Friday, August 21–Broadband Group Hopes To Get On Track

SNOW HILL – Faced with an October cut-off date on funding from Worcester, the Lower Shore Broadband Cooperative is working to keep the service going.

Diana Nolte, one of the few remaining board members from Lower Shore Broadband Cooperative (LSBC), said this week that no major decisions could be made before electing new board members and holding a meeting for the cooperative’s membership.

“Part of our problem is we’re supposed to have nine members of the Board of Directors,” Nolte said. “We need to get a full board elected.”

Currently, the LSBC board numbers only three, and must have at least five members to form a quorum. Some people have expressed interest in those vacant slots, Nolte said, but have not been formally elected to those posts.

The board members are working to discover strategies that will allow the broadband cooperative to continue service, and have met with banks and organizations like the Rural Utility Service. Options under consideration include making an alliance with another entity or transferring assets to another organization.

“All of those options would be looked at,” said Jerry Redden, economic development director for Worcester County, and one of the LSBC board members. “The end goal is to have broadband services for the people in Worcester County. It’s just too early to say how we’re going to get there.”

The cooperative’s small customer base, combined with the reasonable fees charged by the program, means that the non-profit LSBC is not able to support its operations without some major change.

LSBC was formed in 2005 to provide high-speed Internet service to the rural areas of Worcester County, which cannot get DSL or cable Internet access through commercial providers.

Worcester County took over management of LSBC in September 2008, a takeover requested by the LSBC Board of Directors, to get the cooperative back on its feet.

Subscriber fees were not enough to keep LSBC going, and the cooperative was, and still is, faced with about $700,000 in debt and the need to replace old equipment.

The original business plan also expected the Worcester County school system to provide a large segment of the cooperative’s income, but the school system’s contract with a different provider prevented that.

In response to LSBC’s request for help, the county formed a management team with technical, legal and financial expertise and worked to pull together a viable business plan.

In late July of this year, the management team informed the County Commissioners that it had not been able to create a viable long-term business plan for LSBC without requiring repeated public subsidies or high rate increases for subscribers.

County support for LSBC will be pulled effective Oct. 4.

The county has to be prudent with its taxpayer dollars, Redden said.

“It’s just a tough time for everybody,” he added.

The plan, said Nolte this week, is to find a way to continue LSBC operations and provide service to subscribers in rural Worcester County.

“A lot of people who have the service don’t have an alternative,” said Nolte.

“They’re going to continue to need it. No home in my opinion can be without broadband for learning or business,” Redden said.

While federal stimulus funding is available for broadband installation and support, those funds are targeted to backbone systems, not those that extend access further into communities.

There will be a gap between the county subsidy, which will end at the beginning of October, and potential funding from other sources that would not be available until the end of the year, Nolte said.

“We’re still looking for options,” she said.

A meeting for the cooperative membership will be held in the next month.

LSBC will not really have a clear picture of its options and the best approach to continuing service until at least mid-September, Redden said.

“We’ll be down to the wire,” said Redden.

Nolte said the issue of rural high-speed service persists, despite the cooperative’s future concerns.

“The problem hasn’t gone away. We still have a lot of unmet need in rural areas. It’s a national problem, not just an Eastern Shore problem. The country is falling further behind other countries,” Nolte said.

Redden said he has hope that things will work out for LSBC.

“I’m excited by a couple of the things they’re looking at,” Redden said.

Broadband Internet access is crucial to business success in Worcester County, Redden feels.

“Until we have broadband for everyone in Worcester County, my job is not done. It’s a critical infrastructure piece,” Redden said.

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