Sussex swaps lease for ownership of Georgetown’s fiber ring

Dwayne Kilgo

GEORGETOWN — Sussex County is exchanging a leasing agreement to full ownership of the fiber communications ring that wraps around Georgetown.

County council by a 4-1 vote Tuesday for just over a half million dollars approved the purchase of the Georgetown Fiber Ring — approximately 10 miles of fiber ring that serves several county facilities — from Broad Valley Micro Fiber Networks Inc.

The purchase cost is not to exceed $510,000.

The acquisition enables the county to shift from a lease arrangement to an owned-and-operated model. It gives the county full system and financial control, with an annual savings of $102,000 within five years, according to Dwayne Kilgo, Sussex County Information Technology Director.

In 2015, Sussex County partnered with Broad Valley in the installation of 144 strands of fiber to host services such as high-speed broadband Internet and enterprise private network services.

Sussex County leased from Broad Valley six fiber strands at $8,500 per month, providing the County Administration Building, Emergency Operations Center, West Complex and Records Facility with seamless, speed-of-light connectivity and redundancy that previous solutions could not provide.

“We continue to maintain our robust connectivity between our county facilities. Currently we have 10 gigs of band width,” said Mr. Kilgo.

In comparison, Mr. Kilgo said 10 gigs through the likes of Comcast would run about $3,500 per connection, or roughly $12,000 to $15,000 per month.

The county is in the last year of an initial five-year agreement with Broad Valley. A second five-year agreement was set to begin after this year.

“So basically, in a sense, we are asking you guys for a five-year advancement in payment. And then after that we don’t pay any more monthly recurring fees. So that saves us to the tune of $100,000 a year after five years,” said Mr. Kilgo. “We would own it.”

This agreement gives Sussex County exclusive ownership and control with the ability to market and solicit other broadband service providers in the future. This would serve as a potential income stream for the county and is another step and public offering in the county’s larger broadband expansion initiative.

County council president Michael Vincent polled Gina Jennings, the county’s finance director, for her take.

“Is this a good investment?” Mr. Vincent asked.

“Absolutely,” said Ms. Jennings. “The county was going to spend the $510,000 for 12 strands of fiber over five years anyway. This way, we spend the same money for 144 strands with the potential to bring in new revenue. Even without the speculative revenue, we are still in good shape by earning our money back in five years.”

Mr. Kilgo cautioned this agreement does not mean the county plans to dive headfirst into the internet business.

“The county does not want to be in the internet service provider business,” said Mr. Kilgo. “It takes a lot. You have to have the manpower, support it 24/7 and then we have to have a department that can take that revenue in and deal with those customers. I don’t think we want to be in that business.”

In this proposal, Broad Valley is giving the county all 144 strands of fiber plus an additional duct of conduit in that same path along the Georgetown Fiber Ring. New Vision, Broad Valley’s ISP sister company, will continue to service and monitor the existing fiber ring.

The agreement allows New Vision, which has two customers in the Georgetown area, six strands of the 144 to utilize. Without the agreement, New Vision would pay the county $5,200 per month to use those six strands of fiber.

Recently, in September, through combined efforts of County Administration, Information Technology Department and Pete Aquino, president of Broad Valley Micro Fiber Networks, Inc., Sussex County framed an agreement of terms to acquire the Georgetown Fiber Ring.

The initial cost of the fiber ring was about $2 million, Mr. Kilgo said.

That spurred a question from county councilman John Rieley as to why Broad Valley is willing to let it go for substantially less. “Because basically it has not been successful …?” Mr. Rieley inquired.

“I can’t answer that,” said Mr. Kilgo, who noted that Broad Valley is based in the Washington, D.C. area where prices for broadband are much higher. “They came here with that mindset that they could do business and carry it on like they do in the Washington corridor, and that’s not the case. We have a lot of people that are set in our ways and we want to save money.”

Questioned by council, Mr. Kilgo said he was unaware if there were any other offers made to Broad Valley.

“Is there a risk that it would shut down?” Mr. Rieley asked.

“Yes,” Mr. Kilgo said.

“What would happen to the county if it was shut down?” Mr. Rieley said.

“We could no longer do business as we do,” Mr. Kilgo said. “We could not connect our facilities. Our facilities would not communicate. We wouldn’t be able to do business as we do it today. It would be some time to get that built, get someone else in to build us that infrastructure.”

That would entail huge expense, Mr. Kilgo said. “The going rate to run fiber right now is about $75,000 per mile,” he said. “We have about 10 miles running around in the ring.”

The terminal at the county-owned Delaware Coastal Airport has a connection to the Sussex EOC.

“We have 48 strands of fiber going to the EOC, between the EOC and airport. From airport terminal we have another 24 strands going around the runway over to the industrial park to our water facility,” Mr. Kilgo said.

Mr. Kilgo said there is interest from entities “in and around Georgetown now.”

Mr. Rieley, Mr. Vincent, Doug Hudson and Irwin G. Burton III supported the purchase. Councilman Samuel Wilson Jr. opposed.

“I believe the private enterprise should come and make decisions on this,” said Mr. Wilson.

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