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Q & A – Internet Service Costs

Dated: September 8, 2020

Q: Will this service be mandatory?

A: No. If the Lucas Broadband Project is approved by the voters, this project will operate on a subscription basis giving citizens the option to sign up for this internet service. Please refer to the broadband feasibility study. (Reference: Broadband Feasibility Study)

 

Dated: July 2, 2020

Q:   Is sales tax included in the internet subscription and installment fees?
A:   From Texas Comptroller website: Internet access service enables users to connect to the Internet in order to access content, information, electronic mail or other services offered online.  Beginning July 1, 2020, Texas will no longer impose sales tax on separately stated internet access charges due to the Internet Tax Freedom Act (ITFA) of 2016.  (Reference: Courtney Violette and Scott Moehnke, Magellan Advisors)

Q:   How was the $115.95 rate determined?
A:   The $115.95 rate was determined to be the minimum rate needed, at a 55% uptake, to support costs.  (Reference: Courtney Violette and Scott Moehnke, Magellan Advisors)

Q:   What are the actual services that come with managed services?
A:   Managed services are generally focused on greater support levels, for instance, connecting devices to the WiFi network…. With Managed services, Tech Support has visibility all the way down to devices, and can make network adjustments on the fly, over the phone to support the customer.  This is something far beyond typical support, services are up/down.  (Reference: Courtney Violette and Scott Moehnke, Magellan Advisors)

Q:   How are costs determined for installment fees for homes that are located at a greater distance from the road where fiber will pass; and what is the general calculation to determine these costs?
A:   Various vendors have different pricing policies, but our pricing is based on a national drop vendor who uses a max of 200’ as part of the standard drop charge.  Over that distance, the charge is usually around $0.50 – $0.60 per foot for direct bury and up to $1.00 per foot for conduit bury (cost of conduit is additional).  Also, there are extra charges for out-of-the-ordinary drops such as having to bore under driveways or lawn features. These instances are ICB (individual case basis).  The drop budget in the model covers about a 200’ buried drop.   Anything over this can cost upwards of $0.50 per foot additional.  Boring under driveways, landscape features, ponds, etc., can drive the cost up more – these are all one off costs.  (Reference: Courtney Violette and Scott Moehnke, Magellan Advisors)

Q:   What is the minimum feet requirement from the road where installment fees will increase?
A:   Max of 200’ as part of the standard drop charge.  (Reference: Courtney Violette and Scott Moehnke, Magellan Advisors)

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