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The Coos-Curry Electric Cooperative has created a new company, Beacon Broadband. It’s not another coop. Instead, it’s a for-profit business that was created using CCEC credit for a $60 million loan. Some CCEC members believe the membership was misled about the project, its risks and its costs. KCIW investigates.
Reporter: Lori Gallo Stoddard
The opinions expressed here are those of the individual participants. Curry Coast Community Radio takes no position on issues discussed in this program.
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Brent Bischoff or Paul Recanzone don’t tell you, they have to lease their broadband from Ziply. They also don’t tell you they are sub-contracting all their work out to other companies such as Trice.
We don’t know the added cost of that. I personally see Beacon Broadband paying them for housing, overtime and young guys 4-6 standing around all day, while 1-2 are doing all the work. They’ve broken water lines and more and us CCEC member owners end up paying for those repairs.
Sure they got the State to pass easement laws, using their power line easements. But they are hacking up peoples landscaping and making their own easements on the sides of roads putting their cables underground. People aren’t wise enough to question them. They are just doing it, making their own unapproved new easements. Plus they or the subcontractors are to call or knock on your door before they come on your private property.
They don’t!! They all think they walk on water. I can send plenty of photos.
Also they don’t disclose, that in previous State endeavors run under Paul Recanzone, he bankrupted them. Why would us CCEC members hire a guy with a history like that?
Then also if you show any opposition, like I did in last marches open meeting, given by Georgia Cockerham, to Brent Bischoff and Jim Kolen. You get an unspoken retaliation. About 2 weeks later, unannounced CCEC purposely sunk in another pole on our property. Making us have an eye sight of three poles next to each other. When I can look across our private road and see other single poles with all 3 services on the same pole. Power, Telephone, Cable.
Also Beacon Broadband is about 10-15 years behind the 8 ball. They already have to compete with established companies: Dish, Starlink-which are cableless, Spectrum and Ziply.
Why spend time and big $$$$ on a cable system which will be outdated in a few years? When soon everything will be beamed from small satellites, such as Elon Musk is doing with his Starling.
Also no-one goes into the harmful effects of 5G.
Maybe it’s a Curry County thing, hiring untrusting people, ie; Brookings city manager.
So now I’ve found, basically you give support to CCEC/Beacon Broadband thru your interviews with Brent Bischoff and Paul Recanzone.
Edited Lynn Coker and totally edited 100% from your interview with Joe Wilson. Why this double standard?
Hello … responding to your comment on the KCIW site. FYI, we did many interviews for this piece, some were included, some were not, and each them was edited for the report. Regarding your concern, both Joe Wilson and Lynn Coker, as you know, represent the same viewpoint. The recorded audio with Joe was a little difficult to hear, and both he and Lynn Coker said basically the same things, so we used Lynn’s interview. There was no double standard or hidden agenda.
Hope this clears things up for you. Feel free to contact me directly if you have any other issues.
Lori Gallo-Stoddard
The secrecy surrounding the Beacon Broadband (BBI) business plan leads to one conclusion: six members of the cooperative’s board of directors have made mistakes they will not admit to, nor rectify.
The types of excuses being articulated, for secrecy are: “revealing our rationale and forecasts will give our competitors a business advantage”. Such excuses are without merit. BBI is using off-the-shelf technology, using Charter/Spectrum’s fiber-feed from the south and Ziply’s fiber-feed from the north. The only significant distinction BBI is offering is ‘excellent customer service’. Such customer service is completely at the mercy of the customer service of Charter/Spectrum & Ziply. Customer service that many of their current subscribers are attempting to avoid by switching to BBI.
Companies like these two could care less who our lenders are, what the terms and conditions are of our loans and lines-of-credit, nor how many subscribers BB I forecasts for itself. By controlling the feed from the north and south BBI’s subscribers are theirs. BBI’s business plan is essentially irrelevant.
