Questions for County Board of Supervisors - May 19th meeting

This document was submitted to each Board Supervisor in order for them to prepare themselves for the upcoming May 19th Board Meeting when Steve Schneider of Bug Tussel was going to present to the board.  Twenty hard copies were also delivered to the County Clerk who ensured a copy would be at each of the Supervisors Positions.  My next report will recap the  presentation by Steve Schneider.

May 18, 2020

To:  Honorable Board Members

From:  Ron Heuer, former Kewaunee County Board Chairman/Concerned Taxpayer

Subject:  Broadband Information and Questions for Mr. Schneider of Bug Tussel & County Administrator

It is your responsibility as a board member to ensure that our tax dollars (both County and grant money) are spent wisely.  At tonight’s board meeting, Mr. Steve Schneider will be addressing the County Board concerning the Broadband Expansion Program as has been submitted to the PSC on a proposed joint venture with Kewaunee County.   

Bug Tussel has been selected as the vendor of choice to develop the broad band expansion in Kewaunee County.  This selection was made after the Kewaunee County Broadband Committee made determinations as to what services would be necessary for the County.  The Broadband Committee’s findings were then memorialized in an RFP that Bug Tussel responded to.  I have attached that RFP as a reference item to this document.  Just to be perfectly clear, if by spending this Kewaunee County s$960,000 combined with the PSC grant money we provide all Kewaunee County residents with 25mbps down and 10mbps upload I would totally support this broadband effort.

The well-intentioned Broadband Committee did recognize the problem in their meetings, that being, Kewaunee County is quite wooded and there are plenty of valleys where service is difficult to establish.  For the most part, the residents living in these areas are the underserved residents.

These broadband users require individual assistance to determine how a “line of sight” signal can either be constructed at their home or a signal can be redirected to their homes (see diagram following). 

That can only happen one of two ways, either by constructing a tower at the user site that allows signal to go over the woods, or if some type of pole or tower is erected at, or close to their home, to receive the signal.  Keep in mind, the Cambium equipped towers proposed by Bug Tussel for broadband are the same as those already existing in the County with Bertram, Mercury, Door County Broadband and others.  That Cambium broadband equipment allows only for “LINE OF SIGHT,” transmission.  If you can’t see the tower, it is very likely you can’t receive the signal.

I have spent hours researching information on this broadband subject, and have had both direct, and telephone meetings with professionals in the broadband industry in order understand this complicated subject.  I am quite certain that most Supervisors do not have the time to research this subject, so I have taken the liberty to provide each of you with a list of questions that you can pose while Mr. Schneider is in the room.

There are many questions that need to be answered, and tonight’s format will hopefully allow you to ask the questions that need to be asked.  Unless Bug Tussel will provide service as outlined in the above schematic, there is little or no reason to have them build seven towers in the county.

Steve Schneider, Co-founder and CEO of Bug Tussel has a great background in the cellular field, in fact, his business now primarily builds cell phone towers for AT&T.  In a cordial and informative phone conversation I had with him this past week, Steve made a statement that really concerned me. He made this statement “We don’t make money with broadband; we make our money with AT&T.”  To me, he could not have been clearer.  Building Cell Phone towers for AT&T is their core business and broadband are an add on.

I don’t fault Mr. Schneider for cashing in with Kewaunee County and the PSC grant.  He is a business man and he recognizes an extraordinary deal for his company when he sees it.  The nearly $2,000,000 found cash, a combination of taxpayer money from Kewaunee County and the PSC ensures a very low risk, high yield return for Bug Tussel.  Remember, his core business is tower building, towers which will be arrayed with AT&T equipment and leased by AT&T and later purchased by AT&T.  Further, AT&T under the FirstNet program receives Federal Funding to build these towers. Bug Tussel is for all intents and purposes acting as a contractor for AT&T.

Following are some critical questions that need to be asked, both of Mr. Schneider but also our legal counsel and the Administrator:

Question for Mr. Schneider: You erected 10 towers in Sauk County and, according to you, service a total of 3,000 people of the 64,500 residents of the County with those 10 towers.  That equates to about 4.6% of the population.  If those numbers are applied to Kewaunee County, we could anticipate service for about 940 people in our county of 20,400.  How can taxpayers possibly justify spending $2,100 per person for that small slice of the County’s population to receive broadband?  That is assuming that many would subscribe.  A knowledgeable source in Sauk County indicated the actual number of people covered by Bug Tussel is 2%.  if that is true, you can halve the preceding numbers and double the per capita cost to $4,200, not justifiable.

Question for Mr. Schneider: Today, your business has no presence in Kewaunee County, why do you need our money to come to our County? 

