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February 7, 2017

Supervisors to consider broadband authority

If we have somebody with a good idea in the public/private arena, I want to move on it. Basically, I want to keep the door open. I don’t want to wait. A lot of people want action. And, I don’t want to be perceived as kicking the can down the road.
— Rick Gerhardt, Cedar Run District supervisor
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Staff Journalist
The Cedar Run District supervisor hopes to “keep the momentum going” on Fauquier’s effort to extend broadband internet service to rural areas the county.

To that end, Rick Gerhardt wants the board of supervisors to consider establishing an independent authority to manage a broadband network.

The board probably will hold a March 9 public hearing that would allow it to create such an authority. The supervisors will discuss the topic in a work session Thursday afternoon.

Fauquier’s broadband consultant, Blacksburg-based Design Nine Inc. estimated it could cost $20 million to connect up to 9,000 homes in rural Fauquier. The county supervisors believe the system eventually would pay for itself.

“We want to start the process of going down the path of a public/private partnership,” if the county takes that route, Mr. Gerhardt said of the impetus for creating an authority. “We’re going to have to have a vehicle in place that oversees that asset.”

The Cedar Run supervisor does not “foresee” the board approving the creation of an authority March 9.

“If we have somebody with a good idea in the public/private arena, I want to move on it,” Mr. Gerhardt said. “Basically, I want to keep the door open. I don’t want to wait. A lot of people want action. And, I don’t want to be perceived as kicking the can down the road.”

He also wants to “preserve” the option of creating an authority, should Virginia’s General Virginia’s General Assembly pass pending legislation promoted by telecommunications companies that effectively would prevent local governments from funding the construction of broadband systems.

County Attorney Kevin Burke plans to use the three-page Nelson County broadband ordinance as a “starting point” to discuss and craft such a document for Fauquier.

Under that ordinance, Nelson’s five supervisors served as the authority’s first board for one year from the date the State Corporation Commission approved its charter.

Thereafter, the supervisors appoint the authority representatives — one from each magisterial district — to four-year terms, beginning July 1.

Like Nelson, west of Charlottesville, Fauquier has five magisterial districts.

Under the Virginia Wireless Service Authorities Act, broadband authorities may:

• Buy, build, rebuild, improve, expand, operate or extend any project.

• Issue revenue bonds, which would be paid “solely from revenues” to cover all or a part of a project’s cost.

• Borrow and issue notes and bonds. “The political subdivision creating the authority may lend, advance or give money to” the authority.

• “Fix, charge and collect rates, fees and charges for the use of or for the services furnished by or for the benefit from any project operated by the authority.”

County supervisors over the years have created at least three independent authorities:

• The Fauquier County Water & Sanitation Authority.

• The Fauquier County Economic Development Authority.

• The Vint Hill Economic Development Authority.
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Jim Griffin · February 9, 2017 at 10:34 am
NNT: On-board to support whatever direction our community chooses to address its collective need for bandwidth, much as we do with other "utilities" such as telephone, electricity, water, sewage, roads, emergency assistance and so forth. If a bond-based approach is chosen, fine with me.

NNT, I absolutely agree that the ballot box is the accountability factor and I cannot read the BOS tea leaves in any other way than to believe they see progress on this issue as one essential element of retaining their positions, having reached out to their constituency and listened carefully to their priorities. If they are reading it wrong, you are right: They will suffer at the ballot box.

While I have experience-based reactions as an expert, professional technologist to the various proposed approaches, I am somewhat agnostic as to how we implement whatever plan is devised. For example, perhaps the BOS will simply choose to squeeze existing regulated utilities to achieve their aims, and that would be fine with me. Verizon could be compelled to do the job as part of their service agreement. Likewise, Dominion could step up and partner with, say, ATT in a test of their new rural broadband tech.

Open-minded to how we address our need and not ready to condemn the effort before the approach is determined, which seems to be the goal of so many of these posts.
nonewtaxes · February 9, 2017 at 10:00 am
Dear Jim,
Of course I'm guessing that the tech will be outdated. Every prediction or extrapolation into the future is a guess. However, the history of broadband with respect to generational changes, suggests that each generation has a dynamic life of about 10 years before being superseded by the next generation of broadband.