Before there was a BBi the cooperative (us, the members) paid for a survey that we are forbidden to know the details of. How was it formatted? What were the questions? What are the details of the analysis? BBI is a result of this survey and analysis. How many surveys & analysis have been wrong in the past? How about the ‘Republican red tide’ that was supposed to sweep the country in the 2022 national election? That analysis was wrong. Let’s see how ‘our’ survey stacks up to today.
The unnecessary secrecy surrounding the survey and BBI business plan suggests that six members of ‘our’ cooperative have consistently made poor decisions that would validate their removal from office. Their egos are preventing them from any admission of error.
I could go on, and on, and on.
I became involved in this effort to educate CCEC members about the possible financial problems by being the sole owner of Beacon Broadband (BB). Georgia Cockerham (current CCEC board member) published a letter about a year ago expressing her concerns about this project. She was censured by the rest of the board and was no longer able to attend executive sessions or attend any board meetings for BB. She was reelected by 2/3 of the members in June of 2021 even though another candidate (David Itzen) was recruited to run against her for the board. What she said in that letter left me with LOTS of questions and concerns about this VERY expensive project!!! I am not an expert, but it made no common sense to me because the vast majority of CCEC members already had access to reliable internet so I contacted Georgia with those questions. Georgia is a long-time financial advisor so she understands the financial pitfalls associated with the BB project. After talking to her at length, I was convinced that there were HUGE financial risks for CCEC and that members would ultimately be responsible for all of the expenses associated with the BB projects if it could not generate enough income to pay for itself. CCEC has been publicizing for years the expectation of large grants to help pay for this project. There is one big problem with this–grants can only be given to underserved areas that do not have access to reliable internet. According to a Ford study, 95% Curry County has access to reliable internet. The only grant that BB has received so far is a grant of $14 million obtained by constructing internet infrastructure and providing service to a large area that is outside the CCEC footprint. This represents only about 1/3 of the amount that was determined necessary to build out the target area, and was requested. Because the internet customers in this targeted area are not members of CCEC, they will not be liable for the construction loans or BB’s losses. Members of CCEC are the only ones that will be responsible for such losses.
I went to a meeting in Brookings that further explained the pitfalls and lack of transparency that was associated with this project. This meeting was put on by some concerned members of CCEC and the core group is composed of some very bright and knowledgeable individuals including business owners and individuals who worked with IT firms that brought similar internet projects to fruition. They Know about the possible pitfalls associated with BB. I also went to the CCEC annual meeting in June of 2022 and was appalled with what happened there. There were about 75-100 members attending (enough for a quorum) and all motions that were made by members, including a motion that would give Georgia the ability to represent us in executive sessions, were dismissed by Jim Kolen (chair). He said that these motions would be given further consideration by the board at a later time. Immediately after the general meeting, the board met and voted to continue the censure so that Georgia cannot be kept abreast of, or cast a vote pertaining to the financial and construction status of the BB project. Though we the members voted to give her another three-year term on both the CCEC and BB boards, she has not been allowed to represent us on the BB board nor in the CCEC board executive sessions.
After that meeting, I was asked to be part of a core group that is presently getting petitions signed to get a special meeting for members to have our concerns addressed by the board. As members, we were not given the time to discuss those motions further nor were we given the opportunity to vote on those motions. To date, most of those motions have not been satisfactorily addressed by the board. We have held meetings in Brookings, Gold Beach, and Port Orford to make efforts to educate CCEC members on our concerns. We are currently getting petitions signed to get a special meeting called — we need 10% of the membership to sign (about 2000 signatures in order to be on the safe side). So far, we have hundreds of signatures and will be going out on Saturdays (weather permitting) to obtain more signatures. The only sure way to get things back on track is to replace current board members (excluding Georgia) with board members who are willing to listen to opposing views and make decisions that are in the best interest of all members.
