KentuckyWired, the massive state-led broadband effort, is running into the same issue experienced by smaller internet projects — gaining quick and easy access to utility poles on which to install fiber-optic cable.
The government agency formed to oversee the project may shoulder some of the blame.
Chris Moore, executive director of the Kentucky Communications Network Authority, created in August 2015, said delays in reaching agreements for such pole attachments have put the project behind schedule.
MOORE: Recently told lawmakers KentuckyWired is behind schedule.
He recently told lawmakers on the Budget Review Subcommittee of the General Government, Finance and Public Protection Committee that the first phases won’t be complete until late 2017, nearly a year later than anticipated. The entire project won’t be done until early 2019, he said.
The initial work will connect mostly rural southeastern Kentucky, and a handful of major cities.
“Construction of key infrastructure to the SOAR (Shaping Our Appalachian Region) of southeast Kentucky and to the Golden Triangle, Frankfort, northern Kentucky, Louisville, is the first priority,” Moore said at the meeting. “In order to serve the state government’s needs, we must build to the seat of government, Frankfort, and bring the central Kentucky area online to connect to the internet.”
KentuckyWired calls for the installation of more than 3,000 miles of fiber-optic cable across the state, and 85 percent of that cable will be connected to utility poles.
“They anticipated that a lot of [the poles] would be public right-of-ways, not privately owned, and of the privately owned, they miscounted thinking that a lot of them were owned by electric utilities and other entities, but it turns out that a lot more of them were owned by AT&T and Windstream,” Moore said.
Moore said delays in reaching agreements with the providers contributed to the stall. Similar issues have arisen in Google Fiber’s planned expansions in Louisville and Nashville.
RELATED: Another broadband battle looms in Nashville over utility-pole access
Joe Burgan, spokesman for AT&T, told Watchdog.org that his company entered into an agreement with KCNA on April 25, more than four months before Moore’s meeting with lawmakers.
“The agreement allows KCNA to use AT&T infrastructure as they work to deploy fiber to the state network,” Burgan said.
KCNA didn’t file the paperwork with the Kentucky Public Service Commission to operate as a competitive local exchange carrier until Nov. 6, 2015, about three months after former Gov. Steve Beshear signed an executive order forming the authority, possibly contributing to some of the delay. KCNA needed to complete that process before negotiating utility-pole access with existing carriers.
KCNA partnered with six companies, including Australian-based Macquarie Capital, the lead developer of the project, and network construction began in September 2015 after those contracts were finalized, Moore told lawmakers.
He said to lower costs and include the private sector, KCNA is partnering with telecom providers and rural electric cooperatives to piggyback on existing infrastructure. The authority signed an agreement with Cincinnati Bell to partner on construction costs in northern Kentucky, which should save about $3 million, he said.
Also, KentuckyWired will not complete what’s known as “last mile” services. Instead, local internet providers will run fiber to homes and businesses.
Moore may have emphasized those partnerships due to the pushback some state officials have gotten over the project. The House Special Committee on Advanced Communications and Information Technology, created in response to KentuckyWired, is working to make sure local telecom providers are included in the project’s rollout.
Greg Hale, general manager of Logan Telephone Cooperative, which provides telecom services to six exchange areas in south central Kentucky, called the project “unnecessary” in a recent op-ed.
“Although the architects of KentuckyWired have misled many to believe otherwise, local telecom providers around the state are already building the infrastructure needed to bring high speed internet to those who don’t currently have it,” he wrote. “KentuckyWired, which will be paid for by state taxpayers, should leverage the work that local companies have already done instead of paying outside, foreign companies millions of dollars to build a duplicate, and ultimately unnecessary, network.
“If not managed appropriately, KentuckyWired could force local telecom providers to compete with a government-subsidized network financed by taxpayers. This would create an unfair playing field that could harm member owned cooperatives and municipally owned networks. At its worst, KentuckyWired could hinder existing providers’ ability to serve new customers, and could even eliminate much needed telecom jobs in our communities.”
Jim Water, president of the Bluegrass Institute, a free-market oriented think tank, told Watchdog.org the delays will cost taxpayers.
“This is like a mortgage,” he said. “The payments have already begun on this. Without any customers online this will be paid for nonetheless.”
WATERS: State officials need to get their story straight on new scope of KentuckyWired.
The project was originally slated to cost about $325 million, with the bulk of the funds (about $271 million) coming from the sale of bonds.
Those bonds were sold with the understanding that $11 million annually in federal dollars to connect schools with broadband would flow to the project. But a conflict-of-interest issue that arose when former finance cabinet deputy secretary Steve Rucker became head of KCNA — he has since resigned — resulted in the state abandoning the bid process for that money.
Gov. Matt Bevin, who took office in January, said at a recent SOAR conference he planned to scale back KentuckyWired, but he hasn’t offered specifics.
“The Bevin administration is forced to walk behind the former administration with a pooper scooper in their hand, and I’m not sure there’s a pooper scooper big enough to clean up this mess,” Waters said.
RELATED: KentuckyWired’s smaller scale ‘a partial victory’
Waters is baffled about why KCNA keeps talking about the project covering the entire state, given Bevin’s announcement at SOAR that KentuckyWired would not extend west of Interstate 75.
“Why are they still talking about wiring the whole state when the governor said this would be scaled back?” Waters asked. “Are they just ignoring what he said?”
Bevin’s communication office didn’t return Watchdog’s request for comment on the discrepancy. KCNA also didn’t return a call.