No deal for Waupaca Online
The city of Waupaca’s high-speed, wireless Internet service is back on the market.
"We are hopeful that by the Finance (Committee) meeting in July, that we will know for certain whether we’ve got a proposal or not. We still have the possibility of being purchased. The system still has value," City Administrator Henry Veleker said Monday, June 11.
The city is seeking a new buyer for the utility after Northern Telephone and Data, of Oshkosh, gave the city notice that it is no longer buying Waupaca Online.
In a June 8 memo to the city’s Finance Committee, Veleker wrote, "As you know, the NTD sale has fallen through. There are, however, two possibly three companies expressing interest in a purchase. Staff have met with two of the companies and is trying to arrange a meeting for the third. One company will need through the end of June to tell the city if they will offer a purchase proposal. The other firm did not commit on a specific timeframe."
When contacted on Monday morning and asked when the sale with NTD fell through, Veleker said, "I received a call in mid-May from NTD saying they will likely pull the plug."
He asked to meet with the company, and they did.
A week later, the city received notice that the company was taking its offer off the table. That was about three weeks ago.
When Veleker received the initial phone call from NTD, he contacted the companies the city had talked to in December and January regarding the sale of Waupaca Online.
Two of the three companies that are interested in the utility also looked at it in the last round.
When the Common Council approved the sale of Waupaca Online to NTD, it was for a price of $225,000.
That approval was in February, and Veleker said NTD’s desire was to close on the purchase by April 30.
After the passing of that date, the city hoped to close on the sale by the end of May.
There were several issues the city needed to work through, Veleker said, including a de-certification of the public utility by the Public Service Commission.
That was granted.
Also needing to be addressed is the city’s lease assignment for its equipment on the Mount Tom tower, now owned by SBA Tower.
"We have the right office with SBA Tower to get the assignment of the lease done," Veleker said. "We know where to go and get that done."
The city has also been working with the city of Weyauwega regarding a lease agreement for the equipment Waupaca has on Weyauwega’s water tower.
NTD learned that the connection in Weyauwega does have enough bandwidth for the speed NTD wants, Veleker said. The linadequate bandwidth in Weyauwega is why NTD is not buying Waupaca Online.
The economics would not work for the company, Veleker said, explaining that NTD did mention in its proposal to the city that the bandwidth was important.
The city continues to operate off of Weyauwega’s water tower. "A new buyer would likely want to use that tower. We still would have to get that lease assigned," he said.
Veleker said the city required a surety bond of $12,000 from NTD. He said NTD must forfeit the bond since the company did not close the deal.
City Attorney John Hart will review the city’s claim to the $12,000.
Of the sale falling through, Veleker said, "I’m frustrated. It’s disappointing, but we have identified some other firms that are interested. I’m hopeful we can still follow through and make the sale happen as the council wishes."
Waupaca Online has approximately 275 customers, and he said the city is committed to continuing and improving the service,
In a press release on that topic, the city reminds the customers and the public "that the Internet service provided is not going to end in the foreseeable future. We continue to work on long-term plans to continue to offer a competitive choice for Internet service to the Waupaca area and specializing to serve customers who have no other option."
The city continues to work with several regional companies that are interested in acquiring Waupaca Online.net, as requested by the Common Council.
"The goal is to find a company who specializes in Internet service who will be able to provide 100 percent effort and focus on growing and improving the service. City staff have met with these companies who are enthusiastic about the options to serve Waupaca area residents.
"Whether the city continues to operate Waupaca Online.net or another company acquires the service, plans are under way to expand customer’s bandwidth to provide faster Internet service. Customers have no need to be concerned about their Internet service. A smooth transition is expected as the Internet service evolves," the press release states.
It was about 10 years ago that the city undertook the Waupaca Online project.
"If we get an offer, we should be able to close it quickly, within 30 days," Veleker said.
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9 Comments for "No deal for Waupaca Online "
After this public debacle, they won't see an offer north of $100,000.
"FIRE VELEKER" - I think that covers it.
I've never seen a so-called business administrator who thinks that taking 6 weeks to get the right person on the phone is "normal". He writes checks to these contractors EVERY MONTH - and he can't get an account rep on the phone, week, after week, after week, after week, after week...
He thinks the city is ahead, because they picked up $12,000 in cold, hard cash.
I can see it now - the city will be paying Ralph Schmal $50,000 to take it over!
In the mean time, maybe we can spend more money on marketing a new logo and new name:
WAUPACA[b]ONSALE[/b].NET
lastpercentile Jun 11, 2012 3:31 PM
I have much more respect for the company that walked away that I did before. I think they came in, seen how bad it really was, and decided 12k to walk away.... not a bad price!
But where else can you get the snap skill set of Ralph Schmal, IT expert. Maybe Ralph and Veleker can start their own ISP business. Should be plenty of "hidden" money they can use to fund the start up.
BTW I luv the WaupacaOnSale.net lastpercentile.
In the spirit of the county wide garage sale for last weekend we can sell it to the first 25 cents that someone gets to Ralph! Good luck finding him, can make it like a scavanger hunt thing! :K)
jdnim Jun 11, 2012 4:09 PM
trh13 Jun 12, 2012 2:58 PM
It's the customers outside of town, with no other options, who benefit the most from the availability of local WAN. Which is why WONSALE should have been building its customer base there - instead of sitting in their office (...reportedly working on their part-time businesses).
The city council never understood that a "city" utility's profits existed outside the city - which is reason #17 that the utility died a very ugly death.
lastpercentile Jun 12, 2012 8:11 PM
Waupacaeye Jun 12, 2012 8:16 PM
independenthinker Jun 13, 2012 7:10 AM
JustBecause Jun 13, 2012 10:18 AM
[/i]
Are we REALLY suppose to believe this? So this company willy nilly puts up a 12k bond without evaluating the entire network to determine if it meets the companies band width requirement? I don't think so.......
chesteroowi Jun 13, 2012 7:04 PM
[u]May 9, 2012:[/u] [i] "Veleker said that when the Common Council agreed to sell the city's Internet service to NTD, it agreed to do whatever it could to negotiate more bandwidth"[/i]
And they did "whatever they could" - and here we are.
lastpercentile Jun 13, 2012 10:50 PM