FiberNet board gets start of year operational update

The FiberNet Monticello Advisory Board recently learned the coming months will be critical for the city-owned telecommunications and broadband provider.
Last October, the city council approved a professional services contract with Mark Pultusker and Cleveland-based FiberConnect for the management and operations of FiberNet.
That one-year contract began Oct. 1. The city has retained another Ohio company, Gigabit Squared LLC, as its broadband consultant.
Pultusker participated in the Jan. 15 advisory board meeting via teleconference, and during the 50-minute meeting, he provided an in-depth status report.
Pulling the system plug or having bondholders take over FiberNet is no longer an option, Pultusker said.
“Residents of the city need to understand that no matter what happens with the bondholders, the city remains committed to go forward with FiberNet,” he said.
Wells Fargo Bank N.A. notified bondholders in October 2012  it had commenced trust proceedings in Hennepin County District Court because the city had stopped its supplemental debt service payments on $26.4 million in FiberNet 2008 bonds.
Wells Fargo asked for an order instructing it not to make a Dec. 1, 2012 payment for $883,000 as well as future payments from surplus and reserve funds. The court granted the order on Nov. 15, 2012.
City Administrator Jeff O’Neill said during last week’s advisory board meeting city representatives and legal counsel will be listening carefully during a FiberNet bond meeting scheduled for this Friday.
“We are trying make FiberNet self-sufficient in everything it does, and have the employees take a more active role in the system as opposed to being part of a larger entity,” Pultusker added, referring to previously contracted management company Hiawatha Broadband Communications Inc., which parted ways with the city last summer.
“We are changing procedures and policies and philosophies they had, and we’re in the process of upgrading our billing system,” he said.
Pultusker said he doesn’t see any need to add employees until additional subscribers are signed.
A new marketing campaign is currently under development, he added.
“We are going to be a little more aggressive in how we do marketing. [Right now] we only market in Monticello. Obviously, our competitors [TDS and Charter] market to a larger area. We want to be more personal in our marketing.” FiberNet 2.0 is the generic name that’s being used for future enhancements, he said.
“We’re also developing a division within FiberNet that will exclusively deal with businesses and their particular needs,” Pultusker told the board. “I think a lot of the businesses in town look at FiberNet as a residential services company.”
This new entity, FNM Business, is scheduled to be introduced in late February.
The Monticello Chamber of Commerce & Industry will partner with the city, Pultusker said, addressing his tentative timeline for a business lunch rollout event.
Pultusker said he’s targeting wireless service providers as possible customers. He mentioned a recent conversation with Verizon regarding data center use.
“It’s a good sign someone as large at Verizon recognizes our data center as sufficient enough to provide service to their customers and as an equipment connection point,” he said. “Closing a deal [with them] will say a lot about FiberNet’s capabilities..” Pultusker said he’s talked with Sprint, T-Mobile and AT&T about city water tower antenna locations.
“The water tower by the data center is unique,” he said. “It gives us an opportunity to generate additional revenue.”
Pultusker said he’s also investigating the possibility of usitower to provide wireless access that would cover some of Monticello’s city parks.
In a few weeks, FiberNet’s video offerings will include AMC, Cartoon Network, BET and some MTV channels, Pultusker said.
“We’ve added the Fox Business channel to our base tier,” he said. “We’re getting to a point where we’ll be on equal if not higher footing than Charter or TDS in terms of offerings and line-up.”
According to Pultusker, FiberNet staff will be working to educate system subscribers to make them aware of the advantages having a set top box can bring.
“We didn’t do a very good job of explaining the $4.95 gateway fee,” he said. “The advantage of the box is it provides a true digital picture similar to a satellite.”
Pultusker said FiberNet is also looking at creating a sports tier for certain channel offerings as well as some additional Internet access to sports programming.
“Right now, our channels are sort of set up randomly,” he said. “I want to make it so CNN is next to MSNBC which is next to Fox News.”
According to Pultusker, the goal is creating neighborhoods of channels with similar content. “I’d like five or six channel groups,” he said. “That’s another initiative to look at.”

Contact Managing Editor Tim Hennagir at tim.hennagir@ecm-inc.com

  • Anguglad2meetme

    Come to BIG LAKE!!!

  • Anotherdumbtaxpayer

    Monticello taxpayers have unknowingly invested 4+ million in the experiment, future subsidies have been budgeted, and it appears the keys have been handed over. Article does not mention that Mark Pultusker is stake-holder of both Gigabit Squared and FiberConnect. I hope our leaders at city hall have done their research, background checks, etc.

