News
Rock Springs and Green River, Wyoming mull $31 million telecom network
A $31 million, publicly-owned fiber optic system proposed for Sweetwater County would provide the cities of Rock Springs and Green River a state-of-the-art telecommunications network, proponents of the proposal said during a meeting Monday night.
By JEFF GEARINO Southwest Wyoming bureau
The proposed Southwestern Wyoming Enhanced and Expanded Telecommunications (SWEET) system would attract new businesses to the area, would support high-bandwidth services on a wider basis and at a lower cost, and would eventually provide additional income for the two cities, officials involved in the project said during a public meeting in Rock Spring, supporters of the proposal said.
But opponents questioned the use of taxpayers’ dollars for the project and said if an expanded telecommunications network is necessary, it should be funded and built by private industry.
"I’m a great believer that when the need is there, private industry can do it … I’d hate to see you get mixed up in this," warned longtime Rock Springs rancher Leonard Hay.
The cities of Green River and Rock Springs joined together in 2001 to form the six-member Joint Powers Telecommunications Board (JPTB) after recognizing the need for enhanced telecommunication services, board chairman Steve Shea said.
"The situation in Green River and Rock Springs is similar to the rest of the country … the need for high-bandwidth is there, but the support infrastructure is not adequate to get to the next level of high-speed data transmission," Shea said. "We think this is something that’s going to be very useful for the two communities."
The board hired a consultant, US Metronets, L.C., to complete a feasibility study on the project, which was released last week for public review. The study includes a business plan for the delivery of services via an Open Service Provider Network model.
Currently, no bandwidth providers in the two cities are capable of providing universal, high-speed bandwidth connections, said Joel Zimmerman, consultant for US Metronets.
The total cost for the project — including building the initial facilities and running cable to businesses and residences — is estimated at $31.5 million, according to the study.
Zimmerman said 75 percent of the project would be funded by revenue bonds issued by the JPTB and 25 percent from two private industrial partners.
Revenues generated from the operation will pay for the construction and operation of the network.
The study projects the network would have an initial 50 to 70 percent market penetration. By the tenth year, SweetNet would be generating approximately $7.3 million in gross annual revenues.
In order to secure initial financing, however, Zimmerman said the JPTB will need to obtain funding commitments, or loan guarantees, from the two cities.
"The cities will be asked to come up with $750,000 each in backstop collateral for the joint powers board … but the business plan projects no spending of those dollars," Zimmerman said.
Shea said the two cities have already spent close to $360,000 for the initial phases of the project, including surveys and the feasibility study.
"I’m very concerned … this should have come before the voters before that $360,000 was spent," Hay told boardmembers during Monday’s meeting.
Resident Paula Wonnacott worried the board could be stuck with a huge bond debt if the cities don’t generate enough revenue from the system.
"The system itself has to be paid for no matter the number (of service providers that sign-up) … it will be taken on for the next 20 years," Wonnacott said. "Somebody has to pay off that bond indebtedness, but you’re building a system and you don’t have any providers on yet."
Sweetwater Cable TV owner Al Carollo also criticized the board’s business plan and the study’s user/demand projections. Zimmerman estimated that five out of seven city residents would eventually be using the network.
"The only way for this thing to succeed if for you to take 50 percent of our customers and Qwest’s customers … that’s your business plan," Carollo said. "Don’t make us compete with government dollars."
Rock Springs Mayor Tim Kaumo said the city will eventually have to determine what the need for the proposed network is and what kind of financial risk the community wants to take before making a decision on the project proposal.
"We have to put that ($750,000) up to guarantee the bonds … it will and has taken taxpayers dollars and I’d hate to see you mislead the community," Kaumo told the consultants. "We have to understand how much (financial) risk there is and determine are we willing to take that risk."
A second public meeting is scheduled for tonight in Green River at 7 p.m. in the city council chambers. The feasibility study can be accessed on the board’s website ( http://www.sweetnet.us ).
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