From: Paul Recanzone
Subject: RE: KCIW
Date: January 9, 2023 at 1:49:50 PM PST
To: Lori Stoddard
Lori,
Thank you for the great report.
We would like to correct two factual statements:
Beacon Broadband is not borrowing from CCEC. Beacon Broadband is borrowing from CoBank.
Beacon Broadband has not received a $20 million grant from the state of Oregon.
Recently KCIW posted a news expose regarding the CCEC Beacon Broadband fiber optic venture which illustrates the precarious nature of this hugely expensive and out of control project. For example, though both CCEC and Beacon Broadband (BBI) many times have warned us that federal funding from the Rural Development Opportunity Fund (RDOF) is critical to the development, deployment and commercialization of its internet services, CCEC/BBI Leadership delivered to the Members information which obscured material facts regarding the nature of the RDOF funding and its potential impact on our CO-OP fiber optic venture.
This long-term effort to befog CCEC Members by our CO-OP Leadership first publicly surfaced in a CCEC press announcement delivered by then CCEC Board President John Herzog in December 3, 2020, when RDOF funding was initially granted. Then Herzog told us that, “… More than two years of research and planning have paid off. We now have grant funding to make it work!” (See: https://ccec.coop/beacon-broadband-accepts-federal-funding-fiber-internet-project)
Both points offered by then Board President Herzog in the CCEC press release are misleading. There is no research compiled and presented to members which demonstrates the commercial viability of BBI. NONE. Further, the referenced grant of RDOF funds was almost irrelevant compared to the original $60-plus million dollar estimated cost for BBI’s fiber optic network design, deployment and commercialization intended to serve just CCEC Members. The $14 million dollar RDOF grant was considerably less than CCEC thought necessary and requested from the Federal Government. Clearly it is not enough grant funding “…to make it work!” But with it, RDOF funds can actually make our CCEC fail. That’s because the Federal Government did not grant funding to CCEC simply because CCEC requested it. To receive the RDOF funds, CCEC/BBI was required by the Federal Government to commit to build a much larger and more expensive fiber optic network costing significantly greater than the initially planned $60-plus million dollar price tag. This bigger more expensive network is required to serve non-CCEC neighborhoods outside our CCEC Members’ service area. In this case, the Federal Government extracted a binding commitment from our CCEC/BBI Leaders to design, build and commercialize a fiber optic network much larger and greatly more expensive than is needed to serve our CCEC Members yet the Federal Government paid our CCEC/BBI cooperative only $14 million dollars. Amazingly, our CO-OP Members now are obligated to pay at least $60 million for the original Members-only network plus the full cost of the large non-Members’ network, less the $14 million dollars our CO-OP received from the Federal Government RDOF grant.
Nevertheless, our current CCEC and BBI leadership drive to mask the emerging financial tsunami is relentless. For instance, we have never seen the incremental additional cost estimates for building a larger network. More, since we are to receive only $14 million in RDOF funding, we have never seen how CCEC/BBI is to fill the mammoth funding gap needed to cover the entire expanded network design and construction costs. For this reason, I encourage CCEC Members to bind together and request our CO-OP convene a Special Member Meeting where this painful financial situation can be addressed. Our Electric CO-OP Concerned Members are circulating a petition for Members to sign which seeks to bring about this Special Member Meeting. Please email me at electriccoopconcernedmembers@gmail.com to receive your copy of the petition with instructions for executing and processing the document. HELP US MAKE OUR CO-OP THE BEST IT CAN BE!
It all sounds fishy to me. Neither CCEC OR BEACON BROADBAND is being transparent
It’s like they are protecting each other, meanwhile it’s the membership of CCEC that is being left out of the plan (whatever that is).
Personally, I’ve stayed away from “buying that pig in a poke”. I’ve decided to stick with Verizon until they bring in their own broadband. They probably are as close as Beacon?
Right now, I’m unlimited.
Is this a Curry County thing, IE; Brookings city manager. Seems like a while lot of sneaky going on.