Fiber is only one part of the BOS system and the most expensive part. In fact, fiber is so expensive that Google is lowing down or stopping altogether parts of its fiber roll out. It can't recover the costs. While the capacity of fiber may not be outdated soon, all of the 4G components are more likely than not to be outdated.

Bolshevism refers to an autocratic government authority and central economic planning and the elimination of a market system. There's a huge difference between what I write and what you understand. It has nothing to do with charity. The biggest difference is that taxes are a mandatory payment, charity is a willful payment.

Being a liberal minded person, but not a Liberal, I'm indifferent to what you do with your money. However, since taxes are mandatory for me to pay I have an obligation to see to it that the money is spent judiciously just as you have the same obligation.

While the broadband system will probably get approved, (supposition), I will have the option in 3 years to vote for a different BOS just as you will have the option to keep the same BOS.

Jim, if you accept that the NPV and IRR of this system are both negative - it's a money losing deal, would you still buy bonds that fund it?

Jim Griffin · February 9, 2017 at 8:20 am
Pure supposition says the tech will be outdated. In fact, the BOS is looking at analogous fiber installations and fiber will not be outdated anytime soon.

As regards NNT's question -- what if people need computers? -- and his reference to "bolshevism," charity fills this gap today. Bethel Church for one donates refurbished computers to those in need, especially school children.

We must reject your insinuation that the fine Bethel Church people must be Bolsheviks. Their office is near mine, they are primarily ex-military service and they are in no way communist in their tendencies. I urge those with excess to donate and those in need to inquire.

If they had the infrastructure, they'd help with bandwidth, too, but infrastructure requires a larger, more coordinated approach.

For my part, I will feel the project is successful if only plenty of fiber is run from a centralized location (think: library) to every county- and village-operated structure and the market is permitted to co-locate and use the capacity. Towers, too, would be useful. Bare minimum our schools, first responders and others should have loads of fiber capacity.

Success does not require govt choosing winners and losers in the tech space, but the prospect obviously fuels your anti-service narrative.
tffirestone · February 9, 2017 at 7:01 am
Yes, I saw your post and I also stated that assumes they would be on budget. Nonetheless I agree with your post as things are rarely within the planned and yes it will be obsolete before it is paid for = Bad deal for the taxpayers pretty simple.
nonewtaxes · February 9, 2017 at 12:24 am
Tell It,

Your math is 1/2 correct. The per household cost will be about $2222 each but your profit and breakeven time frames are off. Design Nine doesn't expect the system to make a profit until year 4. The financial metric that indicates that this project is not an investment is the 15 years it will take to pay back the original capital outlay.

Over those 15 years the planned system will become obsolete. It is already becoming outdated. Verizon is field testing 5G this year with roll out plans for 2020. Before the Design Nine system gets half way installed the fundamentals of broadband will have evolved and the county will be buying yesterdays bread.

By extension, after this system gets pushed through, what happens if people complain that they can't access all this speedy data because they don't have enough laptops or tablets for each family member? Will the county pay for those devices also?

Bolshevism is a failed philosophy.
Tell It Like It Is · February 8, 2017 at 10:04 am

I said, "T1 line or something" with emphasis on "something" that may work for your specific needs. Then man spend the money for a T3 or "something" better that "you" need.

Speak of ignorance, trying reading the entire sentence next time and actually "think" before you flap those finger-jaws.

And I'm sorry stooped to your level of name calling after your post to me on "Tell Like It Isn't". Ya got me on that one.

Like I said, we don't know each other so it does not matter. Probably a good thing anyway. I already answered that and you obviously didn't read that either.

Nonetheless, I still love ya man.
Jim Griffin · February 8, 2017 at 9:15 am
Tell It:

Your ignorance continues to shine. T1 lines are insufficient, bearing only 1.544 mbps, insufficient for video or a family, especially a family with a school-age child. I know, I have one, and it costs over $300 month for that T1 line. At my Warrenton office we get over 50 mbps from two providers for well-under $100.

Everyone gets a voice, which is why this is on the BOS agenda. Surveys show your views are at odds with the vast majority of your fellow Fauquier citizens. No surprise there!

