Business plan was in the works for over a year
Action calls into question Rockfords no-bid communications contract
One of Rockford Mayor Doug Scotts planks in his re-election platform has been a high-speed communications network, which has been the subject of three investigative articles by The Rock River Times since December. The citys $600,000, no-bid contract signed last October, which was awarded to a member of the mayors original Broadband Technology Task Force, will likely gain more scrutiny after Michigan-based US Signal Company, LLC, announced plans to offer more new jobs and services than the citys contractor, Metro Fiber Solutions Inc.
The Rock River Times learned of US Signals plans March 10, which was in the works for over a year, at the request by US Signals current customers for service availability in Rockford, Madison and Milwaukee, according to Barbara Boshoven, vice president of business development for US Signal.
Boshoven said the announcement means US Signal will be in direct competition with Metro Fiber, which was awarded the no-bid contract with the city, whose existence was made possible through a lease of fiber strands in the communications cable from US Signal.
The fact that US Signals business plan was in the works for over a year calls into question why city administrators hired a middleman for the communications service when they could have contacted US Signal directly for the same service. City Legal Director Ron Schultz responded to a question Dec. 28 as to why city officials didnt contact US Signal to inquire whether the company was interested in providing the service Metro Fiber was offering by saying: Why would we?
Scotts administration persuaded City Council members to award the no-bid contract last fall to Metro Fiber to utilize the largely dormant 22-mile fiber-optic cable ring beneath the city for high-speed communications between various city offices and two hospitals. Fiber-optic cable is composed of dozens of individual glass strands that transmit information in the form of light.
One of the owners of Metro Fiber, Richard Elk, was on Scotts original Broadband Technology Task Force in 2002. Elk established Metro Fiber about one month before the task force submitted its December 2002 report to Scott concerning broadband technology applications in Rockford.
During the time the task force existed, the group learned the fiber-optic ring was beneath a large part of the city, and was available for lease from US Signal. The other owner of Metro Fiber is Tammy Eighmy. Elk said during a Dec. 23 interview that all questions concerning Metro Fiber should be referred to Eighmy, who did not respond to messages for comment about this article.
The citys contract with Metro Fiber calls for connecting six locations that are composed of seven facilities: City Hall, the Fire Department administration building, Public Safety Building, City Yards, Cedar Street water shop, Rockford Memorial Hospital and SwedishAmerican Hospital. However, the contract does not stipulate Internet access for the closed-circuit network.
Boshoven said US Signals plans include the following:
Expanding its high-speed communications network to include Rockford, Madison and Milwaukee. Service will be available in July in cities served by SBCa telephone service provider.
Initially, four to eight new jobs will be added to the payroll in Rockford and Madison to support the network expansion.
Offer Internet access to Rockford-area businesses at T1 levels or greater.
Provide private line services for two or more locations that are used for data networking and voice applications.
Connecting end users to US Signals fiber-optic communications ring with availability in certain locations in the third quarter of this year.
Network expansion was in the works for more than a year in response to requests from US Signals customers for increased services in Rockford, Madison and Milwaukee.
Rich Postma, president and chief executive officer of US Signal, said he learned about the no-bid contract in November when The Rock River Times contacted him for comment about the first article in the news series. He added US Signal would have liked the opportunity to bid on the project, but he wasnt aware of the citys plan.
According to Schultz, no one from the city telephoned US Signal to ask if they were interested in competing for the project. Instead, Schultz said Dec. 28 that Glenn Trommels, the citys Information Services manager, merely examined US Signal Companys Web site to confirm that US Signal wasnt interested in competing with Metro Fiber for the project.
The result means, in effect, the city is leasing two fiber-optic strands and its necessary equipment and services from a middleman for $10,000 per month for five years when they may have purchased the same or similar equipment and services from US Signal or other companies at possibly a lower cost, if an open proposal and bid procedure had been publicized.
Rockford City Council members approved the contract with Metro Fiber in a 13-1 vote. Ald. Dave Johnson was the lone no vote on the contract.
Johnson said during an interview in December: I knew something was not right. We hadnt put this out for bid, and I dont think they thought anyone would check up on this.
When asked if he was aware that a former task force member was the recipient of the lease at the time of the Council vote, Johnson replied, Not at all, and I gotta tell that this fiber optic thing is really … wow!
It sure doesnt look good with the idea that people on the commission got the contract. I have a report that I asked the mayor for last night from the 2002 commission that says there were other bidders out there. I dont think whats in that report is out there for public knowledge. What we do know is that it appears that people on the committee and involved in helping the committee took and made financial gain, and that there were other companies that could have made the service but were never contacted, including US Signal, Johnson said.
Scott issued an e-mail March 15 that read: Our goal is to increase the availability of affordable, high-speed Internet connections for the business community in Rockford. We welcome U.S. Signals decision to enter the marketplace. Having this service available is important for economic development in our community.
Schultz called the first article in TRRTs series irresponsible and politically motivated.