Rancho Santa Fe Association’s deal with Hotwire to end

The Rancho Santa Fe Association’s agreement with Hotwire Communications to build a $13.5 million fiber-to-home network in Rancho Santa Fe will soon be terminated.

In executive sessions, the RSF Association board, the finance committee and the technology committee came to the unanimous conclusion that the terms of the current letter of intent with Hotwire are “not satisfactory,” reported RSF Association President Fred Wasserman at the Oct. 6 RSF Association board meeting.

“That gives us the option to look at other alternatives,” Wasserman said. “We are moving ahead with a fiber-optic project here, we are going to do it right, we’re going to do it carefully and we’re going to bring it on budget. This is a very important item for this community.”

RSF Association Director Allen Finkelson said that the belief among all the groups was that they would not be able to arrive at a definitive agreement with Hotwire.

“We can’t just unilaterally terminate this deal with Hotwire,” Finkelson said. “What we’re going to do is tell them where we are and try to reach a mutual agreement on termination. I believe that will happen.”

Following the termination of the letter of intent, Finkelson said they will form a new technology committee dedicated to bringing the fiber-optic project to fruition “as soon as possible.” The committee will be appointed at a special board meeting on Oct. 13.

In May, the RSF Association signed the $13.5 million letter of intent to bring a one-gigabit to 10-gigabit speed fiber-optic network to every home in the Covenant, promising to make Rancho Santa Fe “the most connected community in the country.”

Under the terms of the deal, the RSF Association would own the physical infrastructure in the ground; however, the network would be operated and managed by Hotwire. The RSF Association would also receive a return on its investment through revenue-sharing with Hotwire.

Consultants had been helping the RSF Association negotiate documents that would’ve gone into the agreement with Hotwire, such as the construction contract, terms of service, financing, maintenance, revenue splits and service offerings.

Marketing and outreach began over the summer, with a goal to gain interest from 1,200 subscribers. The RSF Association had targeted October for a community-wide vote on the project.

Wasserman said the board continues to get numerous calls from residents frustrated by the lack of service in the Covenant. He gave examples of one resident who built a $5 million house but has virtually no connectivity; another resident told him that they moved into their home on Zumaque five months ago, have no service and do not want to start a remodel of the home until they’re assured they will get some connectivity.

During public comment two residents spoke about how a fiber-optic network needs to remain a priority in the Covenant, lifting the community “out of the dark ages.” Residents talked about how essential connectivity has become to conduct business out of the home, for the increasing online aspect of their children’s education and for entertainment as more and more people opt to stream television and movies through high-speed Internet. Many in the community do not have these options.

Wasserman agreed that the issue is a high-priority for the RSF Association.

“This is a very, very important process and we’ll keep you informed as we go along,” Wasserman said.