leasing are simply guesses. They could be off by 100’s of thousands of dollars. Some landowners might just say no. The cost estimates for the towers themselves are just rough estimates. Indicative of the superficial scope of the “study”, Centerline solutions DID NOT EVEN VISIT TWO OF THE SITES. They based their estimates on satellite maps! Good grief.
More troubling are the shaky numbers themselves. Adding up the lowest cost for six towers comes to $1,629,827. The two grants CCEDC wants to get total only $2 million.
When was the last time you saw any government involved major construction project come in under budget? Or on time (and time is crucial here, see below).
The $370,000 gap between estimated costs and all the money available is simply too small to cover probable cost overruns. Past experiences insist that this project will exceed its preliminary, superficial estimates. Possibly by a huge margin. So, WHO WILL BE RESPONSIBLE FOR THE OVERAGE? CCEDC? Custer County tax payers? What happens if the money is not available? Is the project worth more (cost/benefit) if it costs $2.5 million, $3 million, or more? For how many new broadband customers?
Where is the equipment maintenance requirements and costs? At least one of the towers will require its own power. Who is going to maintain that 24/7?
The bottom line is the $2 million dollars in grants probably won’t be enough. How much more is needed NOBODY KNOWS AT THIS POINT. Is there a cost/benefit point where THIS IS SIMPLY NOT WORTH IT. Remember this is NOT free money. It is our tax payer money “benefiting” very few citizens. The cost study done so far is simply inadequate to make any decision. Bad planning equals bad results. If the CCEDC is so sure of success, let them own it.
Where’s the Market to Support It?
As noted in Dan Bubis’ analysis, the proposed towers would provide access to only 870 additional addresses (parcels) in Custer County that currently don’t have terrestrial internet access.
Of these, how many actually have houses on them or will have in the foreseeable future. The answer is few. If there was a profitable market there, our local internet providers would be there right now. On a cost-benefit basis, the “investment” in these towers is simply unsupportable.
Maintenance and Support Costs?
How can one commit to a major expense over a 20-year period without knowing what the actual costs will be? There is NO supporting documentation on what the maintenance and support costs are and what that will cost Custer County. Physical towers, electronic equipment, backup power, solar power, labor, liability, manpower, insurance, etc costs are ALL UNKNOWN. Plus, Custer County does not have the expertise to maintain these towers. We would probably have to contract it out which is a huge problem in itself. It could be a MAJOR expense issue in the future with little or no income to cover it. Who would enter a long-term business agreement without a realistic revenue and cost study? Who? The CCEDC with somebody’s else’s money.
Property Access/Lease/Acquisition Costs
Centerline’s estimates on property access/lease/acquisition costs are simply guesses. No sane business person would proceed with this project without firm, legal commitments from the landowners involved. The potential lease costs, which Custer County appears to be on the hook for in the future, are completely unknown. Bad planning equals bad results.
Where Is the Income to Offset the County’s Future Costs?
There has been NO study done to estimate the potential revenue flow to the county? None. My guess is that there is none because it would clearly show insufficient income to cover the County’s potential costs. As noted below, the number of new tower cus-tomers would be minimal. Plus, when satellite broadband comes online in the near future, it will certainly provide better and cheaper service resulting in major defections to the new technology leaving the tower customer base even smaller.
Provider Uncertainty
Has any county broadband supplier (eg, Secom) contractually committed to this project? NO. Will they? Nobody knows. It is completely irresponsible to commit $2 million dollars of tax payer money, and a large unknown annual future cost to the county, to a project WITH NO COMMITTED PROVIDERS.