Question for Mr. Schneider: Today, on your website for Rapid Bug service in Sauk County you are providing service at 2mbps download and 1mbps upload for $49.99 per month.  In the PSC Grant Application, you represent Rapid Bug service 25mbps down and 5mbps upload for $49.99.  How can you justify the reduced cost to Kewaunee County residents?  Are the Sauk County residents being treated unfairly?

Question for Administrator Feldt:  On page 20 of the PSC Grant Application, e. Scalability, para 2 it states “At present, Bug Tussel Wireless has been working with AT&T wireless to deploy their services throughout rural Wisconsin. The towers that are being built via this project will also be made available for FirstNet coverage.”  FirstNet is an independent authority funded already with $40 Billion dollars managed within the U.S. Department of Commerce.  In 2017 AT&T were awarded a 25-year contract to build out the FirstNet network.  Is there any liability to the County if the Federal Government is funding AT&T for these towers and then Kewaunee County and the PSC are paying for them as well?”

Question for Administrator Feldt:  Is it right or fair for the County to pick a winner in awarding a company that hasn’t done business in the County heretofore?  Even though the County went through an RFP process, are we opening the County to a law suit from companies that are already providing service to the County?

Questions for Mr. Schneider: You have stated Bug Tussel will be paying the $960,000 back to the County over a 12-year period.  What interest is this money going to bear?   Also, what financial penalties are going to be in place if you fail to make a payment?  What guarantees/collateral are you providing the County to ensure you will pay the money back?

Questions for Administrator Feldt: On the Kewaunee County RFP – Proposal Scope it states - Provide broadband (high speed internet) of at least 25 down and 10 up for all rural residents within Kewaunee County, preferably higher than 100mbps down and 25mbps up. What does the word all mean?  Additionally, in the grant application, it lists the townships covered as; Red River, Carlton, West Kewaunee, Franklin, Casco and Mischicot.  What about the townships of Montpelier, Pierce, Lincoln, Ahnapee, and Luxemburg Township?  In as much as they are not mentioned, do they get service?

Questions for Administrator Feldt: How is success, or failure of this broadband venture going to be determined?  What types of reporting will you require from Bug Tussel?  By the number of homes/residences serviced?  Do we have any expectation or goal as to how many homes should be serviced?  What recourse does the County have if the seven towers are constructed and we only see one or two percent of the County served?  What penalties will there be in the contract?

Questions for Mr. Schneider:  What type of monthly reporting will you provide Kewaunee County as to number of customers/residents you are serving, the type of service the customers are receiving and location of customers?  Will this be part of the contract and will there be penalties assessed to Bug Tussel if certain number of customers is not attained?

Question for Mr. Schneider: Currently, you have zero employees in Kewaunee County.  How many Kewaunee County residents will you be employing?

Questions for Mr. Schneider: Based on the schematic in this document, if a resident/customer cannot receive signal from one of your towers and you have to reach them by rerouting the signal, who pays for any tower or pole and related costs to put that type of service in?  What is a reasonable time frame from a request like that until the service is established?   What if you are delayed, is there a penalty to Bug Tussel?

Questions for Mr. Schneider: What is the timetable for installing these towers?  When will service to prospective broadband users be available?  Will these timetables be part of the contract and will there be, or should there be, financial penalties in the event your company fails to perform?

Question for Mr. Schneider:  In the Grant Application you list existing broadband providers as TDS and Centurylink.  Why wasn’t a complete list of companies including Bertram, Mercury.net, Door County Broadband, Hughes Net, AT&T, Spectrum, Verizon, ViaSat, Cellcom, submitted? 

Questions for Mr. Schneider: On page 2 of the PSC grant application you claim 12,115 residential locations will have access to the service.  Then on page 13 of the application (table 1) you represent 7,886 people will have service.  When the number 7,886 is divided by 2.45, the average number per household, the actual households reached would be 3,218.  What is the right number 12,115 or 3,218?
Further On page 14, (table 2), the total population of Kewaunee County is 20,434, yet you say they will service 29,960 people.  Even taking out the 4,011 from the Tisch Mills (table 1, page 13), site assuming they are Manitowoc County and you still are representing a number served of 5,200 people more than are in the County.  Keep in mind, also, there are somewhere between 15% and 20% of the total population who don’t even want internet service.

Question for Mr. Schneider:  On page 15, of the PSC grant application, you claim, on your business map, you will reach and provide service to 199 businesses.  Most, if not all, of the larger businesses have already solved their internet needs by cutting deals with various vendors.  What about the businesses in the townships of Montpelier, Pierce, Lincoln, Ahnapee, and Luxemburg?  In as much as they are not mentioned, do they get service too?

Question for Mr. Feldt: The Covid 19 pandemic has severely impacted revenues for the County, sales tax, gas tax, revenues for example will be much less than projected.  Would it be more prudent to use this money to plug the holes in our budget rather than spending it on this project?

This list of questions needs to be answered along with any and all questions individual County Supervisors may have.