[1st-mile-nm] Sandoval Broadband Update Articles

[Richard Lowenberg]

This lengthy posting includes three recent reports from the Albuquerque
Journal, on the Sandoval County wireless/broadband project, which
unfortunately (for many reasons) is troubled by recent State Auditor
investigations, managerial changes and concerning speculation about the
project.    Stay tuned to the 1st-Mile email list for updates.

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[May 18, 2007]  (Albuquerque Journal (NM) (KRT) Via Thomson Dialog
NewsEdge)

Auditor Demands Firm's Finances: Sandoval Broadband Is Subject of 2
Subpoenas

State Auditor Hector Balderas said Thursday that his office has issued two
subpoenas to contractors working on the Sandoval Broadband project.

Former Sandoval Broadband Chief Executive Officer Dewayne Hendricks and
the countyowned Sandoval Broadband company were issued subpoenas to turn
over financial documents relating to the project last week, Balderas said.

Although the state auditor's office has the power to issue subpoenas
through the 1st District Court in Santa Fe, the power is rarely -- if ever
-- used, he said.

Sandoval Broadband aims to provide cheap ultra-high-speed Internet access
to Internet providers across the entire county.

Speaking to the Sandoval County Commission, Balderas made it clear that,
although subpoenas have been issued, the investigation into project
finances was still in an early stage. "We merely are in the fact-gathering
stage at this point," Balderas said.  Balderas' office has been conducting
an audit of the project since February.

Balderas said two document requests, which were delivered by county
personnel in a "prompt and courteous fashion" since the audit began, did
not answer all the auditor's questions.
"I still found there were concerns," he said.

Hendricks resigned from his post as CEO last week, shortly after a private
investigation firm hired by the state auditor began looking into the
project.

Hendricks, who is also CEO of the Dandin Group that was contracted early
in the project to install network infrastructure, resigned as head of
Sandoval Broadband shortly after the investigation began.

Hendricks and his company are still contracted to deliver three working
pilot projects in Cuba, Bernalillo and Jemez before the end of June.

About $3 million in county and state funding has already been spent on the
project, but only one stable connection in the network -- between Downtown
Albuquerque and the county courthouse -- has been established.

The goal is to create a working and tested network, then sell it to
private business on the condition that county schools, health facilities
and emergency services get free access to the signal.

But the project has been beset by delays and vague accounting practices --
including invoices signed off by County Manager Debbie Hays that included
little or no detail on where project funds would be spent.

Missing invoices and an incomplete equipment inventory have also plagued
the project.

Balderas also addressed when the county's fiscal year 2006 audit would be
released back to the county, a major concern for commissioners.

He said a private audit firm would be finished reviewing specific
financial details regarding Sandoval Broadband, and the auditor's office
could release the audit as soon as the end of next week.

Commissioner David Bency said timeliness in receiving the audit was
extremely important, as the county is trying to get a $10 million bond for
a new administrative building.
"Sometimes, time is of the essence in bond markets," Bency said.

Other commissioners defended the county's broadband project policy but
encouraged the auditor to continue to dig into finances to resolve any
issues.
"This is a great project we are attempting to do, and we will move forward
with it," Commission Chair Don Leonard said.

Leonard said the county had run into problems because the United States is
behind in broadband technology and the county was forced to use a
trial-and error system. He referred to the system as a "living
laboratory."
"We might not have gotten 100 percent of the value on our dollar, but I
think we got a pretty good value," Leonard said.

Commissioner Jack Thomas said the county and its staff had done "nothing
wrong" by promoting and funding the project.

County officials have touted successes in projects that will benefit from
a working network, such as an Internet education program and a
post-traumatic stress initiative.

Through the network, the cost of bandwidth in even the most rural parts of
the county would be lowered from the current rate of $150 per megabit a
month to $50 per megabit a month. A megabit is a measurement of bandwidth.

However, the system must work and take on clients for the prices to affect
residents.

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[May 19, 2007]

Sandoval Broadband Defaults on Contract

Sandoval Broadband has defaulted on its contract with signal provider IXNM
Inc.

The company had until 5 p.m. Friday to pay $36,000 to IXNM to satisfy
contract requirements or face having the signal shut off, and it missed
the deadline, IXNM president John Brown said.

The signal is the only source of bandwidth for the Sandoval Broadband
project.

Brown said his company had not received the monthly $9,000 subscription
fee by the due date of May 1 and subsequent invoices have yielded no
contact from the company.
"We don't have a very high confidence there is anyone there to write the
check," Brown said.

Payments had been made by Sandoval Broadband for the preceding months of
the contract.

County Information Technology director Mike Hoag said Friday the county
was hustling to put together its own contract with IXNM and have service
continue through the network uninterrupted.