The Use of Obsolete Technology
With multiple, multi-national corporations entering the broadband satellite market NOW, tower-based broadband will be obsolete in just a few years (see below). There will be literally thousands of low orbit broadband satellites available from various vendors competing against each other for the market. Performance/service will be high and cost low. The Ziggurat Towers will be no more.
New Technology Coming Within Years
From a recent Bloomberg report:
“The FCC last year gave OneWeb access to the U.S. market using a proposed fleet of 720 satellites and granted Telesat access to the market via 117 satellites already authorized by Canada. Space Norway won approval for two satellites.”
Bloomberg also reports that SpaceX (Elon Musk) is about to go big in satellite broad-band:
The FCC last year said SpaceX had requested authority to deploy and operate a constellation of 4,425 satellites operating roughly 700 to 800 miles above the Earth (or 1,110-to-1325 kilometers).
Without a doubt, cheap, high-speed satellite broadband is just around the corner. Spending $2 million dollars and making a 20-year commitment to obsolete technology is clearly wrong and irresponsible. In fact, it is just plain stupid.
(See news article URL’s below.)
Past Municipal Broadband Failures Nationwide
As noted in several Sentinel articles last year, there have been numerous, extremely high cost municipal broadband failures over the last few years. (see http://munibroadbandfailures.com) Most of these failures occurred in municipalities that have far greater financial bases than Custer County. There are clearly problems with small governments trying to compete against the private sector. We should not enter that arena.
Twenty-Year Commitment?
Land based broadband (and specifically, tower-based broadcast broadband) will be shortly eclipsed and made essentially obsolete (especially for rural areas) within a few years. Satellites will dominate the market.
The economies of scale are obvious. The existing internet towers will be like the derelict mining structures doting our county. For the County or any private business to make a 20-year commitment with a KNOWN technology shift coming (and more after that) is simply wrong and irresponsible. It would be wrong for the County Commissioners to commit the taxpayers of this county to a virtually unlimited liability in a business/technology sector IT KNOWS NOTHING ABOUT. In the software/hardware/computer/communications sectors, THREE YEARS IS A LONG TIME. The towers could be obsolete before they are even operational.
Another Big Government Waste of Money
Would you personally, or would any business, sink two million dollars (or much, much more; which is just the initial infrastructure investment) of YOUR OWN MONEY into a new business without any real market, revenue/income and expense/cost studies? And said business would be soon using obsolete technology? This potential $2+ million tax dollar boondoggle is a classic case of the “road to nowhere” where there is virtually no payback for the money invested. Remember, the $2 million dollars is OUR TAX MONEY. It is not “free” money.

Notes:
Article URL’s:
www.telesat.com/news-events/telesat-begins-deploying-its-global-low-earth-orbit-leo-constellation-successful-launch

https://www.bloomberg.com/news/articles/2018-02-14/spacex-plan-for-broadband-via-satellite-backed-by-fcc-chairman

http://munibroadbandfailures.com

More on the SpaceX gigantic project:
https://www.cnbc.com/2018/02/17/spacex-testing-its-own-satellite-broadband-internet-network.html

CCEDC’s Broadband Tower Proposal Instant Obsolescence?

by Dan Bubis

Colorado law requires that municipalities hold a referendum before providing cable, telecommunications, or broadband service, unless the community is unserved. Our community is not unserved, we have several providers and yet we have not seen a ballot issue addressing whether taxpayer funding should go to providing either broadband or telecommunications. For the County to engage in the provisioning of these services they stand a reasonably good chance of being sued.

One of the major problems with the CCEDC’s proposal is that they don’t really have a plan beyond building towers. They have no commitments from any providers of Internet or Cellular service. While “if you build it, they will come” may work in a movie, businesses need more concrete commitments to ensure success. AT&T has demonstrated an unwillingness to increase their current equipment and they already have a tower. If the existing Internet providers could make the use case for additional towers, they would erect those towers. Perhaps the CCEDC is planning on providing access to the towers at no charge. Then how will maintenance and support be funded. See the map of DD Wireless (now Secom) towers for an idea of existing coverage. Continue reading CCEDC’s Broadband Tower Proposal Instant Obsolescence?

Federal Broadband Definitions: The Impact on CCEDC’s Proposal

Editor;
I would like to address the issue of government run Internet provisioning as the Custer County Economic Development Corporation advocates. Because the issue is complex and I don’t want to chase rabbits, I will limit my concerns in this letter.
First, we need to define broadband. In 2015, the FCC changed the requirement for Internet speeds to be considered broadband from 4 Megabits per second download speed and 1 Mbps upload to 25 Mbps down and 3 Mbps up. That meant millions who had fast enough Internet speeds suddenly did not have “broadband”. The decision was completely arbitrary and capricious and was not based on any science. Continue reading Federal Broadband Definitions: The Impact on CCEDC’s Proposal