Your suggestion that I might not believe in the 1st Amendment is obviously absurd as I clearly believe that even pseudo-anonymous cranks like yourself deserve a voice, even one as uninformed as yours that hides behind a false moniker.
Tell It Like It Is · February 8, 2017 at 8:33 am
Jim Gruffin,

Yer up this morning. Thought maybe you were still asleep.
Well you might be surprised. Trump surprised more than a few too.

Honestly, guys it's not that I have a problem with the service but only if it is cost effective.

If "you" need it blazing then put in a T1 line or something. This is America, you can have anything "you" want if "you" are willing to paying for it.

Those that don't need it and may not be willing to pay for it, should have a voice in not paying taxes to have it. Perhaps you don't believe in the 1st Amendment?

I love you Gruffy Jim.
Jim Griffin · February 8, 2017 at 8:19 am
Tell It Like It Isn't: Who is "we" to which you refer? There cannot possibly be more like you -- you are one of a kind!

Still, maybe *you'd* be happier moving somewhere they don't care about broadband; The head of the Board of Supervisors is a leader resolved to extend its benefits to all in our county and surveys show overwhelming support.
Tell It Like It Is · February 8, 2017 at 8:09 am
Maybe "you" should spend whatever "you" need to get the service you "need" instead of expecting the rest of us that don't really need it to pay for it in taxes.
Oh and I don't watch TV a lot either.
Perhaps you should move where they already have the IT services you desire for your hi tech needs. You'll be happier and ........ so will we.

Savethehyenas · February 8, 2017 at 7:23 am
Maybe reach out to Google Fiber
nonewtaxes · February 7, 2017 at 9:53 pm
BOS Gerhardt can hope all he wants that the broadband system will pay for itself but the financial projections from Design Nine expect a different outcome.

While Design Nine expects the system to become Revenue positive in year 4, it will take about 15 years to pay back the initial investment. Consider that 2G and 3G technology lasted about 10 years each before they were superseded by the next generation of broadband. Based on the history of broadband and market testing of 5G technology its reasonable to assume that this system will be outdated before its completed and almost certainly obsolete before it is paid off. A key characteristic of each generation of broadband is that it is not backward capable. The technology is forward moving.

By analogy, the county is going to buy a farm tractor that has an expected life of 10 years but a payment book of 15 years.

If rural broadband could be profitable why wouldn't the current provider extend its network?

If the Design Nine plan was profitable why wouldn't Design Nine build the system and keeps the profits?

What is Plan B? Suppose the county broadband system doesn't get the amount of subscribers required to pay off the debt? Will the county raise taxes? What is the scrap value of used and obsolete telecom equipment?

If the system is going to be profitable why not issue a bond? Maybe it'd be real tough to get it floated when investors look at a Cash Flow analysis and find a negative NPV and IRR. The system doesn't make enough revenue to pay itself back.

The BOS broadband plan is a lot like Obamacare with two major differences that actually make it worse than Obamacare. 1. People may die without medical care but no one ever died without broadband. 2. Obamacare was a needs based subsidy. The BOS plan is broadband welfare for all even though the county per capita income will probably disqualify it from getting any grants.

Wellitsthetruth · February 7, 2017 at 8:21 pm
>Whose got an $100 a month just for internet

Oh and also, some of us in the county already pay upwards of 100 dollars a month(some even more) so there are plenty of people who can and will pay for it. To some Internet is more important than TV
Wellitsthetruth · February 7, 2017 at 8:11 pm
Well guess what "tell it like it is"

Some of us in the county have to do more on the internet than a crappy MIFI connection could withstand. Those things are famous for bogging down worse than anything else under intense loads.

Oh wow $50 dollars a month, woah that must get you like idk 5-10 GBs of data. Which is pathetic for the price and speeds they give you. I know of people who go through twice that monthly allowance every single day. Now obviously these broadband connections wouldn't have that much data but the price vs speed/data would be way better than a MIFI

You sure do a good job of telling it like it is for you, but per usual you don't represent this county as a majority l.
Tell It Like It Is · February 7, 2017 at 4:48 pm
20 million into 9000 homes, unless my math is off is $2,222.00 per home! Yikes!

It will take 23 months just break even before the company makes a profit.

Whose got an $100 a month just for internet and that assumes the estimate will be under budget .... and assuming the installer is willing to wait 2 years before turning a profit?

My wireless MIFI device works in the rural Fauquier and only cost $50 a month.

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