Powellink contract final, fiber-optic network officially complete

Posted 9/15/09

“I appreciate the patience and understanding of the community,” Logan said.

He noted that all the remaining clean-up that was brought to the city's attention was finished. Earlier this month, MidStates Consultants, an engineering firm …

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Powellink contract final, fiber-optic network officially complete

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After years of planning and months of finalizing details following construction, Powellink is officially finished.“I've been waiting a long time to say this: The fiber project is done,” City Administrator Zane Logan said.Though construction on the citywide fiber-to-the-home network finished last January, the contract wasn't final until all the clean-up was completed. During construction, lawns and sidewalks were torn up, and the city tracked all of the repair requests around town.

“I appreciate the patience and understanding of the community,” Logan said.

He noted that all the remaining clean-up that was brought to the city's attention was finished. Earlier this month, MidStates Consultants, an engineering firm that managed the overall project, signed off on the project.

“We're officially done,” Logan said. “Now the warranty starts.”

Construction costs were negotiated to $3.4 million, and $112,000 in liquidated damages was subtracted from that figure to bring the cost to the budgeted amount of $3.3 million, Logan said. MasTec Inc., the project's general contractor, was responsible for the additional $112,000 in charges for going over the timeline specified in the contract. The company was charged around $1,780 for each day that was past deadline.

“All in all, I think it was very fair,” Logan said. “The final contract for the project was fair to all parties, quite frankly.”

Now that the project is officially completed, Logan said he hopes Powell benefits from the network.

“I hope the community will see the value of the system,” Logan said.

Some businesses are already seeking Powell for its broadband capabilities, Logan said.

Under a 20-year contract signed in March 2006, the $4.9-million revenue bond project is a joint venture between the city of Powell, the Northwest Joint Powers Board and a number of private-sector partners.

In spring 2006, the city of Powell paid $125,000 to US MetroNets to develop the citywide fiber-optic system.

However, that was a one-time fee and was paid back in 2008 when private investors funded the project. The city pays toward the bond only money that is generated from the network and not from its general budget fund.

After the 20-year bond is paid off, Powell will own the network. Until then, official ownership is retained by the investors, but the city has decision-making control.

Since the network's completion, TCT West has paid to rent the infrastructure and provide Internet, phone and television service. That money goes toward bond payments, said TCT General Manager Chris Davidson.

As agreed upon in 2006, infrastructure rental fees are roughly $54 per household for the three fiber services. If a household only receives telephone service, then TCT pays roughly $17 to rent Powellink. The rental fees depend on the service package and vary, Davidson said. “It depends on the video package they have or the bandwidth,” he said. “The higher the bandwidth, the more we pay to rent it.”

When the contract was negotiated a few years ago, TCT's goal was to provide service to 30 percent of households, and Davidson said current subscription figures are on track to meet that goal.

“We're not at 30 percent yet,” he said. “But TCT always anticipated it would take two to three years to surpass 30 percent, and we're on track for that.”

TCT has exclusive rights to Powellink for the first six years, but by January 2015, it will be open to competitors as well.

Powell city councilmen said they've heard positive things about the network. However, several noted that users have trouble with the operating system.

“The only complaints I've heard have been from people who have difficulty using the remotes and system,” Councilman Don Hillman said.

TCT invested in a new operating system that will address those concerns and provide new capabilities. Davidson called it more intuitive, and said customers will see updates in the near future.

TCT also is working on creating a fiber-to-the-home system in Cody. Unlike Powellink, Cody's network is funded, owned and operated by TCT.

The $12-million project began last spring and will take about 20 months to complete, depending on the weather, Davidson said.

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