PORT ANGELES — City Council members have secured an agreement with fiber-optic service provider Capacity Provisioning Inc. for the next 11 years following an offer put forward by Wave Broadband to buy the company for $4.7 million.
The council unanimously approved an agreement with CPI on Tuesday night that would ensure the fiber-optic and Internet services and infrastructure that the Port Angeles-based company provides the city continues until 2024.
“Extending this out to 2024 is the right thing to do,” Deputy Mayor Brad Collins said at the Tuesday meeting.
The agreement also guarantees Wave Broadband, based in Kirkland, would honor the new agreement if the Internet and phone service provider completes the purchase of CPI.
The city has an existing agreement with CPI lasting until 2017 that would endure after the purchase, if it occurs.
According to a council memo, CPI told city staff that Wave Broadband has offered to purchase the company for $4.7 million.
CPI Vice President Craig Johnson declined Wednesday to comment on the potential sale.
“I still have no comment because we’re still in negotiation,” Johnson said.
A representative of Wave Broadband could not be reached for comment Wednesday afternoon.
Void if no sale
City Manager Dan McKeen said Wednesday that the agreement extending to 2024 would be void if the sale is not closed by Jan. 30.
At the Tuesday meeting, Lee Afflerbach, founder and principal engineer for Maryland-based Columbia Telecommunications Corps., told council members that extending the service agreement with CPI is the best option.
In August, Afflerbach presented four ways the city could react to the potential sale of CPI, including extending an agreement with the company.
The other three options were to do nothing, buy CPI or duplicate the services and infrastructure the company provides.
At the Tuesday meeting, Afflerbach estimated the city would need to spend about $2.2 million to replace CPI’s established infrastructure and hire at least two more staff members to operate and maintain it.
Afflerbach also estimated the city cost of purchasing CPI at between $4.5 million and $4.8 million.
The city extending the agreement with CPI would save the city spending millions of dollars and ensure the city’s rate with CPI, Afflerbach said, describing the rate as one-fifth of what other entities pay for similar service, at least until 2017.
“We end up with the best of both worlds, as I see it,” Afflerbach said.
Average payment
Afflerbach estimated that the city pays CPI roughly $15,000 on average per month for service.
Starting in 2024, the approved agreement allows the city’s rate to increase by no more than 5 percent per year.
The agreement also includes language that allows the city to get out of the agreement with 90 days’ notice.
CPI provides services to multiple public entities across Clallam County.
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Reporter Jeremy Schwartz can be reached at 360-452-2345, ext. 5074, or at jschwartz@peninsuladailynews.com.