BOCC Meeting: Dark Skies, Bad Roads, CCEDC

Board of County
Commissioners (BOCC)
—December 5, 2017
WESTCLIFFE, CO
by Jackie Bubis
The meeting started at 9 a.m. with the Pledge of Allegiance and Roll Call. Introductions of the public in attendance followed.
Commissioner Items
Commissioner Canda continues making his rounds and will meet with Road & Bridge this week if possible. He hopes to go to Wetmore to have coffee with the residents at the community center.
Commissioner Flower asked what the commissioner items section of the meetings was for. Commissioner Printz informed him it was a time for the commissioners to report on what they’d been doing and any items of interest to the rest of the Board.
Commissioner Printz reported that he’d met with Jackie Hobby in the Zoning Office. Also he’s working with Dawna Hobby regarding the December 7th interview for the IT position and advertising the custodian position. Continue reading BOCC Meeting: Dark Skies, Bad Roads, CCEDC

The New BOCC: November 30 Meeting

The New BOCC:
Old Court House Hours Restored,
Committee Formed to Review
New Personnel Policy,
CCEDC Grant Questioned Hard

Board of County
Commissioners (BOCC)
—November 30, 2017
WESTCLIFFE, Colorado

by Jackie Bubis
The meeting started at 9 a.m. with the Pledge of Allegiance and Roll Call. Introductions of the public in attendance followed.
Commissioner Items
All three commissioners reported on the CCI (Colorado Counties Inc) conference. The new commissioners commented on the quality of the training. Mr. Printz spoke with DOLA manager Christy Doon regarding broadband, Dark Skies and building issues. There were discussions with Representative Crowder about losing the Underfunded Courthouse grant. They were encouraged to apply again at the next opportunity.
Chairman Flower stressed the importance of making sure that the voters know how each commissioner votes on each issue. Kelley Camper stated that she lists these details in the minutes.
Attorney Items
Mr. Smith reported on the Planning Commission workshop. The Dark Skies issue was postponed until the December 11th meeting (1:30 in the court room.) He also reported on two airport billing issues that he’s working to resolve. Continue reading The New BOCC: November 30 Meeting

The New BOCC: November 22 Meeting

Commissioners Bill Canda, Tom Flower and Jay Printz.
Photo by Jackie Bubis

The New BOCC: Action Started
on Personnel Policy and Courthouse Hours – Printz in Opposition
CCEDC Getting $1 Million DOLA Grant

 

Board of County Commissioners (BOCC)
—November 22, 2017
WESTCLIFFE, CO
by Jackie Bubis
The meeting started at 10 a.m, after Tom Flower and Bill Canda were sworn in, with the Pledge of Allegiance and Roll Call. Due to the size of the crowd, the meeting was held in the courtroom.
Attorney Clint Smith and Clerk Kelley Camper drew lots for a temporary chairman to open the meeting. Commissioner Printz won the draw. He opened the meeting. All three commissioners wanted the chairman position and reported why they would make a good chairman. The men then voted in a chairman (Tom Flower) and vice-chairman (Bill Canda) to serve until the first meeting in January.
Commissioner Canda and Commissioner Flower then took an opportunity to express their thanks and their priorities for the job of commissioner. Both expressed that the citizens are their boss.
Commissioner Items
Commissioner Printz reported on a meeting with the Wetmore Community Center board. He stated that the Board accepted the idea that, with the future online streaming of meetings, the frequency of meeting in Wetmore might change. He also reported on the E911 meeting. Continue reading The New BOCC: November 22 Meeting

LTE: Socialized Broadband: A Lot of Dollars, Little Results

03-31-2017

This informed letter is referring to the study on Broadband solicited by the Custer County Economic Development Corp (CCEDC).  They have linked the report and the you can see the report at the link below;

https://www.dropbox.com/s/0gfi4i0rpngjfq8/Final%20Report_CC%20Broadband%20Infrastructure%20Expansion%20Design%20Study_2017%2003%2024.pdf?dl=0

The letter;

