Philip Wilkinson is a RSF Association Board Member & Technology Committee Member
The potential for the Rancho Santa Fe Association and Hotwire to build a high-speed, high capacity fiber-to-the-home infrastructure and to create the most connected community in the country is a big deal. In fact, the Union Tribune already recognized this deal as a model for responsible negotiation that could lead the way for other municipalities that may want to offer a better internet deal for their residents.
We have spent more than a year working on a fiber-to-the-home infrastructure that will support the needs of our community now and well into the future thanks to the collective experience of the Rancho Santa Fe Association Technology Committee, our internationally recognized consultant Magellan Advisors, our legal counsel Peace & Shea, and some of the top fiber systems design engineers and communications experts in the country. This world-class fiber-to-the-home connectivity will be the gold standard. Further, it will provide a return on the community’s investment.
As a Technology Committee member, a Board member and a 25-year member of the Association, I am very excited about bringing the fastest internet service to every home and business in the Covenant. The network, owned by the Association, will provide every single home in the Covenant with access to up to 10 Gigabit internet service, as well as optional high-definition television packages, home phone, and other services such as security.
Today, no provider currently serving the Covenant provides coverage to all homes and businesses. Residents who want broadband internet pay highly variable costs of up to $20,000 to get connected, depending on their proximity to available providers. Some residents have no access to a high-speed broadband connection at all. That’s all about to change.
A fiber-to-the-home network will future-proof our broadband and technology needs, offering internet speeds of up to 10 Gigabits (up and down), making the Ranch one of the most connected communities in the world. These speeds are over 1,000 times faster than most internet services.
As technology continues to change rapidly, the need for a higher capacity, more reliable and faster broadband connectivity will grow. Whether you are interested in faster internet service, home security applications, home automation, virtual healthcare applications, enhanced cellular phone coverage options, rich media or ultra high-definition TV, there will come a time in the near future when we will need 10 Gigabit connections.
Even if none of these services interests you, the value of each and every home in the Covenant will increase by virtue of having a fiber-to-the-home network. We’ve seen this demonstrated in other communities, such as Austin and Kansas City, that have access to fiber connectivity.
The project is innovative and trailblazing as RSF Association is not just a customer of Hotwire but is also a partner. The Association will own the underground fiber network and the electronics required to provide access to every home and business in the Covenant. Hotwire will manage the network on behalf of the Association and will provide internet, television, telephone and other services, as well as customer service and support. Additionally, the agreement with Hotwire includes a Service Level Agreement, allowing us to ensure high-quality service. By investing in the network, the Association will maintain rights and controls in its partnership with Hotwire to ensure that the best possible services are being provided at competitive prices. Further, the Association can reduce the cost of services and/or otherwise reinvest the proceeds back into the community if the project produces higher revenues.
The Technology Committee and Board believe that any expenditures required to upgrade the Covenant’s broadband infrastructure should be treated as an investment rather than a payment used to finance a provider’s own business. Responses to the RSF Association’s Request for Proposals and Qualification (RFPQ) that recognized this goal were favored over those that did not. Hotwire’s proposal was one of the only proposals that treated the Association payments as an investment, and the only proposal to include provisions for us to recoup this investment through a revenue sharing.
An incumbent provider in the Covenant submitted a proposal to build a network comparable to Hotwire’s proposal. Contrary to this provider’s recent public statements, its proposal required that “The Association fund 100% of the $14.4 million expense associated with building and deploying such an infrastructure. After which [the provider] would own, operate and maintain the system.” The Association rejected this proposal during the first round of negotiations because of its failure to meet the basic RFPQ requirements.
While we have selected Hotwire, we are not requiring our members to participate. We think the vast majority of homeowners will sign up with Hotwire to bolster their own internet speeds and their home values, but they would not be required to. Members may continue to use their current internet, TV, and/or home phone service if they so choose.
Why fiber? Fiber-to-the-home is the only broadband technology that provides:
- The highest speed internet service, up to 10 Gigabits today
- The same speeds for both uploads and downloads
- The longest life cycle and greatest opportunities for future upgradeability
- More flexibility in the types of applications that can be delivered to our community
- Solutions for the improvement of cell phone coverage
- A demonstrable impact to the value of homes and property value
Coaxial cable and DSL services are inferior technologies to FTTH because fiber has 10 times the carrying capacity of most current coax and cable internet systems. RSF Association’s fiber network will provide 10 Gigabit capacity to homes whereas today coax provides only up to 1 Gigabit. Although 10 Gigabit may not be required today, it very likely will in the future. Coaxial cable does not deliver equal upload and download speeds. Unlike fiber, coaxial cable is more distance-sensitive; the longer the distance, the lower the speed. Finally, coax and DSL do not provide long-term scalability in terms of speeds and capabilities when compared with fiber.
We know the infrastructure must be 100% fiber optic cable underground. Contrary to what you may have heard, upgrading a coax plant to support Gigabit speeds is not as simple as “turning a light switch.” A high-quality coax plant is required to achieve true gigabit speeds, otherwise speeds will degrade significantly. Fiber has a much longer economic life than coax and a longer technology life cycle. Fiber-to-the-home networks routinely utilize 25- to 30-year depreciation schedules. Equipment upgrades on fiber to support higher speeds are substantially lower than on coax networks. A recent study conducted by the University of Colorado at Boulder determined a 3.1% increase in a home’s value due to the availability of fiber. No direct home value appreciation has been established with coax.
The Association is not committed to the full $13.5 million investment until approved by a community-wide vote. We are starting our community outreach and education campaign so that our members can make an informed vote. The campaign will also enable residents to sign up, thereby “de-risking” the project before the community-wide vote is taken. To substantially de-risk the project, about 1,200 homes and businesses need to pre-subscribe.
How can you help us bring this state-of-the-art technology to our community? Please go to RSFCommunications.com and express your interest in becoming part of the most connected community in the country. The Covenant of Rancho Santa Fe will be light years ahead because of your support!