Since I published my last newsletter, several readers and friends have asked me questions regarding the Association Board’s ongoing pursuit of a new fiber Internet deal. The questions are usually something along the lines of, “What was the original fiber Internet deal we had with Hotwire and what is the Board trying to improve on that deal?” and “Why was it cancelled without the promised October community vote?”
As many of you know, the “Hotwire deal” was the product of what started as a privately financed feasibility study in 2014. The study was then presented to the RSF Board. Finally, after another year and a half of due diligence, negotiations and over $350,000, a deal was struck to build a community-owned fiber Internet network that would provide a dedicated fiber line connection to every home (as opposed to most fiber networks that have shared lines, slowing speeds).
The RSF Post followed the deal closely as well as the new Association Board’s decision to terminate its Letter of Intent (LOI) with Hotwire Communications last October. I am encouraged to know the new Board is still working to bring fiber Internet to the Ranch. However, there has been little discussion about why the first deal with Hotwire wasn’t compatible with what the new Board wants in a replacement deal.
Although the RSF Association has removed information about the Hotwire deal from the web, I reported on and saved almost all of the publicly posted material. Members can request any and all information related to the deal from the Board directly as well. Here’s a breakdown of the key documentation that was made available to the general public for those of you who are interested:
When the deal was first announced in April 2016, this is how it was explained to residents:
We keep hearing that fiber optic cable is coming to Rancho Santa Fe to improve our Internet service. Is that project still alive? When can we expect 1-gig Internet service?
After a year and a half of undertaking serious technical research, studying feasibility, reviewing proposals, giving presentations, and engaging in business negotiations, we have designed a project finance model with one of the leading “over-the-top” service providers in the country to make 1-gigabit Internet service available to every home and business in the community.
The best part is, unlike a traditional infrastructure investment, there is the possibility of structuring a deal in which we would get a return on our investment as an owner/partner in the project.
Additionally, we are looking forward to two more bonuses that could come out of the fiber project:
Improved cell coverage with additional options offered through a fiber backbone in the Ranch.
Improved infrastructure with the collateral benefit of of a long-term revenue stream and brighter financial future for our Association.
We have done a great deal of work since the initial public presentations by our outside consultants. The Technology Committee has spent considerable time discussing possible deal points and proprietary technologies. We look forward to bringing everyone up to speed on the technology and financial benefits of this project at a future public meeting. There will be many opportunities for member input and participation, so please watch for the upcoming notices.
A month later, the RSF Post talked to Hotwire’s representative just days after the board proudly announced it had signed the LOI with Hotwire Communications (Resolution #2016-104). The agreement contemplated a five-month community education and sign-up program followed by a vote allowing community members to decide whether to move forward with construction and full implementation of the deal.
However, elections for the Board of Directors took place during June of 2016, which resulted in a new board with new leadership and the education and sign-up effort never got off the ground. Instead, come October, the RSF Association Board informed the community that they had decided to negotiate toward termination of the Hotwire LOI without community input, bringing the fiber deal to an end.
Here is the presentation that was given to the Board prior to its unanimous vote to sign the LOI:
Here are the FAQ’s from the informational website that was launched to educate community members about the project:
Today, residents await a new deal that, according to the new board of directors, will be done “carefully and on budget.”
In the RSF Review, the Board’s newest member, Rick Sapp, recently expressed what the Board is looking for in a new deal:
The Technology Committee is moving full speed ahead to examine potential community-wide solutions to address the needs revealed in the survey. The Tech Committee has been investigating several approaches and key principles guiding the committee are:
- An underground fiber-optic backbone network of about 60 to 75 miles that would pass by every home and business in the Covenant,
- Fiber-optic connections from the backbone to the home or business capable of carrying 1 Gigabit-per-second broadband signal with the flexibility to offer up to 10 Gigabits-per-second for businesses or heavy users,
- Possible Association financing or capital to make the solution workable on economic terms, and
- Face-to-face interactions with prospective suppliers rather than using an intermediary consultant.
To begin the new due diligence process, the new RSF Association’s Technology Committee launched a survey asking members for their input on bringing high-speed Internet to the Ranch.
The survey found that about two-thirds of respondents were unhappy with their current Internet speed and 88 percent of respondents were interested in improved Internet service. These results reflect the same conclusions drawn from a similar survey that was conducted as part of the original feasibility study almost three years ago.
Rancho Santa Fe deserves an Internet network that provides reliable high-speed Internet access to the community and raises the value of our homes. The Board’s effort to get a new deal in 2017 is important to us all and I encourage everyone to stay informed about the exciting potential this project has to benefit the future of our community and our home values.