By Malcolm Butler
Ruston Mayor Ronny Walker said Monday that the city sent out a Request for Proposal (RFP) late last week in order to solicit bids to sell the City’s internet fiber and all of the assets associated with the system.
Walker said that the city got into the fiber business in 2009 when they began offering it to commercial businesses. Now the city owns a system that includes 136 miles of fiber either underground or on poles, a very “valuable asset.”
After servicing businesses for around a decade, the city conducted a study about four years ago that showed a tremendous demand for internet options for residential areas within Ruston. However, a few months after the completion of the study the federal government began offering billions of dollars nationally to run fiber to every home.
Thus with that federal funding on the near horizon, Walker said the city has decided it’s time to get out of the internet business.
“The feds started coming out with all of this money for fiber throughout the United States,” said Walker. “The State of Louisiana is getting over $2 billion to provide internet to every home in our state. This changed the whole landscape.”
So with the impending influx of federal dollars coming from Granting Unserved Municipalities Broadband Opportunities (GUMBO) and Broadband Equity, Access, and Deployment (BEAD) grants and the impact that it will have on the internet market within Lincoln Parish and the entire state, Walker said the decision was made to put the city’s plan in reverse.
Walker said state officials have said that the $2 billion will be more than enough to get fiber into every home in the state.
“So we immediately pulled out of that idea and started looking at what we were going to do,” said Walker.
That decision entails trying to sell the internet system, thus Walker said the city hired a company to evaluate and provide an appraisal of what it is worth, a system that includes 192 strands of fiber.
Walker did say that when the system was originally built, the city had an agreement with Nexus Communications out of Monroe which was then absorbed by Hunt Telecom which was absorbed by Unity. Unity has the right to utilize half of those 192 strands to provide internet service to any Lincoln Parish school that is part of the BESE Board.
Walker did say that that aspect of the agreement was being discussed as the city looks to sell the entire system.
He said that although the RFP was just sent out this past Friday, the city has already had “quite a few” suitors, putting the number between one and two dozen.
“We are looking to sell all assets that are in place,” said Walker. “The fiber. The switches. Everything that is located within that system, plus any equipment that we have sitting in our warehouse, like additional fiber. We are getting out of the fiber business.
“I am a firm believer that if we can’t be No. 1 or No. 2 in a business, then we need to get out of it. Fiber is not our strong suit. We don’t have the (manpower). We depend on contractors. Before the government got into it, we were in pretty good shape. But when the government started throwing out hundreds and hundreds and hundreds of dollars to provide fiber throughout the state, we backed off. It’s a whole different ball game now.”
So what happens to area businesses who currently depend on the city’s fiber system? Bill Carter, legal counsel for the city of Ruston, said the RFP protects those interests.
“The is simply a request for a proposal,” said Carter. “It simply says, ‘Hey, if you are interested in acquiring our system, you can make us a proposal.’ But it’s a very structured document to here is the criteria that we are going to use. It’s all in the RFP. These are the things that we think are important.
“One of them is the price, but it’s only 20 percent. What can we do with this system to benefit our customers. We don’t know what the proposals are going to say, but we are going to look for somebody that is going to take care of the customers.”
The Criteria and Scoring in the RFP includes:
A. Acquisition Price Offer (20%)
B. Experience in Providing Telecommunication Services to the Public (20%)
C. Financial Stability and Legal Structure (20%)
D. Business Plan for Maintaining and/or Expanding Local Fiber Services (15%)
E. Retail Price Structure (15%)
F. Planned Network Configuration (5%)
G. Customer Service Plan (5%)
Officials said the sale would include a plan for the city to continue to use fibers for communication between its buildings and substations.
“We want the same connectivity that currently exists, plus more,” said City of Ruston IT/Telecom Director Dusty Hampton. “That’s our goal.”
Hampton also said that by the time the $2 billion is utilized throughout the state, the hope is that not only does it benefit those who don’t have internet now, but also those who have it but aren’t happy with their current provider as additional companies move into this area.
“The FCC differentiation right now is between unserved areas and underserved areas,” said Hampton. “Ruston is technically served. You can get internet at every address in the city. But Ruston is definitely underserved. The rest of Lincoln Parish is unserved. A lot of these companies are applying for federal funding, and they are getting Lincoln Parish.
“When they get a map they start looking at Lincoln Parish and say ‘where do we want to start spending this money?’ Well Ruston, but Ruston is already served. But everything around it is not. So all these companies that want to compete in Lincoln Parish, where would they start their system? Right here in Ruston. So it could take us from underserved to completely served. Then it gives a backbone that literally runs a ring to go straight out to all your unserved areas. So it makes it a prime spot. So this system (that we want to sell) is a dream-come-true for all these companies.”
RFP Schedule
February 9 – RFP Issued
February 22 — Pre-proposal Conference
March 7 – Deadline for receipt of written inquiries
March 14 – Deadline to respond to written inquiries
March 28 – Deadline for receipt of proposals
Week of April 15 – Oral presentations
April 29 – Announcement of selected proposer
May 30 – Contract document execution
