In the case of muni systems, which are not-for-profit enterprises, one measure of “success” is defined as the level of their “take rate” – that is, the percentage of potential subscribers who are offered the service that actually do subscribe. Nationwide, the take rates for retail municipal systems after one to four years of operation averages 54 percent. This is much higher than larger incumbent service provider take rates, and is also well above the typical FTTH business plan usually requiring a 30-40 percent take rate to “break even” with payback periods.
Chelan Public Utility District To Restore Fiber After Storm Damage
In the week before Christmas, Mother Nature sent a powerful winter storm to Chelan County in Washington. Hundreds of trees along the south shore of Lake Wenatchee came down, causing extensive electrical and fiber outages. According to the Chelan PUD, most electrical customers have had power restored, but Internet, phone, and TV services dependent on the fiber are still out.
Readers will remember that the PUD held a series of community meetings this past summer to get public input on the future of the fiber optic network. The network suffers from heavy internal debt and, while customers appreciate the service, most opposed increasing electric rates to build out to reach more cusomters. The PUD decided to keep the network as is with no major expansion.
Following the storm, the PUD announced that it would not rebuild the fiber network due to the heavy replacement cost of up to $750,000. Officials planned to replace the fiber line with a wireless network that would cost between $175,000 and $225,000. Only a small percentage of the homes on the lake's south shore are occupied year round.
According to Christine Pratt of the Wenatchee World, the decision rankled residents who have come to depend on the fiber for more than just email. There are more than just a few property owners who run businesses out of their homes. The wireless option was not well received:
“A lot of people up here think that we’ve been thrown under the bus,” says longtime resident George Wilson, one of many south-shore residents who lobbied for years to get the PUD to put the fiber in. “I’ve never, ever seen a utility just walk away from an established, essential service. Wireless is a huge step backward.”
Bob Hooson runs an employment recruiting businesses from May to October from his Lake Wenatchee home. He spends winters working in California.
"I'm on the Internet all day," he said. "Our business requires pulling a lot of resumes down off the Internet and communicating with a lot of people at once. I'd be dead in the water without it. We have built our business based on the fact that we have fiber technology available to us. Wireless is not fast enough."
"I just hope they make it right," says Dr. Gary Bell, a Seattle dentist with strong Wenatchee ties who does contract forensic work over the Internet from his lake home. ... "I've never heard of the PUD coming in, giving service and then taking it away. It totally changes our life here. I think we deserve the services as much as anyone. We're ratepayers, too."
After further consideration and public input, the Chelan County PUD has decided to scrap the wireless plan and rebuild the fiber network. The PUD announced the reversal on its website just days after its announcement to put in wireless. Citing the tree-filled terrain, the needs of customers, and the time needed for an assessment on a wireless network, the PUD decided the fiber was just too crucial to the area.
As the Chelan County PUD has no legal obligation to restore the fiber, you have to wonder what a national provider would have decided to do. As with prior decisions, the Chelan PUD took the desires of its customers into account. The decision to restore service was made based on what is best for the community, not because it served the short term interest of shareholders.
Like other local community owned networks across the country, Chelan customers' have the advantage of receiving service from an agency that is accountable to the people it serves.