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Coquilles get Connected in the Internet Business

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NORTH BEND, Ore. - After being told by the local telephone company the new
hotel couldn't be supplied with sufficient service, the Coquille Economic
Development Corporation (CEDCO) decided to take matters into its own hands.

Four years after opening the 115-room hotel at The Mill Casino, not only
does the facility have its requisite telephone capabilities, the property
along Oregon's southern coast is only the second in the entire state to
offer its clientele teleconferencing. This amenity is just one of numerous
benefits arising from CEDCO's decision to operate its own broadband network
system.

Tribal One Broadband Technologies, more commonly referred as ORCA
Communications, is an entity within CEDCO, the arm's-length corporation of
the Coquille Reservation. For the past year, ORCA has operated 19 miles of
fiber optics which provide faster and more reliable Internet and
telecommunications service with a digital subscriber line (DSL) to the Bay
Area and its population of 25,000.

ORCA is part of the largest cooperative in Oregon sharing fiber optic
links. NoaNet (Northwest Open Access Network) consists of seven members and
three non-member participants that permits the lesser populated regions of
the state, including the communities of North Bend and neighboring Coos Bay
that ORCA serves, to be connected with Portland and those cities along the
Interstate 5 corridor.

What excites executives at CEDCO are the possibilities of running what is
likely the nation's first-Indian owned broadband company. Certainly
diversifying the portfolio of CEDCO's assets that have stemmed from casino
profits is an objective, but there is a greater, more common good.

"Our focus was to be involved in the community more by providing a piece of
critical infrastructure that would help fuel jobs and economic
development," said Greg Aldridge, CEDCO's executive director of
development.

With traditional industries of fishing and forestry stagnant, Oregon's
coastal communities like North Bend have struggled recently in maintaining
a stable economic base. Though situated with the picturesque Pacific Ocean
pounding on their backyards, most of these towns are isolated from the
larger centers in the east, separated by the Coast Ranges (a mountain belt
consisting of several ranges and uplands along the entire Pacific Coast of
North America, from Mexico to Alaska). This has resulted in the
apprehension of larger national companies toward providing newer
technologies, like faster Internet services, or as the case with the
Coquilles' hotel, sufficient telephone wiring.

Such deficiencies, surmised CEDCO, would soon choke any chance of altering
the region's economy from its reliance upon natural resources. Following 30
months of negotiations, Aldridge and Karl Kennedy, then a consultant and
now ORCA's chief technical officer, convinced the tribal council to proceed
with the project at a cost of $2 million. With another seven months to hang
most of the cable along existing telephone poles (only 5 percent of the
fiber optics are underground) and to test the system, now one year into
business, ORCA has 16 clients ranging in size and requirements.

"We're very flexible and scalable and with our technology, we can tailor
our network to fit the customers' needs," Kennedy said.

Known as a carrier's carrier, ORCA has the ability to sell its services
directly to local purchasers or to other national Internet companies. What
makes ORCA's system more attractive is the "redundant" loop of cable that
weaves its way around the Bay Area and is connected to the statewide system
at two junctions. Should there be a cut along the circuit, service is
uninterrupted because of the continuous line.

Besides providing digital access for the Internet to individual homes at
$30/month, ORCA has corporate and public-sector clients including the local
hospital, library and Southwestern Oregon Community College, which receive
other services for up to thousands of dollars per month. This allows, for
example, distance learning for rural high school students with the college
while doctors on-call can make diagnoses from their home once information,
like an x-ray, is downloaded from the hospital.

Aldridge believes this technology is important to other reservations
because of their traditionally geographical isolation from cities. Both in
Oregon, where NoaNet exists, and eventually in other states where coops
will likely form, he sees the benefits of being hooked up as numerous.
However, the focus of an Indian-owned broadband system needed to be applied
outside of the reservation first because of economics.

"Our tribe is not big enough to justify doing this to provide just Internet
service for the reservation," said Aldridge of the tribe's enrollment
numbering around 1,000.

When the time comes, at a likely cost of several hundred thousand dollars,
the Coquilles, located about eight miles from North Bend, will be linked
and the asset of high-speed Internet will be noticed immediately. Fifteen
times faster than using a dial-up telephone line, DSLs also keep phone
lines available for regular calls.

"It would provide the community organizations with a reliable, less
expensive Internet service for the community center, police and medical
health services," said Kennedy.

As ORCA continues to be reliant on CEDCO for cash flow, in part because of
the high up-front capital costs needed to initiate this business, it's
estimated that within three years the company will generate its own money
once other local businesses are freed from their long-term contracts to
their present Internet providers and sign up with ORCA. The company also
estimates it will be by the end of the decade before it starts to turn a
profit.