When I built my home three years ago, the Rancho Santa Fe Association (RSFA) was completing the build out of the infrastructure for a fiber optic network called RSF Connect. I had my general contractor run conduit from the street to my home ready for fast internet and television streaming. However, Race Communications informed me that their TV lineup was rather limited, and I would need to subscribe to a cable network for sports and entertainment channels. Disappointed, I called the Association who referred me to Phil Trubey who was involved in the selection of Race as the Ranch’s new internet provider.
Mr. Trubey told me what a great internet provider Race was, and having previously been in the technology industry himself, he assured me that Race was the best selection. I put this to rest and subscribed to Directv for my cable television and Race for my internet.
Content and Cost Loser
Over the last three years, Directv raised my monthly costs twice, so I contacted Spectrum to inquire about the possibility of using their services instead. This led me to question why we as a community seem to be stuck with Race Communications even though their offerings do not compare in content or cost to the two major providers in our area – Cox and Spectrum.
I knew that the Association diverted 2.5 cents from every dollar of member assessments to build out the fiber network infrastructure in preparation for a communications provider. It has been about four years now since Race began providing service to what are now 1200 subscribers to their internet service. One of the benefits of building out and owning our own infrastructure was that we would be able to negotiate a more favorable contract with the communications provider who would then install their equipment and bring in goodies like fast internet, phone, and sports and entertainment channels.
Project Bidding Fail
I wondered how the Board and its Fiber Communications Committee selected Race Communications to be the sole provider of internet and TV services for the Ranch with so few entertainment and television options? Were any other providers given an opportunity to bid on the project?
I recently contacted John Coulson of Spectrum Communications who said they were approached about building out our fiber communications infrastructure and providing complete service to our community, but once the decision was made to build out our own infrastructure, our Board representative never reached back out to them. Mr. Coulson did tell me that the cost of internet service would have been approximately between $40.00 to $50.00 per month compared to the $138.00 that Race was charging for the first three years and still less than the $73.00 a month that Race is currently charging. Additionally, the cost of cable TV service would be much less than anyone is paying to Race or one of the satellite providers. Plus the Spectrum entertainment lineup would be far superior to what Race offers.
Contract Confidential
I also reached out to Hans Rhey at Cox Communications who told me no one from the Association ever approached them about being the community’s communications provider. He informed me that they once provided service to a home on my street and would have been interested in bidding on the communications service for Rancho Santa Fe. Both Cox and Spectrum indicated to me that they would be willing to consider buying out the contract from Race and making the Association an offer.
I set out to see about the details of our contract with Race and wondered if there would be an opportunity to negotiate a better one with another provider with more services. I again reached out to Phil Trubey and requested a copy of the contract. He told me that HOA contracts are confidential and refused my request, chiding me for my interest in the details.
Troubling Questions
“Why are you investigating this? I would recommend you put your name in the hat to join an Association committee if you want to help the Association,” Mr. Trubey said. “There is plenty of stuff to do. Chasing down what happened five years ago isn’t productive for anyone nor helpful,” he added. While contracts in the negotiating stage are confidential, once they are inked, they can be available for all members of the HOA to read.
I have several questions. The most troubling is: Why weren’t these two providers considered? Was there even a bidding process? Do any of the previous or current Board members have a financial or personal interest in Race Communications? And how did this relatively unknown company land such a lucrative contract with the Association? Considering the fact that we own the infrastructure, one would think that we could have negotiated a much better contract than the current one committing us for 10 years. Although it’s hard to know since we are not allowed to see it.
Millions of Dollars Lost
Some Board directors might argue that since we elected them, they should be able to do their job without members looking over their shoulder. But after four years of misbehavior, a little oversight could have saved millions of dollars for us, and I imagine sleepless nights for those misbehaving.
The bottom line is, we should look into the possibility of assessing other communications providers since it appears there are companies who offer superior programming and perhaps better pricing compared to Race. But it’s hard to know since it appears they were the only bidder.
Philip Shapiro is a Covenant member.