Hoag said three quotes must be obtained for similar service to satisfy
contract procurement rules, but the process would be complete by Monday.
"We are dedicated and committed to finishing this contract," Hoag said.

Sandoval Broadband was created with county funding in late 2004 to oversee
a wireless broadband project that would provide cheap ultra-high-speed
Internet access to providers across the county.

Dewayne Hendricks resigned as chief executive officer of Sandoval
Broadband two weeks ago as private investigators began reviewing project
finances at the state auditor's request.

State Auditor Hector Balderas confirmed Thursday that Hendricks and
Sandoval Broadband have been served subpoenas for project financial
records as part of the investigation.

The Sandoval Broadband project has the goal of creating a working and
tested wireless network that will, in time, be sold to a private company
on the condition that county schools, health facilities and emergency
services continue to get free Internet access.

Sandoval Broadband has already spent $3 million in state and county funds
in two years.

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Wednesday, May 23, 2007      By Sean Olson, Journal Staff Report


Pacts Move Broadband Project Ahead

Sandoval County has finalized two contracts designed to keep its Sandoval
Broadband project moving forward.

County officials hustled to put together a contract at the end of last
week that would prevent losing the only signal used to power the Sandoval
Broadband network. The one-year contract was signed and finalized Tuesday
after proper procurement guidelines had been followed by the county,
county Information Technology director Mike Hoag said.

Another contract, between the county and wireless Internet experts
Metlogix of San Diego, was finished last week. Metlogix will be doing a
project assessment of Sandoval Broadband for about $20,000, Hoag said.

The Sandoval Broadband project endeavors to bring cheap ultra-high-speed
wireless Internet access to service providers across the entire county.

Sandoval Broadband, a company formed at the beginning of the project to
oversee its deployment, failed to pay bandwidth provider IXNM for the
network's signal by Friday's due date.

The signal would have been cut off if the county had not set up a separate
contract with IXNM.
IXNM president John Brown said he left the signal on throughout the
weekend as part of a "handshake agreement" with the county, giving it time
to put a contract together.

Sandoval Broadband owes the remaining $36,000 left on a one-year contract
to IXNM. The contract was set to expire in August. Brown said he was
weighing the costs of collecting the debt before his company decided how
to try to retrieve it.

The new contract goes beyond the original agreement with Sandoval
Broadband by adding IXNM as a service provider for the county's Internet
service as well as the broadband project, Hoag said.

While exact pricing was kept confidential in the contract, Brown said the
county would be paying between $35 and $40 a megabit per month. That price
is down from about $65 a megabit a month that Sandoval Broadband was
paying, he said.

Sandoval Broadband's yearlong contract with IXNM had been worth $108,000.

Brown said other considerations were taken when negotiating the price with
the county.
"We need to have the ability to deliver a high-speed signal to people who
couldn't usually afford it," he said.

The county also gets Internet service provided by Qwest, which Sandoval
County still has a month-to-month agreement with, he said.

Metlogix, which has a wealth of national and international experience with
wireless networks- including working with Sprint's PCS system, will be
evaluating the progress of the broadband project from its genesis, Hoag
said.

The company will give recommendations on whether the proper equipment has
been used in the project's deployment and specifications on what equipment
to use in the future, he said.
"Now that the (broadband) equipment is not performing, that is the
information (Metlogix) will provide," Hoag said.

Started in late 2004, the broadband project has already spent $3 million
in its quest to get high-speed Internet access to even the most rural
parts of the county.

Beset by delays and vague accounting, including a series of invoices
billed to the county with little or no detail and signed off by County
Manager Debbie Hays, the project has drawn the attention of the state
auditor- who is conducting an audit of the project finances.

State Auditor Hector Balderas confirmed last week that subpoenas had been
issued for financial records of the project to former project head Dewayne
Hendricks, who resigned shortly after the investigation began, and to
Sandoval Broadband.

Jonathan Mann, former CEO and current majority shareholder of Sandoval
Broadband, has said that Hendricks' resignation rendered the company
unable to function and pay its bills.

Hendricks was CEO and the only board member of Sandoval Broadband when he
quit the project.

The project has also been plagued by $200,000 worth of missing invoices
and an incomplete inventory of equipment.

One plus from the project, lowering the cost of bandwidth in the county
through peer agreements with companies involved in the project and other
Internet ventures, has paid off, Brown said.

Hoag said the county would find out today when Metlogix would begin its
assessment.
It will take about two weeks for the company to complete a report on the
project, Hoag said.


Copyright (c) 2007, Albuquerque Journal, N.M.
Distributed by McClatchy-Tribune Information Services.