A deal to sell Empire Electric Association’s share of retained fibers to its Durango-based telecommunications company, REANET, fell through this week.

According to Neal Stephens, general manager of Empire, REANET decided not to buy Empire’s and La Plata Electric Association’s retained and pooled fibers because the retained fiber could not be used for telecommunications services.

The fibers are part of a fiber-optics highway that stretches from Albuquerque to Grand Junction. Empire and LPEA are partners in a dark-fiber network agreement with Pathnet, the project manager for the highway’s construction. Empire and LPEA own a share of both pooled and reserved fibers in the agreement.

In order to sell their 4.5 retained fibers to REANET, Empire and LPEA had to negotiate the terms with Pathnet. But although Pathnet agreed to allow the fiber’s transfer, they would not allow it to be used for telecommunications capacity.

As a result, REANET withdrew its $1.5 million offer and $750,000 down payment.

"Pathnet didn’t feel like Empire and La Plata had authority, under that agreement, to sell telecommunications capacity to REANET," explained Neal Stephens, general manager of Empire Electric.

Empire will still reap the benefits of the pooled fibers — fibers owned jointly by all of the highway’s owners — that will be sold to telecommunications companies to provide services to customers.

"When Pathnet makes sales on the pooled fibers, there’s 108 of those, we get 6.25 percent of all the revenues from those sales, and we’ll just recover our investment that way. It’ll just come to Empire Electric instead of REANET," said Stephens.

Instead of using LPEA and Empire’s retained fibers to provide telecommunications services to customers, REANET will have to buy capacity from telecommunications carriers. "I think REANET feels like they can work out a better deal with other carriers, and that’s what they’re going to try to do," Stephens explained.

Empire’s 2.25 retained fibers, those that are not part of the pool, may still be sold or transferred, Stephens said.

Empire and LPEA board members will meet on Monday at 9 a.m. at Empire’s Calvin Denton room to discuss the possible sale of REANET.

"My hope is that we will have some sort of definitive agreement to talk about, negotiate, and pass on Monday," said Stephens.