In order to better understand the SiFi contract as a whole, I wrote to Vince DeLeonardis, the City Attorney asking that he address the points raised by Common Sense, Saratoga. I admire Vince enormously for the clarity of his thought and writing. I think if you take the time to read his email to me, you will agree.
I find it interesting that the authors argue that the contract will create a “government-sponsored decades-long monopoly with SiFi Networks to lay a fiber optic network throughout the City” while, at the same time, questioning why the City would allow for “a new fiber optic transmission backbone that parallels already existing fiber optic installations.”
Under the most basic definition, a “monopoly” is understood to mean the exclusive control of supply of a good or service. Thus, allowing for a fiber optic system which, as they claim, “parallels” an already existing system, is not creating a “monopoly” but is, instead, the very opposite. The arguments proffered clearly lack merit and, ironically, “common sense”.
The contract with SiFi simply allows for the installation of a fiber optic network system which will provide residents with an opportunity to receive multi gigabit technology in internet, voice, data and video services as an option, or alternative, to the services currently available to them. Contrary to the unfounded assertions contained within the article, residents are not required to “financially back” SiFi who, pursuant to the contract, “shall be solely responsible for the cost to design, construct and install the system”. Nor will the contract create, as they absurdly claim, a “fiscal noose around the necks of citizens, forcing them to pay more for less”. To be sure, allowing for increased opportunities fosters market competition, which generally results in a more favorable outcome for consumers as it incentivises companies to increase quality and/or decrease prices.
As with all contracts, there are risks. Here, those risks are overwhelmingly borne by SiFi, who will be incurring significant expense to design, construct and install the system. Their investment will only realize a return if the system is capable of supporting delivery of the service in a manner and at a price point that will generate customers or “subscribers”. If, however, SiFi “doesn’t deliver a working system”, as is apparently the worry of the aforementioned authors, then there will be no subscribers and SiFi’s investment will be lost. Such an event, although unlikely, would indeed be unfortunate as the residents would not have the additional alternative to the services currently available to them that the contract intended to provide. It would not, to be clear, result in any liability for Saratoga Springs, let alone the “enormous liability” that they misguidedly assume.
In the event of a breach or default, the rights and remedies of each party are outlined in Section 7 of the contract and, ultimately, depends upon the nature of the breach and when such breach may occur. If the breach occurs in the manner outlined in 7.1.2(i) or (ii) and is not cured during the applicable cure period, the City may terminate the contract. If the breach occurs in the manner outlined in 7.1.2(iii) or (iv), and likewise not timely cured, the City may terminate the contract and shall have the option to either purchase the fiber optic network which has been installed at the point of such breach or allow SiFi to continue operations relative only to same. The City retains full authority over any extensions or further installation of the network beyond that point.
During the term of the contract, SiFi is obligated to install the system “in order to make the delivery of service over the system available to all premises within the boundary” (emphasis added). Exceptions are only if there is a lack of legal right, title, interest or authority to access property or there would be an incremental material cost to access property or install the system that is at least 20% greater than the average cost associated with providing the service to all other premises within the boundary. SiFi shall have access to the public right of way to install the network, but shall be fully responsible for returning same to the condition it was in prior to construction, including “resurfacing roadways and curbing, regrading and reseeding grass areas, and restoring sidewalks and other surfaces to their original condition.” SiFi shall have right, title and ownership of the system during the term of the contract and, following termination or expiration, SiFi will have the opportunity to remove the system or relinquish title to the City, which can then possess, license, sell or otherwise transfer rights to the system.
Ultimately, the contract with SiFi will provide for an opportunity for the public to enjoy alternatives. There is no obligation or requirement imposed upon any resident to become a subscriber to the service. Nor are there costs, risks or liability in the manner so sensationally described in the referenced articles.
I hope I have sufficiently addressed your questions. However, should you require anything further, please do not hesitate to contact me.