The Story of CoastNet

"Dark Fiber"

Fiber optics is a technology that permits high-speed communication. A fiber optic network enables users to quickly transmit and receive large amounts of data and information. Fiber optic networks have become a critical part of the necessary infrastructure of economically healthy communities. A key element in Lincoln County’s long-range economic plan is the development of such a network in Lincoln County. However, in the 1990s, the big telephone companies were not yet ready to invest the resources and finances necessary to install fiber optic networks in rural areas such as Lincoln County.

The Central Lincoln People's Utility District (the PUD) provides electric power to the central Oregon coast, including most of Lincoln County and portions of a number of other counties. To facilitate their own internal communications and to enhance the reliability of the PUD's electric power switching network, the PUD installed a fiber optic network along parts of the Central Oregon Coast. Due to economies of scale, the PUD’s fiber network has significant amounts of excess capacity.

The Central Coast Economic Development Alliance (the Alliance) is a non-profit corporation existing for the purpose of promoting economic development and employment opportunities along the Central Oregon Coast. The Alliance became aware of the PUD’s excess fiber capacity, and realized the PUD’s network could provide significant opportunity for economic development and employment in Lincoln County.

The Big Idea

The Alliance and 38 other public and non-profit entities began a project known as "CoastNet." After much discussion and analysis, the CoastNet group created a three-step plan:

Arrange to lease the PUD’s excess fiber capacity through an intergovernmental agreement with Lincoln County;
Purchase necessary equipment to enable the excess capacity to operate as a functioning network; and
Make that network available to attract new business for the purpose of facilitating growth in economic development and employment opportunities.

As for the first step, the PUD and Lincoln County entered into an intergovernmental agreement for lease of the PUD’s excess fiber capacity.

As for the second step, after considerable effort, the Alliance was able to obtain $305,000 in economic development grants for the CoastNet project (utilizing the Lincoln County School District as the fiscal agent for receipt of funds).

The third step presented a much bigger problem. The County and the Alliance asked the Oregon Public Utility Commission (the PUC) to determine that CoastNet did not need a Certificate of Authority from the PUC. The PUC disagreed. The County and the Alliance then asked the PUC to issue a Certificate of Authority for CoastNet. GTE (now known as Verizon) and US West (now known as Qwest) objected. The PUC initially refused to grant a Certificate, saying that it was not in the public interest to grant the Certificate when the owner of the dark fiber (the PUD) was not also certificated (PUC Order # 97-373, Sept 18, 1997).

CoastNet Goes to Court

The County and the Alliance appealed the PUC's decision in state court and to the Federal Communications Commission (Marion County Circuit Court case # 97C-14075, and FCC docket # CCB Pol 97-241).

Following a series of negotiations and compromises, the PUC rescinded its prior order (PUC Order # 98-226, June 3, 1998) and entered an order granting a Certificate to CoastNet (PUC Order # 98-343, Aug 19, 1998).

US West (Qwest) did not appeal the PUC's order, as it had become the largest customer of CoastNet, using some of CoastNet's dark fiber to supplement its own telecommunications infrastructure. But GTE (Verizon) did appeal the PUC order, challenging the authority of Lincoln County to hold a PUC Certificate of Authority in Lincoln, Lane and Douglas Counties (Marion County Circuit Court case # 98C-19114). After briefing and argument, on April 13, 1999, Judge Don Dickey rejected GTE’s appeal and affirmed the PUC.

GTE (Verizon) then filed an appeal from Judge Dickey's decision to the Oregon Court of Appeals (case # A106560).

On January 23, 2002, the Oregon Court of Appeals issued its decision that Lincoln County can hold a Certificate of Authority. GTE (Verizon) and the Oregon Telecommunications Association (OTA) then filed an appeal to Oregon Supreme Court. On August 13, 2002, the Oregon Supreme Court denied review, leaving in place the Oregon Court of Appeals decision.

CoastNet Evolves

In the meantime, the Alliance issued a request for proposals (RFP), seeking a vendor to operate and market the CoastNet system. The Alliance initially selected Casco Communications of Philomath, Oregon.

The Alliance, the County, and the PUD also worked with other entities to expand the reach of CoastNet through the use of other fiber networks and excess capacity. Most notable is the excess dark fiber capacity controlled by the Fiber South Consortium (a group of governmental entities in Coos, Lane, and Douglas Counties), which acquired that capacity from Williams Communications, whose fiber lines carry traffic between the Willamette Valley and the AT&T trans-Pacific fiber line at Bandon. The Bonneville Power Administration (BPA) also has excess dark fiber capacity, some of which is now controlled by the Fiber South Consortium, and some of which was controlled by the Northwest Open Access Network (NoaNet), a nonprofit corporation formed to help provide high-speed telecommunications to the rural Northwest (NoaNet later sold their Oregon fiber assets to LS Networks).

Lincoln County joined the Fiber South Consortium, and the Consortium later selected PCINW (Preferred Connections, Inc, NW) of Lakeside, Oregon, as the vendor for its dark fiber capacity. In order to facilitate the interconnection and development of CoastNet with the rest of the telecommunications world, the Alliance entered into a contract for the transfer of the marketing and distribution of CoastNet from Casco to PCINW, and is currently working on a subsequent transfer to CoastCom.

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[ Updated January 17, 2006 ]