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EWEB delays high-speed telecom project

The Eugene Water & Electric Board is putting its MetroNet telecommunications project on hold until economic and financial conditions improve.

The utility's elected commissioners on Tuesday night concurred with the staff's recommendation that temporarily halting the project is the most financially prudent thing to do, given the poor state of the economy.

The decision to put the project on hold came after an updated financial analysis showed a continued deterioration in expected revenues and a softening of demand for access to EWEB's planned ultra-high-speed telecommunications network.

Poor economic conditions have forced many potential customers to cancel or delay their own spending on telecommunications connections, said Debra Smith, EWEB's telecommunications manager.

"Many firms have slowed their capital spending rate, so deferring the project until economic conditions improve seems like the right thing to do," Smith said.

Postponing MetroNet, which is designed to serve four key commercial areas of Eugene with a high-speed fiber-optics network, is consistent with a long-standing commitment made by EWEB Commissioners to push forward with its telecom project only when it makes financial sense.

"We have always tried to ask the tough questions before proceeding to the next step," said EWEB Commissioner Peter Bartel. ""When you ask tough questions, you sometimes get answers you don't want to hear."

But EWEB remains committed to its vision of "universal" access to a publicly owned, high-speed telecommunications network for every home, business, school and employer in Eugene. "Our enthusiasm for the project has not waned, and the need for high-speed service still remains. It will be our job to figure out a way to make it happen, because without us, it won't," Bartel said.

Smith said EWEB will consider resuming its MetroNet project when economic and financial conditions improve.

EWEB also will pursue other telecommunications opportunities in the interim. During the next few months, EWEB will develop an interim "bridge" strategy that could include how do serve individual requests to connect to EWEB's existing network or may involve a pilot project in a specific area.

The utility also will look for opportunities to expand the multi-agency Public Agency Network, which EWEB manages, and its "Light the Apple" schools telecom project. Both of those networks currently are serving government agencies and Eugene high schools with ultra high-speed fiber-optic lines.

EWEB first launched its telecommunications effort in 1999, when it built a 70-mile fiber-optic system to serve the utility's substations and other facilities. EWEB envisioned this "backbone" eventually expanding into a publicly owned network of high-speed fiber-optic lines that would serve every home, business, school and employer in Eugene.

In 2000, voters approved a ballot measure that expanded EWEB's charter authority to include telecommunications services. In 2001, the utility's Board approved MetroNet, a scaled-back version of the network, after a financial analysis showed that a go-slower approach to building the system would be more financially prudent.

Fiber-optic networks use light pulses to transmit data, video, music, television and other information at enormous speeds through hair-thin glass strands.