Letter to Editor;
I have repeatedly tried to write an analysis of the Custer County Economic Development Corporation’s Phase 2 and Phase 3 documents that were recently released. The documents were prepared by CenterLine Solutions for the CCEDC. All of this is paid for by you, the taxpayer. And because of that, I feel like you should know how your money is being spent and because I know a little about the subject, I feel like you shouldn’t be led down the primrose path.
For the last couple years, the Custer County Economic Development Corporation has been talking about increasing the broadband availability in the county.  Their Phase 2 and Phase 3 documents were recently released.  And since the CCEDC’s plans for broadband will be partially paid for by the taxpayers of Custer County, I feel that it’s important to understand what they’re up to.
First of all, we need to understand that the CCEDC and their friends on the Board of County Commissioners (BOCC) want to create a public utility (think phone company or electric company – one that has a monopoly and can charge whatever they want.)  It will probably be run by the CCEDC which could make a lot of money on the deal, whose principals stand to make lots of money on the deal.
The CCEDC spent $34K on these reports and is flashing them all over the county.  The documents are available online and you should check them and not just take my word for it.  Fair warning – their math is so unreliable it makes evaluating these documents nearly impossible.
Let’s start with the Phase 2 document.  Table 2 says that there are currently 9,328 addresses served by broadband but it also says that there are only 6,553 addresses in the county.  According to the Assessor’s Office, though, there are 9,122 parcels county-wide.  Head-scratching. . .  (The number 9,328 is calculated by adding the column in Table 2.)
If you add the column that lists the percentage served by each existing tower, you come up with 142.35%. You would think that these numbers by themselves would have been enough to put an end to the boondoggle being pitched by the CCEDC.   But, no, they either also can’t do such complex math as addition or they don’t care, they just want more money and power.
Municipal broadband is a colossal failure across the nation and just this simple math problem shows you why. If you look at the tables on pages 6, 7 and 8 of the Phase 2 document, you see this scenario played out in every table. And the bottom line of all of this is that if millions of tax dollars are spent on building sixmore towers, 870 more addresses will have access to broadband.   Access – Not Service.  Those 870 more addresses will have to pay for service – just like we all do and those services will be subsidized by additional tax money. Then many more millions of tax dollars can be pocketed by those running the utility.
And who are those people who will profit? It’s probably wrong to paint every supporter with this brush but the CCEDC members that I know about are Charles Bogle, Dale Mullen and Wilson Jarvis and they have already approached the towns and the county trying to get tax dollars to fund this fraud. And why is Commissioner Kattnig such a big supporter? And why does he get so mad when I refer to this as socialized broadband? I wouldn’t expect someone who has fed at the public trough almost his whole life to understand, but the legitimate role of government is not competing with private enterprise and using tax dollars to have an unfair advantage.
We currently have two wireless providers as well as a hard line provider (let’s ignore existing satellite). Much of the county has access to broadband with today’s technology. And that all improves dramatically in the near future.  What is on the horizon that will make anything the CCEDC can scheme completely
obsolete?
Before looking into the immediate future it is important to remember that both existing providers will add towers and improve the technology as the fiscal incentive merits. Before 2020, less than three years, 5G will deliver gigabit Internet everywhere and really, the theoretical speed could be 10 gigabits per second compared to 4G which is about 100 Megabits per second.  Much, much faster. Then there’s the satellite race. Big names like Boeing, Elon Musk, Virgin Galactic and SpaceX among others are launching satellites that will provide Terabit Internet. And this access will be every place on the planet that can see a piece of sky. Even the most remote places on earth will have this access. Google and Facebook have their own proposed solutions which involve covering the whole planet as well. As we have repeatedly seen, the competition will expand the quality and services while driving down prices. Without wasting tax dollars.
Why? Because the Free Market always, always does better than central government control. As technology improves, more and more people depend on that technology. That’s right Kommisar Kattnig, the unleashed productivity of the market does much better than command and control bureaucrats will ever do.
First, I’m astounded that the CCEDC spent $34,694 taxpayer dollars (grants don’t come from nowhere folks) with a firm that can’t get the math correct. Apparently, Centerline Solutions can’t even get the name of the company who hired them correct. Their study documents all refer to the Custer County Economic Development Board instead of corporation. Maybe the contractor thinks they’re working for a government agency instead of a private business.
Second, I’m flabbergasted that the CCEDC thinks the voters of Custer County are stupid enough to pay millions in new taxes so that a few more people will have access to Internet. Internet is a product, not a right. But, maybe, just maybe, the CCEDC has worked it all out with the sitting Commissioners and there won’t be a need for a silly vote.
Lastly, I’m dumbfounded that, in this day and age when the evidence of colossal failures of municipal Internet ventures is so readily available, any sane person would propose creating another municipal Internet venture.
Unless there’s big money for someone. And as always, follow the money. Who will benefit?

Dan Bubis
Rural Custer County