May 18, 2012

In This Issue

Meetings and Events

MTA Updates

>> From the President

>> Senate Confirms FCC Nominees

>> Monticello's FiberNet Warns Bond Holders as Losses Mount

>> ARRA projects About to Get Scrutinized by Congressional Subcommittee – Including Lake County

>> Manage and Reduce Your Stress

People and Companies

>> Daryl Ecker of Park Region Telephone & Otter Tail Telcom Retires


MTA Staff

MTA President/CEO:
Brent Christensen
Team Leader:

Jacquie Jaskowiak
Meeting Planner:
Julie Cygan
Member Services:
Chris Swanson
Website/Newsletter:
Janey Duntley


June 11-13, 2012: 2012 MTA Fishing Outing

July 9, 2012: 2012 MTA Golf Day

August 22, 2012: 2012 Telco Marketing Peer Group Summer Conference

October 4-5, 2012: MTA 2012 Fall Industry Showcase


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FROM THE PRESIDENT:

Over the past few weeks I have been tasked with sending e-mails to the membership that no one ever wants to write. What made them so hard to write is the fact that they are family. We may not have known them, or even their parents, but they were still part of our family. The telecom industry in Minnesota has evolved over the past 103 years into a close knit group that has dared to claim the term. I believe it is our greatest strength, which is why it hurts so much when you see members of our family in pain. Like all families, we may disagree among ourselves, but all of that is forgotten when one of us is hurting.
 
Because I was traveling without my laptop late last week, I was unable to pass along more sad news. Rich Sellnow, a Central Office Technician at CTC, lost his 28-year-old son on May 6. Rich has been in the industry for many years, working at a few different MTA member companies. Our hearts go out to Rich and his family at this most difficult time!
 
I have received many calls from MTA members wanting to know what they can do for these families. The loss of a child never goes away. You would be surprised how far a hug goes, or something as simple as telling them that you have been thinking about them or saying a prayer for their family. Whether it is next week, next month, or next year, your thoughts and prayers will make a difference!
 
Words cannot express how proud I am to serve this industry in this state. You can judge the true character of an individual or group by how they react to bad situations. This industry has shown the true character of the wonderful people that make it up with all of the support you have given, and continue to give, to fellow members when they have needed it most.


INFORMATIONAL ITEMS
:

Senate Confirms FCC Nominees

On May 7, the United States Senate confirmed two Obama nominees to the Federal Communications Commission. Republican nominee Ajit Varadaraj Pai of Kansas, and Democrat nominee Jessica Rosenworcel of Connecticut had been nominated by President Obama in 2011. Their nominations were held up by Senator Grassley (R-IA) as part of his efforts to gain more information about LightSquared from the FCC.

"While we certainly respect and applaud Senator Grassley’s efforts to gain more accurate information about the effect of LightSquared on the current GPS network of devices, we need five Commissioners at the FCC”, commented MTA President/CEO Brent Christensen. "There are too many unanswered questions about the future of telecommunications to be left in the hands of just three Commissioners.”

Monticello's FiberNet Warns Bond Holders as Losses Mount

From Freedom Foundation of Minnesota

The City of Monticello has put bondholders on notice that the municipal broadband network once hailed as a national model is unable to meet its financial obligations with revenue generated from FiberNet Monticello customers. Instead, city leaders now will discuss how to restructure payment of $26 million in revenue bonds to save the faltering broadband network.  
 
A financial report prepared for the Monticello City Council meeting on May 14 acknowledges that FiberNet "continues to operate at a loss. For the quarter, FiberNet lost around $100,000, not including its 2012 debt payments.”
 
A blunt letter sent to Wells Fargo Bank in March indicates the City does not have an obligation to continue making up the losses incurred by FiberNet. "Revenues of the System are not sufficient to pay both operation costs and debt service payments on the Bonds,” Jeff O’Neill, city administrator wrote. "The City has no obligation to make supplemental payments and is considering whether to continue making supplemental payments after June 30, 2012.”
 
At current rates, the city projects that FiberNet’s red ink will climb to $2.1 million for 2012 with the inclusion of June ($882,668) and August ($943,670) debt payments on the once highly touted network. Meantime, the total number of customers for the video, phone and broadband services offered by FiberNet remained flat —3,484 subscribers, one more than the previous reporting period. While Monticello is considering implementing additional steps to improve its bottom line, "none of the potential changes are likely to result in sufficient Net Revenues in the near term to fund required debt service payments,” according to the letter to Wells Fargo Bank.
 
