Minutes 09-16-2025-Business Meeting

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14 BACKGROUND: In June 2022, the Board of Commissioners finalized an agreement with North State Communications Advanced Services, LLC (formerly known as Lumos Fiber and now doing business as T-Fiber) to deploy a fiber optic broadband network to 6,370 unserved locations in Orange County. Unserved locations are defined by State law as locations that do not have access to internet service that provides speeds of 25 megabits per second (Mbps)download and 3 Mbps upload. The statutory authority under which the County is authorized to make grants for broadband deployment only allows those grant funds to be used to serve unserved locations. The County funded this public-private partnership with a $10 million grant using American Rescue Plan Act (ARPA)funds. Payments of the grant funds to Lumos are based on performance. Lumos was paid a $1 million start up payment following approval of the contract. The first benchmark of passing 3,000 homes was also achieved which triggered the second benchmark payment of $3 million. A total of $4 million has been paid to Lumos to date. A passing is defined as "a location, such as a home or business, that is near enough to a fiber-optic network to be connected without major construction, typically because the network already runs along the street or right-of-way and is technically ready to be connected for service upon customer request".The original deadline to serve these homes was December 31, 2024. During spring 2024, Lumos began experiencing delays due to construction and budget issues, and much of the construction activity on the project slowed considerably. Those issues were resolved, and construction resumed in earnest in late summer 2024. However, those delays did have an impact on the overall project schedule and the project is over budget.As a result, Lumos has proposed to revise the number of passings to 5,852, completing 92% of the passings in the original contract. The County has also explored alternative strategies to advance project completion should Lumos not continue, including the potential issuance of an RFP to address the remaining passings. The County has complied with the first ARPA deadline by committing ARPA funding through the contract with Lumos by December 31, 2024. Once obligated, the funds can only be used for the purpose specified in the obligation. The final deadline to spend the ARPA funding is December 31, 2026, so this contract amendment does not jeopardize the availability of ARPA funding. To date, Lumos has installed 739 route miles of fiber in Orange County. This network is available to 14,981 total homes including 5,187 previously unserved and underserved homes included in the 2022 agreement. The original Lumos project did not reach all the unserved and underserved homes in the County. These areas have been referred to as doughnut holes where approximately 600 unserved and underserved homes are located. The County has consulted with the North Carolina Division of Broadband and Digital Equity, and the most likely funding solution to serve those homes will be through the Broadband Equity and Deployment (BEAD) and Stop Gap Funding Programs which has the goal of reaching 100% of unserved and underserved homes. The County will also pursue Stop Gap funding to address the gap between the original Lumos contract passing count of 6,370 and the revised passing count of 5,852. The funding process for the BEAD and Stop Gap programs is expected to begin in Fall 2025. County staff will provide updates as more details become available. The agreements and this proposed amendment are between Orange County and North State Communications Advanced Services, LLC, which remains the same legal entity named in the original contracts.Although the company operates under the `Lumos' brand and has been publicly reported as acquired by T-Mobile, the contractual obligations, stipulations, and enforcement provisions remain fully applicable and binding on the same legal entity.