Last fall the Broadband Initiative Committee, supported by the Cook County commissioners, Grand Marais mayor and city council, Boreal Access board and Arrowhead Electric board, attempted to convince county citizens of the advantages of purchasing a 52 million dollar county-wide fiber optic system because federal grant money was available. In the process the voters of Cook County nearly overspent by about 38 million dollars on the proposed system.
The county’s Round One grant application was denied.
In the Round Two grant applications, Arrowhead Electric Cooperative is collaborating with Pulse Broadband on a 16.4 million dollar county-wide fiber optic system, providing similar services to the 52 million dollar system, with much newer technology.
According to Don Stead, CEO of Arrowhead Electric, Pulse Broadband will provide “preliminary engineering and design required for the grant request. It is at no cost if the grant is not funded. If the grant request is funded and Arrowhead elects to utilize Pulse Broadband the cost is funded by the grant. If the grant is funded and Arrowhead elects to utilize another firm’s engineering and design services the grant would pay the costs; however, Arrowhead would be required to pay Pulse $20,000 for developing the grant request.”
Should this Round Two grant application prove successful, AEC intends to borrow funds (8.2 to 10 million dollars) to match the federal grant.
Should there not be enough money earned through subscriber fees to make the proposed broadband service financially viable, Stead states in the Cook County E-Democracy Community Forum that “…the loans would need to be repaid with other funds otherwise a default would occur. Thesource of the other funds would most likely have a negative impact on electric rates” and that the (AEC) “membership would have to continue to pay the debt service until some type of relief could be developed and acted upon.”
Arrowhead Electric currently has loans totaling $14.9 million for its electric distribution business. Do AEC members wish to assume another 8-10 million dollars in debt? Possibly increase their current monthly flat rate for electric service…which is already 50% higher than it was three years ago…to fund the county-wide infrastructure to provide fiber optic TV, phone and internet service?
Be aware, AEC members, you won’t be able to vote on it this time…the Arrowhead CEO and board of directors will be making that decision for you.
Bob LaMettry
Pike Lake Road
Grand Marais
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