In March the Freedom Foundation of Minnesota reported that FiberNet ran a $2.6 million loss in 2011 with cash from the profitable liquor store enterprise fund used to subsidize operations. Some city officials have raised the issue of alleged "predatory pricing” by private providers as a factor in FiberNet’s failure to capture more subscribers. From the outset, the city said its triple play service would be priced 15 percent below the competition.  
 
FiberNet bonds are currently being traded on the market at approximately 32 percent of their initial issue price, Electronic Municipal Market Access (EMMA). In the last five weeks, FiberNet bonds have lost about 50 percent of their value. A proposed call with bondholders set for the end of March was postponed temporarily, but is expected to be rescheduled. "The City is interested in engaging in discussions with Bondholders regarding a possible restructuring of the Bonds. Development of a restructuring plan is likely to have a bearing on whether the City determines to continue supplemental payments,” according to O’Neill’s letter. 
 
FiberNet Monticello’s $26.4 million in outstanding bonds contributes to total city debt of $55.1 million, a debt of about $4,600 per resident of the Twin Cities suburb. The city’s financial report acknowledges that the per capital debt is "high for a City of our size” but "does not mean the City is in bad financial health.”
 
FiberNet Monticello is closely monitored by those in the telecom industry and local government, due to the publicity and expectations that accompanied the network’s debut.

ARRA Projects About to Get Scrutinized by Congressional Subcommittee – Including Lake County

From Blandin on Broadband

The ARRA Broadband project is getting called to the principal’s office. Tthe Subcommittee on Communications and Technology announced a Hearing on Broadband Loans and Grants.

Here’s the situation as stated in the Subcommittee memorandum…

More than three years after the American Recovery and Reinvestment Act of 2009 (ARRA) allocated $7.2 billion for broadband grants and loans, the jury is still out whether taxpayers are getting their money’s worth. Despite claims of ARRA projects being "shovel ready,” recipients of 233 National Telecommunications and Information Administration awards worth $4 billion have spent just $1.6 billion of it so far. Less than a dozen of the projects have been completed. Six of the awards worth $124.5 million have been returned or revoked. Recipients of 320 Rural Utility Service Awards worth $2.4 billion have spent $968 million. Five projects have been completed. As of July 2011, $124 million in grants and $35 million in loans have been rescinded or revoked. Allegations also persist that NTIA and RUS funds are not bringing broadband to unserved areas but instead are subsidizing competitors to overbuild privately financed networks.

Here are the numbers:

NTIA
Budgeted $4 billion
Spent $1.6 billion
Revoked $124.5 million
11 projects completed

RUS
Had $2.4 billion
Spent $968 million
Revoked $159 million
5 projects completed

Congress is convening a panel of experts to talk about what’s happening, the panel includes:

  • The Honorable Larry Strickling, Assistant Secretary for Communications and Information and Administrator, NTIA
  • The Honorable Jonathan Adelstein, Administrator, RUS
  • The Honorable Todd Zinser, Inspector General, U.S. Department of Commerce
  • Mr. David Gray, Deputy Inspector General, U.S. Department of Agriculture

Causes of Current Problems

Telecompetitor notes that there are some extenuating circumstances that have made finishing projects more difficult…

The telecom industry has cited several factors (not mentioned in the memo) to explain the apparent spending slowness such as an often long approval process for environmental impact studies or a shortage of fiber cabling that resulted when the April 2011 tsunami took a key vendor offline. No doubt Strickling and Adelstein will review some of these factors at the hearing.

I’ve heard from folks that both are real issues – but I’ve heard that from projects that are otherwise on track and seemingly making progress. I don’t know that the main concerns here are the projects that are running somewhat behind – but rather the projects that seem to still be hovering around the starting blocks.

Causes of Future Problems

The memo itself outlines another issue that I think may be even bigger moving forward; the FCC has made substantial changes to USF, thereby requiring changes in business plans of many ARRA grant/loan recipients…

More problems may lie ahead. The FCC has recognized the need to reform the USF’s high-cost program for a decade, with proposals in 2008 and a reiteration of that view in the 2010 National Broadband Plan. The RUS nonetheless apparently guaranteed loans under the BIP and its Telecommunications Infrastructure Loan Program on the assumption that applicants would continue to receive the same level of high-cost USF funding for the life of each loan. Now that the Commission is reforming the high-cost program, the RUS has asked loan recipients to revise and resubmit their financial projections to demonstrate sustainability.

It will be interesting to see how the Subcommittee and panel of experts addresses those issues. It’s a byproduct of the funding coming out before the National Broadband Plan – perhaps an unintended consequence but not unforeseeable.

