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February 6, 2018

Broadband prospect out; county considers ‘Plan B’

FTS Fiber of Monkton, Md., last year proposed to build a 129-mile fiber optic network that would reach the far corners of Fauquier.
What our constituents want right now — particularly those constituents who are in unserved and underserved areas — they want broadband.
— Supervisor Rick Gerhardt
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Staff Journalist
The Cedar Run District supervisor had hoped that by now construction would begin on a fiber optic network to extend broadband internet service throughout rural Fauquier.

But the county’s only prospect to build that system — Maryland-based Freedom Telecom Services Inc., doing business as FTS Fiber — last fall underwent a “restructuring” that cast doubt on its ability to get the job done, Supervisor Rick Gerhardt said.

The company’s reorganization involved the resignation of CEO Brett Hill and the December sale of the fiber optic network — worth an estimated $20 million — it built for Kent County, Md.

Because no other company submitted a proposal to build Fauquier’s fiber network, the board of supervisors Thursday probably will cancel the project.

And because of uncertainty about FTS, the board plans to withdraw its acceptance of the company’s proposal to construct a 129-mile fiber optic cable network here.

Those decisions represent a big setback for Mr. Gerhardt, who with the county staff, has spent almost two years studying how to provide broadband to Fauquier’s “unserved and underserved” areas.

But the freshman supervisor believes his “Plan B,” which would involve cash incentives to wireless providers, might soon make broadband available to more Fauquier residents.

Mr. Gerhardt first grew concerned about FTS late last year.

“I started seeing things that were being said, articles from Kent County, etcetera,” he explained.

The Kent County News in October reported that some citizens said construction of the network there had stopped and that “rumors are that FTS is bankrupt and that employees are being asked to return equipment.”

Construction resumed, but FTS sold the incomplete 110-mile network to Kent FOS, a startup company.

FTS Chief Commercial Officer Adam Noll and Mr. Hill, the company’s former CEO, failed to return phone messages seeking comment.

Dee-Anna Sobczak, chief executive of Kent FOS, declined to discuss details of her company’s deal to buy the Kent County network.

Calling the FTS turn of events a “kick in the teeth” and “a gut punch,” Mr. Gerhardt said: “I thought we were on the right track here. This was a pretty big disappointment for me.”

Mr. Gerhardt, Supervisor Mary Leigh McDaniel (Marshall) and Deputy County Administrator Katie Heritage in January 2017 visited Kent County to hear about the broadband network FTS would build there.

They came away impressed.

“We were very encouraged,” Mr. Gerhardt recalled. “It was a great concept, and it was working.”

Kent County’s system represented a model he believed FTS could replicate in Fauquier.

Under FTS’s proposal, the company would run 129 miles of fiber optic cable throughout Fauquier — from Goldvein to Upperville and Remington to Catlett.

> Document at bottom of story

The network would have connected schools, libraries, fire/rescue stations and other public buildings directly to the cable. FTS would have sold network access to “last-mile” providers to serve homes and businesses throughout Fauquier.

The county’s capital improvements plan includes $20 million to build a countywide fiber optic network — money that would be spent, as needed, on a system generating enough revenue to cover Fauquier’s investment.

But because of doubts about the FTS proposal, lack of response from companies willing to build the network and Fauquier’s fiscal 2019 budget demands, all or some of the $20 million reserved for broadband might get pulled from the county’s construction plan, Mr. Gerhardt said.

“I just don’t know when it all shakes out whether the other board members are going to have the stomach to make that type of investment, given what we’re looking from a budgetary perspective this go round,” he added.

Fauquier’s broadband consultant, Design Nine Inc. of Blacksburg in 2016 estimated it could cost $19.7 million to build a network to serve almost the entire county.

To restart the process, somehow attracting companies that would install a fiber optic network, would take too long and again might prove fruitless, Mr. Gerhardt said.

“We spent a year looking at this infrastructure, only to come to this conclusion, based on things completely out of our control,” he said. “What our constituents want right now — particularly those constituents who are in unserved and underserved areas — they want broadband.”

He believes “the quickest way” to accomplish that would be to “incentivize” wireless internet service providers using existing fiber, telecommunication towers and other technology to make “the last-mile” broadband connections to homes and businesses.

“We gotta go to ‘Plan B’,” Mr. Gerhardt said of that approach.

The Herndon-based Center for Innovative Technology has agreed to help the county create such a plan, which could be completed in four six to weeks or sooner, Mr. Gerhardt said.

“I fully expect it to look something like: ‘We have this pot of money we’re willing to throw at you as a subsidy . . . . Give us a proposal on what you can do and how many people it’s going to affect’.”

That “pot of money” would include county and Warrenton-based PATH Foundation funds, said Mr. Gerhardt, who serves on the nonprofit’s board.

“They already have $100,000 in their budget for broadband for 2018,” said Mr. Gerhardt, chairman of PATH. “Along with them, we’re going to try to come up with a solution, financially anyway.

“I can assume they will follow our lead. I’ve had conversations that clearly lead me to believe that.”

“If the county proposes a cost-sharing, dollar-for-dollar match approach to funding that would incentivize providers to improve broadband services for local residents, we would look at such a proposal very favorably,” PATH Foundation President and CEO Christy Connolly wrote in an email.

Internet access “is important” to health, education, “home businesses” and telecommuters, Ms. Connolly added. “Like our county government, the PATH Foundation is committed to helping with this major countywide infrastructure need.”

An incentive plan would include “controls” over money given to companies selected to provide wireless service, Mr. Gerhardt said.

“Obviously, we’re not going to just say, ‘Here’s a $500,000 check. Do what you want with it.’ There will be controls put in place whereby we know exactly how it’s being spent and that it is in fact being spent.”

