County, Bug Tussel tussle over costs

There’s been some miscommunication between Oneida County and its chosen internet service provider over final project costs for connecting fiber optic lines to government facilities, which county officials believe will be ironed out in talks between the parties.

Specifically, much of the fiber cable has been laid near nine county facilities, but the final hook-ups have not been completed. The county was under the belief that it would not incur additional costs for those final hook-ups, while the internet provider, Bug Tussel, was operating under a completely different assumption.

The issue emerged at the most recent county board meeting, as the board discussed a report by Tony Pharo, the executive director of the Oneida County Economic Development Corporation (OCEDC). 

The report focused on the latest meeting of the OCEDC Broadband Task Force and its recommendation on who should be awarded a federal BEAD (Broadband Equity, Access, and Deployment) grant as the county pushes its broadband expansion. 

“The Oneida County Broadband Committee has been actively pursuing strategies to enhance broadband access and connectivity within the county,” Pharo wrote in the report. “As part of the BEAD grant program, the committee interviewed four Internet Service Providers (ISPs) to determine the best partner for deploying broadband services in underserved and unserved areas.”

After conducting interviews, Pharo wrote, the committee selected Bug Tussel as the preferred ISP partner for the BEAD grant process, and forwarded a resolution to the county board endorsing Bug Tussel Wireless’s application for the grant.

That resolution observed that grant funding was available for unserved and underserved households and businesses within Oneida County; that a legitimate need had been identified; that Bug Tussel Wireless was seeking BEAD funding for 140 business units of Oneida County; and that Bug Tussel Wireless was interested in providing fiber to the home as a priority identified by Oneida County.

The resolution also acknowledged that Bug Tussel had partnered with Oneida County on six current and past broadband expansion grants that included both fixed wireless and fiber to home projects; and thus had a proven record of accomplishment in Oneida County, having made investments in county communities since 2018.

At the county board meeting, Pharo said the final call on the grants would be up to the Public Service Commission.

“We have 5,644 businesses or residents that do not have broadband,” Pharo said. “It’s about 18 percent of our county. And so the reason we picked Bug Tussel is because Bug Tussel assured us that they would go in with their grant for all 5,644 residents with their grant application. This is a grant application we’re supporting and that’s 140 business units.”

A point of contention

In his report, Pharo mentioned that the project manager for the county, former chief deputy John Sweeney, had reported that he had worked with the land information office, buildings and grounds, and the corporation counsel to prepare and complete legal easements for access of fiber to county facilities, and that aspect of the project was under review by Bug Tussel’s executive leadership.

Supervisor Steven Schreier had a question about that point.

“Regarding the legal easements to provide access to county facilities, can I assume that means also that this will be at no expense to the county?” Schreier asked. “That was my understanding when we went into this agreement, that fiber is being provided to all county facilities.”

Sweeney said the project total was hovering around $28 million in bonding. 

“Included in that is $2.6 million in PSC grant dollars and another $1.5 million that was originally coronavirus dollars that was converted back to a loan,” Sweeney said. “That loan has not yet been executed. It’s still hanging out there.”

Sweeney said Bug Tussel had put in some expensive pieces of fiber around the city at the county’s request but final connections to county facilities had not been made.

“They have now come very close to all those county facilities and then we ran into winter,” he said. “But we are currently working with Bug Tussel to determine what the costs are for those.”

In some cases, such as the facility in the Trig’s shopping center, it’s less than 50 feet to a connection, Sweeney said, and solid waste was an another important facility.

“We’ve now got right up on Highway K, right up front of that solid waste facility,” he said. “That would’ve been an extremely, extremely expensive proposition if the county was going to try to bury fiber all the way from Rhinelander up to solid waste, and by the design and the input that many of us had, we were able to get that original design to come right down on K in front of solid waste. Now we have to get it from county K into the building.” 

Mitch Olson, Bug Tussel’s chief development officer, arrived later at the meeting, and Schreier repeated his understanding that fiber was being run to county facilities at no additional cost to the county. 

Olson said there had been no absolute agreement about those costs.

