Published: May 16, 2008 10:05 am         

BOE funds Allconet 2 Intranet upgrade

CUMBERLAND - The Allegany County Board of Education on Tuesday agreed to pay more than $200,000 of the cost to purchase nine backbone switches for the Allconet 2 Intranet service - but not without reservation.

The existing Allconet agreement signed in 2005 exempts the board, as well as the library system, from "any and all obligations, liabilities, damages, claims or losses which may arise as a result of Allconet 2."

But that's before the $4.35-million Allconet 2 venture, a high-speed wireless telecommunications system, failed to generate expected revenue. Now, without some financial assistance, all parties in the partnership between government and nonprofit entities could lose service.

"It is evidence that the original revenue to be gained has not materialized nor has the City of Cumberland or Allegany County recovered their original investments in the Allconet 2 venture," wrote Nil Grove, Allconet chairwoman, in a letter to the Board of Education. "Allconet 1 cannot truly function without the backbone infrastructure of Allconet 2."

Allconet 2 is the upgrade to Allconet that provided wireless broadband Internet services to developed areas of the county. The purpose of Allconet 2 is to spur economic development by providing low-cost, high-speed service to the private sector. High-tech and bio-tech businesses have been targeted in the initiative.

Eight switches will be used to relay traffic between each of the eight main towers that provide service to Allconet subscribers, said Grove, director of information technology for the board. One switch will be used as a back-up unit.

Grove said the city and county were joining to ask the board to pay one-third of the $631,602 total cost, or $210,534. Board members approved to fund the move - there was a consensus there was little choice in the matter - but individuals on the board expressed concern about add-ons on the current agreement.

Jeff Metz and Karen Treber, board members, questioned the necessity of the expense when an agreement was in place that prevented the group from being liable for additional costs. Treber asked if a new agreement could be struck before any money is sent.

Board attorney Gary Hanna also expressed misgivings, but agreed there seemed to be little choice. Either send money or risk losing service. Treber asked Hanna if it were possible to send a letter with the payment that would hold the board harmless from future liabilities if the payment is accepted.

There was an apparent, if only slight, degree of wondering whether the county would uphold its end of the bargain this time. County Commissioner Bob Hutcheson, liaison to the board, said there's no doubt the county will fulfill the terms of the agreement.

The agreement in 2005, Grove said, was to keep the board of education and library out of the arena of paying to benefit from the service. Now, however, officials have realized "there has to be some contribution."

"It makes business sense the agreement was well in the interest of the Board of Education," Grove said. "The Board of Education developed that intellectual property and gave it freely to others to use. Their reservations (are valid) but we understand that you can't get Internet service for free."

Grove's letter points out that Allconet users have realized a cumulative $1 million in cost reductions over the past year. Those savings are based on rates currently available from telephone and cable Internet service packages.

"Commissioner Hutcheson mentioned very clearly (that) if we were to go elsewhere, we would be paying an exorbitant amount if we were to try to get the same level of service that we are getting right now," Grove said.

Grove said there are two primary reasons why the system has worked the way officials had intended.

"Our expectation was Allconet 2, when we went public (in 2005), would become a large revenue-gaining tool for the city and county," Grove said. "That has not panned out. You have expenses (which are) outweighing the income. That's been pretty much the problem for about three years. "

There has been new business, Grove said, but "it's a very small size. Allconet 2 has been looking for other ways to make revenue to pay debt."

Costs for the service, electricity and landlease for some of the eight towers all have increased, Grove said. Also, the city and county spent "many millions of dollars" to expand Allconet services in the region.

Contact Kevin Spradlin at kspradlin@times-news.com.