The price of V.I. government agencies’ Internet service bandwidth is dropping by more than 80 percent in the Bureau of Information Technology’s latest ISP contract, thanks to cheap bandwidth available through the V.I. Next Generation Network, BIT Director Reuben Molloy told senators during budget hearings Tuesday.
Molloy testified that BIT issued a request for proposals for an Internet service provider, and the new contract with Orbitel will cut the current price by 84 percent.
Historically BIT has paid a high of $675 per megabit per second and is currently paying $210 per megabit. But with the new contract with Orbitel, to connect to the VINGN, "BIT will shortly be paying $33 per meg. This represents an 84 percent decrease in our per-meg cost," Molloy said.
Lawrence Kupfer, viNGN president, has said network will be able to sell bandwidth very cheaply, because it has prepaid for 30 years worth of bandwidth with federal and local grants that do not need to be repaid by viNGN or its customers. (See: VINGN Shows Off Super-Fast Broadband in Demo in Related Links below)
Some senators expressed doubt about the numbers Molloy gave.
"I disagree with the numbers for Orbitel," said Sen. Nereida "Nellie" Rivera-O’Reilly. "We need to be clear on the record and not misinform the public," she continued. She did not say why she disagreed.
Sen. Craig Barshinger said Molloy’s testimony raises "an irresolvable paradox."
"Two weeks ago, under oath, ISPs said the viNGN was offering a price that was twice as much as they were getting from somewhere else, from another ISP … How can this be?" Barshinger asked. "How can we, as a Legislature, resolve a statement like that, made on the record under oath, with the fact that you have chosen Orbitel because it was much less expensive?"
Molloy replied, “Do you want to put me under oath right now? Because I approve all our IT purchases and I know what we are paying," Molloy said, repeating the current price of $209 per megabit/second – or Mbps – and the new price of $33.
When BIT put the ISP contract out for bid last fall, Molloy said, "Orbitel had the lowest quote at $33. The next was $37 per meg, the next was $45 and even the highest one was $50 per meg – even if we take the highest one, it does not compare to $150 or $200. Those are the facts," he said.
Sen. Donald Cole asked if Orbitel were receiving broad tax breaks through the University of the Virgin Islands Research and Technology Park.
"No, it is not," Molloy said.
The Legislature recently overrode the governor’s veto to enact legislation to allow ISPs to receive those tax breaks. The territory’s three largest ISPs: Innovative, Choice Communications and Broadband V.I., are beneficiaries of those tax breaks, as are the two Innovative Cable TV companies. (See Related Links below)
Molloy presented the BIT Fiscal Year 2015 budget request. It includes $2.2 million from the General Fund, a 5 percent decrease from FY14.
That sum will cover the costs of personnel and fringe benefits, supplies, utilities and other services. Molloy also requested $1.9 million from Miscellaneous Appropriation, with $1.1 million to cover the cost of software licensing for all government agencies and $800,000 for maintenance of the government’s information technology infrastructure.
Molloy said BIT had "successfully completed the installation and establishment of a private cloud for the government," storing government information in the Microsoft Cloud at lower cost and higher reliability than if it were stored in server farms within the territory.
He also discussed the implementation of Microsoft Office 365 as the e-mail solution for Executive Branch departments, saying that 71 percent of government agencies are currently using it and that it has the potential to save the government up to $142,000 per month, once every government agency, sub agency and semi-autonomous agency are on board.
Listing other accomplishments over the past fiscal year, Molloy said BIT has upgraded the Avaya Voice Over Internet-protocol telephone system to enable Executive Branch access to all agencies from one telephone number, and has promoted use of the established video conferencing infrastructure to save money and increase efficiency, among other efforts.
In the upcoming year, BIT has plans to implement a governmentwide IT security program; help facilitate connecting all government agencies to the viNGN infrastructure; complete the 911 Tower Site Enhancement Project that was started in June of 2013; connect all remaining Executive Branch agencies to Microsoft Office 365; and expand the unified telephone system and video conferencing infrastructure, among other plans.
No votes were taken during the information gathering budget hearing.
Present were O’Reilly, Barshinger, Sens. Clifford Graham, Donald Cole, Judi Buckley, Myron Jackson, Terrence "Positive" Nelson and Clarence Payne.