He wants the county to advertise the project for competitive bids by April.

“My goal is sometime before the end” of the first quarter this year, “which is a bold goal.”

When could wireless companies chosen to participate in an incentive project begin providing additional broadband internet service?

“That’s a question for them, not for me,” Mr. Gerhardt replied.

Ultimately, he considers a fiber optic cable network critical to Fauquier’s future.

But, “frankly, at this point, who knows what we’ll do with the infrastructure,” Mr. Gerhardt said. “In my personal opinion, you still need the infrastructure to support commerce in this county, to bring additional commerce in this county — whether it’s data centers, whether its cell towers, whether its wireless internet service providers.”

FTS Fiber - Fauquier County Proposal Final - Public Copy_Redacted by Fauquier Now on Scribd

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farmbum · February 8, 2018 at 11:49 am
It's a good thing the county has backed out of the deal. The bottom line is if it were profitable, private business would be more than eager to do it.

You want better internet speeds and services? Move to areas that have them. Just like you would for schools, shopping and jobs.

RGLJA · February 8, 2018 at 10:49 am
A libertarian view would insist that Governments should not confiscate tax money to directly compete with commercial entities already serving the community. We already have Direct TV satellite based internet, Comcast fiber networks, and Verizon DSL internet serving the county in every way that is practical to do so. Yes, there are cost/speed issues that affect some remote areas, but that is not justification for Fauquier County to effectively take $500 from every household in the county to create their own new government fiber network, especially when that STILL wouldn't provide high speed internet to many remote areas of the county.
nonewtaxes · February 8, 2018 at 10:23 am
Everybody in the county has access to internet. This is about cost not availability.

As a libertarian would you not be more in favor of less government rather than more. After all, do we not need a Bill of Rights to protect us from government.

What's wrong with profit? Without profit how would the government function? Surely it cant extort revenue from companies that do not have any.
brandon · February 8, 2018 at 10:03 am
As a libertarian I consider broadband a fundamental *community* service in the same category as libraries, schools, electric, and roads. Anyone who wants to be successful and integrated in the community needs access to the wealth of knowledge and connection available via the Internet. Private providers only care about the bottom line, not the community. These services don't have to make a profit. Schools certainly don't make a profit, but we fund those. Smart communities all across the country as deciding to make this a top priority since they understand that providing access to the Internet is one of the easiest ways to help your community prosper.
RGLJA · February 7, 2018 at 7:24 am
I've opposed this project from the beginning. The BOS just dodged a bullet, by getting out of this horrible deal right now. It is completely unjustified to spend $20M to build a fiber infrastructure (remember when it was only going to cost $10M?). When private companies won't invest the required capital, it is because they know it won't return a profit... ever. The BOS has gone crazy with proposed spending this year, and they are very lucky to have gotten rid of this particular albatross now. Get back to figuring out what to do about schools, which is a legitimate function of local government.
Jim Griffin · February 6, 2018 at 9:44 pm
BJ: I didn't say it was a good idea, certainly not one I thought up, but I confess that if even a conservative Republican govt is considering it for national security reasons I must rethink it. It's not about surveillance -- they already have that access. It's about foreign control on the microchip level. Increasingly I think that for security reasons the essential infrastructure that controls power, traffic, aviation, etc., may require govt control. I am not referring to consumer-grade access, but to the IoT upon which we increasingly rely for the basics of life. Think medical centers, power grids, traffic and the like.

As regards our county, I think it should own its own network and provide services to itself and the towns and other municipal facilities. Schools now need greater bandwidth than ever. Sheriff Mosier can surely use video monitoring capacity. Intelligent traffic lights can move volumes of traffic beyond the ability of simple traffic lights.
BJ · February 6, 2018 at 8:13 pm
Jim Griffin - Jim do you really think it's a good idea for the Federal Government to own and operate a nationwide 5G network? Sounds too "1984" and "Big Brother". I thought people were freaked out that their phone calls were being tapped? Talk about a way to control the populace, and decide what we can do and see on the internet. One step closer to controlling information much like North Korea. And why is Trump worried about foreign exploitation through the internet, he is the first one in line in favor of foreign exploitation just by opening his mouth, and divulging classified information at the drop of the hat. No, no, no Federal government intervention!!!
nonewtaxes · February 6, 2018 at 7:54 pm
Nobody bid because it cant be done. You cant the economics of the industry and the demographics and geography of the county coupled with the economics makes it a cash flow negative project.

Smart plan B. We'll pay you to build a system and you get to keep the profit. My god! I've got to buy some army surplus towers and put in a bid to build out the system. You pay me to build it and then I get to keep the profit.
Silii · February 6, 2018 at 6:29 pm
Seriously? Only one company in the US able to meet the contract requirements? In other words, how far and wide was this contract competed?
Jim Griffin · February 6, 2018 at 4:41 pm
The county should focus on plenty of fiber (excess capacity aplenty) between all county buildings. Build a network that replaces the county's phones, installs video capacity and manages networking for county use, which should include schools and all county connections.

Once installed and running well, consider leasing excess capacity to commercial entities. The cost of pulling extra fiber is low, the future need and commercial benefit high.

It is notable that the Trump Administration is considering federal ownership and operation for a nationwide 5G network, so great are the risks of leaving key infrastructure vulnerable to foreign exploitation. Let's ensure our county needs are securely met in-house and grow the network after that is accomplished.

Data centers and other businesses may prove valuable customers and partners for the fiber connections the county can offer from a properly configured network. So too may entrepreneurs looking to serve our residents with fixed and wireless options.
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