“So there was not necessarily a perfect meeting of the minds on where the county’s costs started and ended,” Olson said. “The gap is the distance between where the fiber is on the route and the location for the county facility.”

Olson said Bug Tussel had a couple of proposals about how to fund connections to those nine locations. 

“We’re going to design on the nine locations to determine what the ultimate cost for those is going to be,” he said. “We’ll have a couple of different bids with a couple of different contractors as well as the firm that worked internally to determine the cost associated with that. And then ultimately we need to come up with a solution for how it’s going to be paid for. …. Ultimately we can’t really come full face and make that presentation until we know what those costs are, how all those pieces are balanced together.” 

Using the BEAD grant could be possible but it could also cause delay, Olson said.

“It is an allowable expense under the bond, but ultimately it comes down to, do we spend those dollars making the connections to the county facilities, which generate no revenue and don’t assist us in making the bond payments back, which we both have a vested interest in, or do we continue to develop and expand our network and ultimately connect your constituency and the people in Oneida County,” he said.

Sweeney said his understanding was also that those connections would be part of the $28 million package. He also said the connectivity would ultimately eliminate some redundant costs, such as owning one phone system versus three phone systems or four phone systems. 

“Those recurring type expenses are going to go away because they’re going to use our 20 strands of fiber to interconnect those county operations,” Sweeney said. He said there would also be a dramatic improvement for services at solid waste, which is a top county priority.

County board chairman Scott Holewinski said his memory was that the final connections would be covered.

“My memory of this, because we were the ones who said to start out $18 million, then we talked about connecting all the fire, schools, town halls, and that raised it $6 million in there,” he said. “We were always talking about hooking it up. There was never anybody who said, ‘Well that’s only going to bring it down the road.’ Our interpretation, like Steven said, was, we were hooking all the government facilities up with this original $24 million grant, and now you’re telling us maybe that’s not going to happen. And so I think the board, in my mind, I expected it to be hooked up. Otherwise you should have said up front that it’s going to be close to your buildings, but you never said that.”

Holewinski said he hoped it could be worked out. 

Olson said he would take the blame for the miscommunication and not clarifying better that the county would be responsible for the final connections.

Sweeney said that when the county made a policy decision to go from $18 million to $24 million, supervisors were acting aggressively to get the county connected with a robust design.

“Then you had the PSC grant,” he said. “You add the $1.5 million note, you’re hovering around $28 million. In my argument back to Mitch, you’re using Oneida County’s excellent name. Mitch wants Oneida County to be an excellent reference. Bug Tussel does, and if I have to, I’ll go over to their executive committee and I’ll tell them the same thing, that ‘you’re using Oneida County’s good name. We’re giving you $28 million for using a lot of our good will. We’re endorsing you for the BEAD grant. Let’s get this small portion of it done. We can talk about all the good things that Oneida County has done in this partnership and for that we want some good will on this.’”

Schreier said the county had already endorsed Bug Tussel to the tune of $28 million, including what could be an additional significant sum of money. 

“My strong opposition initially was because we were going to be in a position like this, and now I’m hearing potentially that we may or may not have to be on the hook to pay to complete projects,” he said. “I get the feeling like this is kind of like a phone system on Green Acres where they have to go up the telephone pole to talk to people because that’s as far as it came in. This should not be the type of product that Bug Tussel is delivering to the county to the tune of what is currently $28 million and potentially more money if this grant comes through.”

Schreier said the public service aspect of the project concerned him most.

“But the public service part of it, the delivering a service and making sure that we have emergency services that are up to par with what we should be providing to our constituents, is the primary concern for me,” he said. “And that’s not to put the 5,000-plus people that we’ve mentioned who would be served through this grant if we get it. But let’s be honest, emergency services should be the priority. That’s what we should be focused on and to make it sound like  ‘yes, we may get you connected at some time in the future and it may or may not cost you some additional funding,’ that concerns me.”

The county board approved the resolution supporting Bug Tussel for the PSC grant. Sweeney will have discussions on the connectivity costs for the county and that will be on a future agenda.

Richard Moore is the author of “Dark State” and may be reached at richardd3d.substack.com.