A public-private partnership between the Grant County Digital Network Coalition and Oregon Telephone Corporation, and a plan for phased expansion of broadband internet service south from John Day to Burns, were unveiled by John Day City Manager Nick Green May 8.
After nearly two years of private negotiations with Ortelco, a memorandum of understanding is being drafted to explain the relationship between the coalition, composed of John Day, Grant County and Seneca, and the local internet provider and telephone company, Green told the city council.
“Ortelco is excited to be able to continue to do what we do best, which is to continue to offer service to outlying areas comparable to our existing service areas,” Ortelco General Manager DeeDee Kluser told the Eagle. “We look forward to opportunities ahead.”
Green announced the news as the council prepared to vote on a resolution authorizing an application for a U.S. Department of Agriculture Community Connect grant worth up to $3 million and requiring a 15 percent match.
According to the resolution, the city would use a portion of the $1.8 million in broadband funding it received from the state last year to pay the $450,000 match required by the federal grant. The council unanimously approved the resolution.
Green told the council he didn’t want to see the entire $1.8 million in state funding spent in one shot running a cable the 70 miles from the fiber backbone in Burns to John Day. Instead, he wanted to use the state money to leverage additional funding for the network in three phases.
In Phase 1, a fiber backbone would be run from John Day to Seneca, with laterals connecting homes and businesses along Highway 395. A fiber cable would be run to the Fall Mountain Communications Tower, and broadband service would be provided to the Swick Old Growth Interpretive Site and the Starr Campground on the Malheur National Forest.
In addition, broadband service would be provided to the city hall and post office in Seneca. The community will be undergoing significant water and sewer infrastructure improvements in the next three years, and fiber-to-home connections could be completed as part of those projects.
About $1.3 million in state funding would remain after Phase 1 and could be used to leverage additional funding for Phase 2, in which the fiber backbone would be run from Seneca to Burns, Green told the council. After that, the network could be expanded east, west and north from John Day in Phase 3.
Kluser told the Eagle that Ortelco has sufficient fiber backbone and employees to absorb the needs of the 100 new customers expected in the Phase 1 area. Details on Ortelco’s role in running fiber to Fall Mountain, Forest Service campgrounds and homes in Seneca were not known at this time, she said.
As for Phase 3, Kluser said Ortelco would continue to look at ways to expand service to outlying areas in Grant County, including Long Creek and Monument.
The company continues to plan for expanding service in the John Day area, including the industrial park area near the airport and the Edgewood Drive area east of Canyon City. Kluser said Ortelco budgets for expansion a little bit at a time each year as finances allow.
The goal is to have the Grant County Digital Network Coalition own and operate the fiber backbone and have Ortelco be the internet provider to the end user, Green told the council. He wanted the coalition to be in the wholesale business, not the retail market.
Much of the plan rests on the coalition being awarded the federal grant. Green noted that the USDA will be impressed that the coalition can cover the $450,000 match with about $1.3 million leftover and by the strength of the team the coalition has put together.
The team already included Fiber Channels Inc., which will negotiate with internet service providers for access to the fiber backbone at Burns, and Commstructure Consulting LLC, which will provide infrastructure design and project management.
New to the team are CTC Technology & Energy, which has specialized in broadband financial analysis and network strategic planning since 1983, and the Cohen Law Group, which specializes in telecommunication and broadband matters.
According to the city’s grant application resolution, Grant County ranked second highest among Oregon counties on the Digital Divide Index produced by Roberto Gallard at Purdue University. The Digital Divide “is the number one threat to community economic development in the 21st century,” the resolution states.
Difficult terrain and small remote communities in Eastern Oregon present financial hurdles to internet providers. As a result, major internet cables are routed along U.S. highways 97 and 20 and Interstate 84 — basically circling around Grant County, Green told the city council.
The Grant County Court approved a letter in support of John Day’s Community Connect grant application April 25. The court ratified creation of the Grant County Digital Network Coalition through a second reading May 9 on a 2-1 vote, with Commissioner Jim Hamsher opposed. A March 28 vote to create the coalition required a unanimous vote because it was an emergency ordinance, but Hamsher had voted in opposition.
Hamsher also asked to be appointed to the coalition board, but Grant County Judge Scott Myers noted that the board’s two at-large seats must be filled by the three current board members, which represent John Day, Grant County and Seneca.
Myers said the plan presented by Green should put to rest concerns that the county was competing with the private sector by participating in the Grant County Digital Network Coalition.