On March 18, 1994, Key West The Newspaper's headline announced that City Electric was exploring the construction of a high-tech fiberoptic network that could bring a number of exotic communications services to Key West. Eventually, the company cut off negotiations with Atlantic Wood Communications (AWC), citing "too much risk" for electric rate payers. AWC is back, this time negotiating with the City of Key West. Katha Sheehan was at the City Commission meeting Wednesday evening.
City Commissioners "cautiously" approved Wednesday a "non-binding" agreement to hammer out a "definitive and legally binding" final partnership agreement with a fiberoptics communications company which aims to rewire Key West and ultimately create the future fiberoptic link to Cuba.
Atlantic Wood Communications (AWC), a private company, came to the Commission hoping to get a chance to compete with BellSouth and AT&T Cable— not by teaming up with City Electric System (CES), as it tried to do five years ago, but by making an end run around CES and going for a deal with the City.
The carrot dangled by AWC's president, Dwight Wood : a state-of-the-art communications system, lower rates— and a possible $1 million a year in revenues to City coffers.
The deal proposed by AWC: the City would provide easements, data, and maybe even the old Angela Street power station to AWC. AWC would completely rewire Key West over a period of 36 months. At the end of the three years" construction, the City would lease the system back for an amount equal to the annual bond payment on the $45 million of 20-year taxable revenue bonds it would cost to build the system. AWC would provide additional "safety nets" to protect the city in case of shortfall.
The lease-back offers advantages to municipals: "there is no need for a referendum," and "the municipal does not have any `legal' obligation (as opposed to a moral obligation') in case of any default," AWC writes in its notes to City management.
In exchange, the City must give AWC free access to maps, citizen and tax databases, drawings and computer data. It must give AWC "all needed access, attachments and any needed permits" and help the company secure the same in Monroe County as well.
AWC wants to own its physical plant as well— the Angela Street CES property would do just fine. And it wants the City to obtain contracts and franchises for it with Monroe County, the Florida Keys Electric Co-op, the Navy bases, and other institutions here which could deliver new potential customers.
It would compete with BellSouth for telephonic communications and with AT&T for cable distribution. But it would have an advantage they do not share: AWC's partner, the all-powerful City, would take a special interest in its fortunes.
The plum in the pie: AWC is also engaged in similar negotiations with Homestead city government. If AWC can nail both franchises, it stands in an excellent position to "own" the first fiber-optic corridor between Miami and Cuba.