RANCHO SANTA FE – In late October 2014, a group of private Rancho Santa Fe residents including Fred Luddy, Eoin O’Shea, and Todd Mikles, agreed to fund a feasibility study to determine the cost and return on investment associated with putting a fiber optic network in the Covenant that would deliver 1GB – 10GB internet speeds directly to every single home.
But unlike most privately financed feasibility studies, the funders are not keeping the findings to themselves.
For those not familiar with the hidden hardships of the rancheros, trying to log on to the Internet for some residents is like waiting for your sister to get off the phone so you can log back into your AOL account. And taking a cell phone call for others requires putting the recliner on the patio.
So, on Wednesday January 7, the President of Magellan Advisors John Honker, who specializes in managing community-backed fiber network installation projects, visited Rancho Santa Fe to discuss the preliminary findings of their feasibility study and to take questions from the Board.
The central focus of the presentation concerned the advantages of a community-owned, rather than private-owned, network. A few community residents including Mike Licosati, John Ryan, and Alex Kaiser joined all seven board members and acting Manager Ivan Holler. Also in attendance was the newly selected incoming Manager, Bill Overton.
Mr. Honker explained to the group that it was feasible to build, own, and expect a financial return on an investment into a gigabyte ready fiber-optic network in the Covenant. And, the network would be capable of providing broadband speeds at 100 to 1000 times the speeds of current services in the Ranch.
A community-wide WiFi network, Mr. Honker explained, would also enable high-speed wireless access for smartphones across the community.
Director Philip Wilkinson and President Ann Boon asked several high level questions concerning the pros and cons of Rancho Santa Fe Board building and owning the network themselves, rather than waiting on a major provider to consider it a financially sound investment.
Among other advantages, Mr. Honker explained that a community owned network could generate an on-going revenue stream from leasing network access through strategic partnerships with broadband providers who would then deliver end user services such as high-speed Internet, television, phone and others.
He went on to say that that the Board would be more responsive to community needs than a private investor, with no vested interest other than profit, when it comes to the School District having high-speed communications to support the latest educational technologies for students. Also, the network could be made available for community security systems, and to fulfill the residents’ demand for new technology.
Based on preliminary findings, a capital investment of at least $6 - 10 million will be required with a 9 – 12 year payback period. But members of the real estate community, for example, have estimated that the immediate impact on home values could be as high as 5%, which would, in effect, eliminate the payback period altogether.
The final study is nearly finished and will be presented to the Board in February along with recommendations concerning the proposed designs, management structures, and investment models.
An informational website for the project has been set up HERE.
MAGELLAN ADVISORS IS CONDUCTING A COMMUNITY SURVEY AS PART OF ITS FEASIBILITY STUDY AND NEEDS YOUR FEEDBACK. PLEASE TAKE THE SURVEY AS SOON AS POSSIBLE.