Rutland Telecom proposal creeps ahead
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By STEPHANIE M. PETERS STAFF WRITER - Published: November 21, 2009
Hypothetical take rates for proposed Internet, cable and telephone services – and how those variables will affect Rutland Telecom's profitability – were the subject of much conversation within the Rutland Redevelopment Authority this week.
A take rate is industry jargon for the percentage of possible subscribers who sign up for a service.
However, it was the question of how and where the venture moves from here that stimulated the most debate.
While some members of the board and RRA Executive Director Tom Macaulay spoke in favor of picking a board of managers and filing the documentation to establish a limited liability company that can begin applying for funding, others preferred taking more time to first review the business plan – this time by way of a facilitated, Saturday session meant to highlight the plan's strengths and weaknesses.
"There should be a time soon when we decide whether to pull the trigger or not, and we shouldn't prolong that," said board member Jerry Kreitzer.
"I do think there's enough information available to us now to bring in the people (for the board of managers) who do have the expertise … there's a point in time where we'll have to take some small risk," said board member Patricia Menduni.
Board President Mark Foley Jr., however, was firm in his opinion that the other discussion has to happen first.
"What you're suggesting we can do is start accumulating liabilities … I think we still need to decide as a full board whether we want to go forward," he said.
Ultimately, the group reached an informal decision to have Macaulay select a facilitator and some possible dates for the Saturday session – but board members expressed varying degrees of urgency even then. Steve Eddy spoke in favor of holding the meeting after the holidays and the start of the New Year, thus giving everyone the opportunity to digest the multilayered spreadsheet Macaulay used during the meeting to perform a "sensitivity test" for the group.
Macaulay is expected to have those date and facilitator recommendations for the board next week.
The spreadsheet, prepared by consultant Valley Net, which also prepared the business plans of other Vermont telecommunications ventures Burlington Telecom and EC Fiber, includes formulas determining everything from the company's potential and expected customer bases, to operating expenses and time of build-out, projected revenues and a timeline for profitability.
In the sensitivity test, Macaulay plugged in different percentages of urban and rural households Valley Net has anticipated will subscribe or "take" the service each year to illustrate the net impact.
Macaulay also told the board that he's started reaching out to community members he thought might have the finance, marketing and information technology expertise to serve on what's expected to be Rutland Telecom's five-member board of managers. The board that will have final say on who's appointed a manager. Two seats on that board also will be reserved for members of the RRA's board, Macaulay said.
stephanie.peters@rutlandherald.com
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