DMEA fiber estimate pegged at $94 million

By Hank Lohmeyer


A consultant's estimate for building out DMEA's proposed "last mile" Internet broadband business model is $94 million.

The figure was confirmed last week by DMEA staff in an email reply to the DCI.

"The estimate, from our consultants, for a 100 percent build out of fiber to every premise was $94 million," confirmed administrator Virginia Harman, manager of member relations and human resources for DMEA.

Estimated build-out costs for the DMEA plan plus the Region 10 fiber optic network plan total $111 million.

Also in answer to a DCI inquiry, DMEA's Harman gave an estimate of the time it would take the co-op to complete its proposed project: "Seven to 10 years is the estimate from our consultants based on similar build-outs of other rural electric coops. But of course it is just an estimate."

At DMEA's annual meeting last June, then board president Olen Lund announced a consultant was developing three fiber optic network business scenarios for the co-op: one was a retail Internet service provider (ISP) plan, one a wholesale provider plan, and the third was a hybrid plan combining elements of the other two.

The consultant delivered its findings to the DMEA board on June 24. On Aug. 17, the DMEA board held a "strategic session" discussing the fiber optic network and ISP issues. The DMEA directors have tasked staff to gather information they believe is needed before making a decision about entering into the commercial ISP business.

The $94 million option being considered by the DMEA directors is a "fiber to the home" (FTTH) plan that would make fiber optic cable access available to all private homes and businesses. Instead of the term "FTTH," DMEA uses the term "FTTP" for its concept, or "fiber to the premises." Harman explains, "Premises, in our case, just means fiber to every location that DMEA serves, not just residential (fiber to the home)."

During a presentation in Orchard City on Aug. 20, Michelle Haynes, director of Region 10, said the price of DMEA's "last mile" fiber optic network and ISP business build out was around the $90 million figure. Region 10 is pursuing its own "middle mile" fiber optic network infrastructure project which Haynes said would cost $14 million to $17 million to complete, a total of $111 million for the two projects.

The Region 10 middle mile project was recently awarded a $5.2 million grant from state agency DOLA. Haynes said will take another two years to complete the project which, she explained, is parallel to and complementary with the DMEA last mile project. The two projects -- the Region 10 middle mile infrastructure plan and the DMEA Internet broadband concept -- are "interrelated but not interdependent," Haynes noted.