Rancho Santa Fe could go from worst to first with its proposed fiber-optic network, putting an end to the community’s lack of reliable connectivity that has been described by residents as both “debilitating” and “embarrassing.”
At its May 5 meeting, the Rancho Santa Fe Association approved a letter of intent with Hotwire Communications to build out a one-gigabit to 10-gigabit speed fiber-optic network to every home in the Covenant. The 10-gigabit speed will make Rancho Santa Fe the most connected community in the country.
The board’s unanimous vote was met with applause from those in the audience.
RSF Association Director Mike Licosati, a member of the tech committee who worked for over a year on this project, said the committee reviewed 11 responses to its request for qualified proposals for the network. They interviewed four bidders and recommended entering a comprehensive letter of intent with Hotwire after negotiating the deal terms with the company, as well as review by the finance committee.
“We wanted this to be an investment rather than just turning over money to the provider. We had to have a long-term solution so increasing our speed from 10 megabits to 50 megabits was not sufficient, we wanted true gigabit speed fiber-optic to every home in the Covenant. It had to be capable of connecting every home on consistent terms and we wanted to have transparency on how our money would be used,” Licosati said. “This has been a huge undertaking for a project that we think is one of the most exciting ones that we’ve had here in the community, at least since I’ve lived here for 14 years. It’s really connecting us to 21st-22nd century communications, which is critical infrastructure in today’s environment.”
Dan O’Connell, vice president of sales for the Philadelphia-based Hotwire, said that residential customers will have gigabite speeds over 100 times faster than the average U.S. broadband connection. He said Hotwire specializes in “white-glove customer service” and provides a one-stop shop for digital HD technology, high-speed data, telephone, security and Smart Home technology capabilities.
Through the terms of the letter of intent, the Association will fund the full $13.5 million cost of the construction through Community Enhancement Funds and bank loans. Hotwire has committed to invest $5 million in additional revenue to design and build the network.
The project will have to go before a community-wide vote for approval and, if approved, it would take nine months to complete construction.
John Honker, consultant for Magellan Advisors, said the deal represents a “true partnership” and will be a community-owned network. The Association will own the physical infrastructure in the ground, however, the network will be operated and managed by Hotwire. The Association also receives a return on its investment through revenue sharing with Hotwire, sharing 50 percent from internet service, 5 percent from cable, 20 percent from phone service and 20 percent from other services.
Each customer that participates in a pre-sign up program will pay a one-time fee to connect their home and business to the network backbone: for gigabit internet service it would be $525, for gigabit-dedicated internet service it would be $1,500 and for 10 gigabit service it would be $2,000.
Rancho Santa Fe will receive $525 of each connection fee to help offset the $13.5 million cost. As Honker said, they are looking to get 1,000 to 1,200 people to commit to sign up to the network before they put a shovel in the ground.
Retail costs are estimated to be $129 a month for gigabit internet and $299 for the 10-gigabit internet service.
Honker said the Association’s investment would be repaid in about 15 years.
At the May 5 meeting, the board approved $50,000 for final design and engineering costs and directed the tech committee to begin developing an education and outreach program, aiming for the 1,200 customers to sign up as required by the letter of intent.
Within the next three months the Association hopes to achieve the sign-up commitments and hold a community vote. It would be about an 18-month time frame for the service to be available if the project is approved.
The Association has set up a website, rsfcommunications.com for people to sign up. The site also offers information on the project and a venue to ask questions.