Minnesota Projects Mentioned

Finally, two Minnesota projects were mentioned specifically in the memo. First, the Leech Lake Reservation Business Committee in Minnesota declined its $1.7 million grant on the grounds that it would not be able to meet its grant requirements. And the Lake County project…

Nevertheless, industry observers have suggested that the BTOP’s and the BIP’s infrastructure loans and grants have been used to overbuild existing systems rather than extend service to unserved areas. The Government Accountability Office confirmed these suggestions at the Feb. 10, 2011, subcommittee hearing, noting that the NTIA and the RUS had performed "due diligence” with respect to overbuilding but "made a decision to go forward nonetheless” with projects that would overbuild existing facilities. Indeed, the Energy and Commerce Committee’s Subcommittee on Oversight and Investigations is already investigating recently publicized allegations by cable company Mediacom that the Lake County government in Minnesota is not only using $66 million in BIP funding to overbuild Mediacom, but committed fraud by misleading the RUS in its application.

The Lake County project has had its share of ups and downs. (Some might note that disruptions from incumbents may be one reason some projects are running behind.) Last we heard, Lake County is celebrating its new location in Two Harbors. I did notice that their last couple of meetings had been cancelled.

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SAFETY CORNER:

Manage and Reduce Your Stress

As we have been told, stress is an everyday fact of life. When we have too much stress, or it lasts too long, it can be harmful. At work, unmanaged stress can lead to illness or injury, low productivity, and unsafe acts. But not all stress is bad. The best level of stress is that amount which improves a person’s performance without causing harmful side effects; but how do we know when the level is reached? Stress can be managed to make it a more positive force in our life when we identify our stressors, understand them, and take charge of the stress by relieving or preventing it. Using alcohol will not help us manage our stressors. In any stressful situation, we have choices.

We can:

  • Accept it – Some things are out of our control and all we can do is accept them and learn from them. Also seek helpful advice or support from friends or coworkers. Learn to forgive.
  • Avoid it – Stay away from recurring situations or sources of constant frustration including people who stress you out. Remove yourself from the situation or rearrange your surroundings. Plan ahead and don’t procrastinate. Learn to say "no”, know your limits and stick to them.
  • Alter it – Communicate your feelings to your employer or supervisor. Change your feelings or ask someone else to change their behavior. Ask for help with your job or take advantage of your company’s Employee Assistance Program.
  • Adapt to it – Learn to cope with the situation or look at it as an opportunity. Focus on the positive things in your life. Try to make time for the activities you enjoy. Maintain a healthy lifestyle including exercise, conversation and a balanced diet.

Unhealthy ways of coping with stress
These coping strategies may temporarily reduce stress, but they cause more damage in the long run:

  • Smoking
  • Drinking too much
  • Over-eating or under-eating
  • Zoning out for hours in front of the TV or computer
  • Withdrawing from friends, family, and activities
  • Using pills or drugs to relax
  • Sleeping too much
  • Procrastinating
  • Filling up every minute of the day to avoid facing problems
  • Taking out our stress on others (lashing out, angry outbursts, physical violence)

Until we accept responsibility for the role we play in creating or maintaining it, our stress level will remain outside our control. It is important for employers, supervisors, and workers to recognize stressful jobs, situations, and signs of stress in themselves or in their coworkers before accidents, injuries, or violent incidences occur. We shouldn’t get so caught up in the hustle and bustle of life that we forget to take care of our own needs. Taking care of ourselves is a necessity, not a luxury.

Take care,
Dan Berg, M.S.
Lead Safety Consultant

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Daryl Ecker of Park Region Telephone & Otter Tail Telcom Retires

Please join us as we offer Daryl Ecker best wishes on his retirement! Park Region Telephone & Otter Tail Telcom request the pleasure of your company Friday, May 18 at Bigwood Event Center in Fergus Falls, MN. Please bring your best Daryl-At-Work story to share!

In 1972, Park Region Telephone needed someone for the summer to climb poles on road jobs.
Daryl eagerly took on that position and loved it! He was then offered a full-time position with the Company and in 1984 became Sales Manager. In 1996, Daryl was tasked with starting what is now a fixture of Fergus Falls, Otter Tail Telcom. He was promoted to Network Operations Manager in 2004, the very position he holds at the time of his retirement.

It is our privilege now to honor Daryl for the 40 years of exceptional service he has given our Company. A reception will begin at 3 p.m. on Friday, May 18, with a short program at 6:30 p.m. We would be honored if you would join us in wishing Daryl all the best in his retirement.

Do you have an announcement for People & Companies? Send an e-mail to MTA at info@mnta.org or fax to 651-290-2266.

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Minnesota Telecom Alliance
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www.mnta.org | Tel: 651-291-7311 | Fax: 651-290-2266 | Email: info@mnta.org