(Dec. 8, 2016) Representatives from FTS Fiber and ThinkBig Networks briefed a few dozen homeowners and members of the Ocean Pines Board of Directors on Monday on the possibility of installing infrastructure that could bring state-of-the-art internet to the community.
The pitch was well-received with one exception: the chief executive officer of FTS also happens to be a board member and the interim general manager of Ocean Pines, Brett Hill, and some trepidations were raised about a possible conflict of interest.
Hill left the room without comment, apparently recusing himself, as the subject came up. Stepping in were FTS Senior Advisor Kenny Lawhorn and Chief Commercial Officer Adam Noll, and ThinkBig CEO Mark Wagner.
Board President Tom Herrick said there was some concern the police department was in need of direct fiber optic connectivity to the Worcester County Sheriff’s Department, and that Hill asked the discussion be placed on the agenda of the monthly public work session.
Director Doug Parks, who recently formed an information technology working group in Ocean Pines, said the meeting with FTS and ThinkBig was a chance to educate the board and to become acquainted with the companies.
No decisions were imminent and he said Ocean Pines was “nowhere near” releasing a request for proposals for the project, but Parks underscored the fact that Hill had left the room.
“He’s going to recuse himself from any kinds of discussion so that there’s no level of impropriety or favoritism,” he said. “We thought that it was in the best interest of everybody involved that he not be part of any of these discussions, even if it’s just information. We just wanted to be very, very safe and very, very correct.”
Lawhorn provided a brief overview in which he said, several times, that he would “love to be a part of the conversation” to bring fiber to Ocean Pines.
A slide displayed during the presentation noted that “‘The Ask’ from FTS Fiber is for the Ocean Pines Directors’ to grant an easement to FTS allowing for the building of a fiber optic network to support ThinkBig Networks.”
Lawhorn said he had not met with Ocean Pines Police Chief David Massey, but said there were some discussions about “improving the public safety capabilities of the Ocean Pines Police Department.”
According to the slide, the cost to connect Ocean Pines to Snow Hill police would be $800,000 “over 20 years.”
Connecting Ocean Pines to Snow Hill was “an investment we’re willing to make for public safety,” Lawhorn said, adding it would be “probably a nonrecurring charge upfront cost to us of about $200,000 and another $30,000 a year over 20 years to maintain the connectivity.”
He “threw in an estimate” he added, for residential hookup in Ocean Pines. Those lines would act as infrastructure that could be leased by a company like ThinkBig and used for a variety of services, from high-speed internet to streaming television services and video conferencing.
However, information packets produced by ThinkBig and available during the meeting seemed to dispel the idea that residential fiber in Ocean Pines was simply a side note.
“Ocean Pines = A Premier Gig Community,” read one page in the packet, referring to the average download speed per second reportedly offered by fiber. “ThinkBig will provide a fully integrated fiber optic infrastructure end to end to the homes and businesses of Ocean Pines. ThinkBig will establish a local office to handle sales and support at Ocean Pines.”
That sheet added “custom business packages” would be available and that residential prices would be $99 per month. Special pricing would be given to residents that signed up early.
FTS and ThinkBig apparently collaborated to bring fiber infrastructure to Kent County earlier this year.
“That’s a concept out there, you can go out and look it up,” Lawhorn said of the fiber lines. “Right now you’ve got old copper planted out there, you’ve got old [coaxial cable] planted out there and really they all offer different services, but really where things are going with the future it’s fiber to the home.”
Director Cheryl Jacobs expressed reservations.
“I’m sure it’s a huge opportunity for Brett’s company,” she said. “Exactly what would be the  value of it to FTS if this were granted?”
Lawhorn said he did not have those numbers, but that he was “looking more at the risk side of it.”
“Right now it’s probably a $10-$15 million investment,” he said. “The  value, over time, would be in how many homeowners could we capture and how many lines could be leased to Mark.”
“It’s utility-like in the concept in terms of the investment, so it’s a long-term investment,” Noll said. “The  value overall is the fact that Mark wants to be our customer. Without Mark we wouldn’t be looking to lay the fiber in Ocean Pines, because this is something he was interested in doing.”
Jacobs asked what, exactly, the  value would be in leasing that infrastructure.
“There’s a real need to get broadband out to the underserved communities,” Noll said. “We’ve secured the funding to know that if we can get the business case in, we can build out, essentially, a spider web of networks through to Delmarva. Thue is long term.”
Just like any customer that’s getting internet service, Noll added, “there’s a monthly bill.”
“The percentage on that, based on what our agreement [with Wagner] is, that would be funneled back to us,” Noll said.
Lawhorn said FTS is building a “backbone” of fiber lines from Virginia Beach to Baltimore.
“We’re going to be coming through here anyway,” he said. “We get somue by putting a few additional customers onto that backbone. That’s thue to FTS.”
Lawhorn added that value would likely be “pretty small in the scheme of things with the overall investment that FTS is going to make.”
“The question is, I don’t know how important it is for your police department to be connected into a more fiber-optic type real-time network,” Lawhorn said. “To me, that’s kind of the part I saw initially. I haven’t even run the numbers to say, ‘how much money will FTS make on this?’”
In her mind, Jacobs said there was a “serious conflict of interest with Brett, who serves not only as a director, but as the GM.”
“I have concerns about that,” she said. “I understand you’re not doing this for free – there’s got to be somue and you’re going to make some money off of this, otherwise you wouldn’t be interested.”
Other directors seemed less apprehensive, with one comparing the accusations of impropriety to those facing President-Elect Donald Trump.
“Welcome aboard,” Slobodan Trendic said. “As far as thue and the investments, obviously it’s a question of conflict of interest. Mr. Trump is dealing with the same [thing] at a slightly larger scale, but I welcome the initiative.”
According to Parks, a further discussion on fiber would not be part of the regular board meeting Friday. Still, he said Ocean Pines should not focus “just on the police department” in terms of fiber.
“The idea here is that’s sort of the initial circumstance that came up to stimulate these conversations, but [its] clearly not the only thing.”
Resident Joe Reynolds added a final note of concern, which abruptly ended the conversation.
If former General Manager Bob Thompson had brought a similar proposal to the table, he said, “I think there would have been the weeping and wailing and gnashing of teeth like you have never heard out of Ocean Pines before.”
“Let me say it, I think this is a wonderful idea,” he said. “[But] I think if Brett Hill wants to do it I think Brett Hill ought to resign from the board of directors and his position as general manager.”