Grant PUD commissioners Tuesday discussed a recommendation from Communications Network Manager Warren Miller to consider withdrawing from NoaNet. In his recommendation memo Miller warned:
A retail telecommunications business model for NoaNet creates little value but great risk for Grant County PUD. NoaNet has recently indicated that they need another line of credit in the amount of $3,000,000.00 and will be asking the members to guarantee the loan. This request will be presented to the NoaNet Board of Directors either in June or July of 2012. There quest is problematic in that NoaNet is still depending on the members to back their debt as they cannot secure an LOC on their wholesale business model. They want to expand their authority into a very competitive business environment. I recommend that Grant County PUD withdraw from NoaNet as soon as possible.
The commission visited with NoaNet representatives during its executive session on Tuesday, June 25.
The main concern voiced by Grant PUD commissioners is that NoaNet is carrying too heavy a debt and that the PUD is too exposed to financial risk. NoaNet replied that each of the PUDs remaining in NoaNet are carrying the same level risk. Over the last 12 years, competition, they say, has brought in more providers…not just NoaNet.
Asked where NoaNet is headed — their representatives said NoaNet’s business focus has changed every 2-3 years.
It’s hard to get a crystal ball and tell where you’re going to be.
A strategic plan was conducted that led NoaNet to determine they need to grow.
Growing with expectations of a retail market…Growing our involvement with government… including state, fed, public safety, local governments…And growing with enhanced services…being able to deliver more to end-users through service providers, if possible, but…we think we shouldn’t be restricted from providing service to end-users.