Chelan PUD, Citizens, Ponder Fiber Expansion in Rural Washington

The Chelan Public Utility District in Washington began its county-wide fiber-optic network build. They have since passed some 80% of the county but are temporarily pausing expansion efforts. Chelan is a rural county and the network is not expected to break even for quite some time.

In Washington, state law limits the powers of public utility districts to offer broadband. As with communities in Utah, these public sector entities are forced to operate an open access network and are unable to offer services directly. While the open access model is a great one for some communities (and one we encourage when the numbers work), it can be difficult to implement depending on local circumstances.

The Wenatchee World recently covered the decision to hire a consultant to identify means of lowering costs. The network has cost $80 million to get to this point and will require an additional $40 million to connect the remaining 15-20%.

The network can provide access to over 30,000 residents, businesses, and community anchors (schools, hospitals, muni facilities). Subscribers choose from a variety of service providers for services and take rates vary from 30%-60% depending on the area.

The network is operating at a loss (probably due to a combination of the high costs of FTTH in rural areas, the low take rates, and lower revenues from operating on a purely wholesale basis). Residents were conflicted about the network's inability to pay for itself but a majority have continued to support it because they often have no other broadband options. However, the current economic climate has resulted in more concern about the costs.

Chelan PUD has apparently covered the losses from broadband (as well as some sewer and water services) with the sales of surplus electricity on the wholesale market. Those prices are rather low right now, forcing the PUD to make some difficult choices.

Some residents are frustrated by the delays:

Sanders has already laid underground conduit for her own house and two of her neighbors’, following assurances from PUD staff that it would speed the installation process.

Another resident, Rachel Imper who lives on Brown Road, said she needs a fast Internet connection to exchange writing assignments that she works on from home.

She said she’s currently paying for an expensive satellite service. No other options are available.

The fiber expansion will pause at least until the consultant reports back this summer. At that point, the PUD and citizens will have to decide how to balance the need for broadband against its costs.

This is the real world - Chelan's PUD hasn't "failed" because it is not wildly profiting from broadband services like Comcast. It is providing an essential service - one that many locals would not have in the absence of the PUD.

The PUD has applied for stimulus funds to finish the network and the Governor supports their application [pdf]. Though Chelan seems the exact type of unserved and underserved that should be prioritizing, no one knows the likelihood of their application being accepted. If funded, all but 2% of the county will have fiber access.