  • Monti Resident

    why dont we offer services to other areas outside of monticello? I know it would be hard to do now that there is no money, but I dont think it could be that hard to run a line to biglake, or out towards buffalo/albertville. Maybe the city of biglake would come on board, and cover the costs…

    • What are you thinking

      Yah you failed in Monti and so you think making it bigger it going to help? Above the figure of 4 million is mentioned. 4 Million? Try 26 million that is “not tax payer money.” Who is going to have to pay the service on the debit when this thing when we finally wake up and make them shut it down? I don’t know if you saw the other story this week where they put a 200k item on the agenda and then voted on it in the same meeting. This is outright crooked!!!

  • Dan Flicker

    I think the city needs to let residents know that if the city system fails, the other two systems that serve the city will go back to charging exorbitant prices like they did previous to the city system. Don’t be afraid to let the residents know how it was in the past. I’ve had Charter in St Cloud and I remember TDS when we were stuck with them as our phone service. Both systems were lousy. Now that Fibernet is here, we are so much better off.

    • What are you thinking

      Exorbitant? Have you looked at the balance sheet. Those prices might be appropriate to keep your head above water. Fibernet is throwing away money at the rate of 2 Million dollars every three months. Exorbitant.

  • Andy

    Dan,
    Your comments are just a little off base, today Charter and TDS are cheaper than FiberNet and because both now offer phone, Internet and TV competitive pricing will continue to stay in place even if FiberNet runs out of the citizens tax money.

  • Monticello Resident

    It would require millions of dollars to run the city’s fiber outside city limits. Neighboring communities are not going to bail Monti out of its debt and jump on board with a connecting pipe, they’ve been watching the financial failures here of the business. Fibernet cannot operate with efficiency inside the city limits with only 1,000 subscribers why would any other city trust it to serve theirs? Additionally, there are several hoops of regulations regarding taking the service outside city limits due to the fact this is currently a municipal operations.

    If the current consultant and manager Mark P. from Fiber Connect had deep pockets or could attract investors why doesn’t he purchase it from the city? Every time he speaks at council meetings he keeps telling about all the things he is fixing and how they’re going to make money. Why isn’t he putting his money where his mouth is? Oh yeah, he’s making the money with his consulting fees of $20,000 per month plus travel expenses. He lives in Ohio. What happened to the concept of a locally owned and operated company or is that simply history now?

  • Kevin Boynton

    It doesn’t make sense to expect a better result from government run business ventures that already have private competitors. The only beneficiaries appear to be Mark from connect fiber and city bureaucrats. Only a very aggressive private competitor would have a chance (a small one) of bringing resolution to this problem. Voting has consequences.

  • James

    Kevin, can you explain and/or provide examples of how city bureaucrats have benefitted from FiberNet?

    • Kevin Boynton

      They benefit by having more to manage (people, infrastructure, and operations are examples). I can elaborate further if you choose to publish your name or you may contact me directly. I am in the phone book.
      When things go wrong the bureaucrats seem to always rack it up to something that was beyond their control. You can choose to believe them. I choose to not believe them. If Fibernet was a private business it would have gone out of business or been sold.
      James, I was brought up by responsible parents and taught to think for myself. This venture by the city had predictable and foreseeable consequences.
      It is important for citizens to clearly remember this expensive lesson and avoid situations like this in the future.

    • Kevin Boynton

      The more infrastructure, employees, operations etc. that the bureaucrats have management responsibilities for the more their paychecks increase. I am open to discussion should anyone wish to discuss this.

  • Monticello Resident

    Kevin, you make excellent points. The city hangs its laurels on the fact that during the referendum when the voters could decide if the city should build a telephone switch the vote was yes. Today, given the financial trouble the city is in attempting to operate a private business as a government run entity and without the private business experience or know how (with or without a consultant doesn’t matter) so you think the voters would again say yes to keep this venture going?

    The city continues to claim the fiber company they run is not done with taxpayer dollars. I disagree. It IS the use of taxpayers dollars due to the fact that city administration and other staff are involved with time for the Fibernet operations and taxpayer dollars go to fund his salary and other city staff.

    Fibernet has the benefit of city staff paid employees who spend time on Fibernet operations. It would be impossible to track each and every hour of time and money that various city staff members crosses over from city government work to Fibernet tasks. I have never seen the city administrator’s salary broken down and billed to Fibernet. if any city staff person can produce such documents I would like to view them!

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