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DANC loses school contracts for broadband service in revenue hit [Watertown Daily Times, N.Y.](Watertown Daily Times (NY) Via Acquire Media NewsEdge) Oct. 24--WATERTOWN -- Fourteen of the 42 schools that belong to the Jefferson-Lewis Board of Cooperative Educational Services didn't renew 10-year broadband Internet contracts for 2015 with the Development Authority of the North Country -- choosing Time Warner Cable because it offered lower prices in some cases. The authority will also lose its distance-learning program next year that was provided by its open access telecommunications network to serve Jefferson Community College and high schools from Jefferson-Lewis BOCES -- taking a bite out of revenue, according to David M. Wolf, the authority's telecommunications division manager. High schools decided they could reduce expenses by purchasing their own technology to offer distance-learning programs using the authority's network, Mr. Wolf told DANC's board of directors Thursday. The network links to the region's major telecom lines in Plattsburgh, Albany and Syracuse. The authority's distance-learning contract for Jefferson-Lewis BOCES accounted for "about one-third" of the $6,356,312 received from customers during its 2013-14 fiscal year, Mr. Wolf said. Because of losing that contract, the authority's revenue stream is expected to drop by about $2.1 million in fiscal year 2015-16, he said. Its fiscal year starts in April. Despite losing that lucrative contract, the authority's telecom network is expected to remain profitable, Mr. Wolf said. The authority is expected to partly offset its revenue loss next year by continuing to generate more revenue in the private sector from "last-mile" Internet carriers that rely on its telecommunications network, such Verizon Wireless, AT&T, Sprint and Westelcom. Those carriers, which connect services to customers' homes, partner with the authority by linking to its "middle-mile" network. Compared to revenue the authority is projected to take in by the end of its current fiscal year, revenue in 2015-16 is expected to fall by about $1.2 million, or 26 percent, from $5.6 to $4.4 million; over the same period, expenses are projected to increase by $319,263, or 10 percent, from about $3.3 to $3.6 million. As a result of those projections, the authority's profit margin is expected to sink by about $1.5 million, or 65 percent, from $2.3 million to approximately $800,000. Mr. Wolf said that all 27 schools that belong to St. Lawrence BOCES, by contrast, renewed 10-year Internet contracts with the authority during the request-for-proposals process. In addition, the authority acquired contracts with 10 new schools in the Plattsburgh region that belong to the Northeastern Regional Information Center. Other large customers of the authority include the Fort Drum Regional Health Planning Organization, which recently agreed to a three-year contract, Mr. Wolf said. A total of about 90 health care facilities are served by the authority. It also serves state-owned facilities in the region including the Dulles State Office Building, along with various facilities operated by the Department of Health and Department of Environmental Conservation. Another key revenue generator for the authority has been wireless towers operated by on the authority's network by carriers, Mr. Wolf said. The number of towers has climbed from seven in 2010 to 49 today, expanding 4G LTE wireless Internet access for residents in Jefferson, St. Lawrence, Franklin, Clinton, Essex and Oneida counties. "The biggest component of our growth with carriers has been wireless," he said. "We get paid based on the usage of those towers, and we also helped carriers get fiber" to the towers. More towers have also helped the authority provide wireless Internet to underserved rural areas, said James W. Wright, CEO of the authority. "If we've learned anything in the past 10 years, we've learned it's difficult to get last-mile deployment. And wireless becomes a good alternative to that, particularly with the high speeds," Mr. Wright said. "There are areas where you might not be connected with a last-mile provider, but you will be connected with wireless where there is a tower." Mr. Wright said that while public sector use of the network among schools could decline, increasing private-sector use among Internet providers and businesses should continue to climb. "The focus is to put the infrastructure in place so that it is sustainable going forward, and the very nature of it is to get it in place and move it to the private sector," he said. "Our goal is to bring competition to the area by allowing other carriers to serve customers throughout this footprint." ___ (c)2014 Watertown Daily Times (Watertown, N.Y.) Visit Watertown Daily Times (Watertown, N.Y.) at www.watertowndailytimes.com Distributed by MCT Information Services |