The fifth anniversary of the announcement of the KentuckyWired project is approaching later this year. As voters start to assess their candidates’ job performance, the unfinished and over budget middle mile public-private partnership (P3) has become an albatross that incumbents aren’t able to easily cast off. When we last discussed the project in 2017, we shared our observations and misgivings. Not much has changed, except some of our concerns have played out and the project has become troubled by new problems.

In Case You’re Just Arriving to the Party… 

The statewide, massive middle mile project officially began when Kentucky announced in late 2014 that they would build a fiber optic network in order to bring better connectivity to rural areas. They planned to find a private sector partner and sought bids. In the fall of 2015, Australian firm Macquarie won the contract for what soon became an even larger endeavor — a fiber optic network that would enter every county in the state at a minimum of one location. The network would consist of approximately 3,200 miles of fiber and connect about 1,000 public facilities. At the time the project was developed, the state estimated that deployment would cost approximately $300 million.

With early bipartisan support, the state allocated $30 million from their budget, which they expected to combine with $23.5 million in federal grants. When the Kentucky Economic Development Finance Authority issued $232 million in tax-exempt revenue bonds and $58 million in taxable revenue bonds to complete financing, Bond Buyer named the issue the “Deal of the Year” for 2015. Macquarie’s timeline estimated an optimistic one-year completion for the entire statewide project.

During this legislative session, state lawmakers in several states passed bills that allocated funds to broadband deployment and planning programs. In many states, elected officials are listening to constituents and experts who tell them that they need fast, affordable, reliable connectivity to keep their communities from dwindling. States that refuse funding to public entities, however, block out some of the best opportunities to connect people and businesses in rural areas. In places such as Michigan, Tennessee, and Virginia, states need to trust their own people to develop necessary broadband networks.

The Great Lakes State: Not Great at Supporting Local Broadband

Michigan’s HB 5670 caught the attention of community broadband advocates when it was introduced by Representative Michele Hoitenga in 2018. The bill was firmly anti-municipal network and after some investigation, it became clear that Hoitenga received guidance from lobbyists from big cable and telephone monopolies. HB 5670, with its sad definition of “broadband” and attempt to fork over state funds to big national ISPs didn’t go anywhere alone after word spread.

Folks from the Michigan Broadband Cooperative (MBC) and other constituents in rural Michigan voiced their concern and the bill seemed to disappear. In reality, the House folded the language into SB 601, a large appropriations bill, which has now become law. Section 806 lists the types of entities that are eligible to receive grants from the $20 million set aside for infrastructure -- public entities are specifically eliminated.

For several years now, Tacoma, Washington, has pondered the fate of its Click! municipal open access network. In the spring of 2018, the community issued an RFI/Q searching for interested private sector partners that would lease the network from the Tacoma Power Utility (TPU). After reviewing responses, consulting experts, and comparing potential arrangements, Tacoma has narrowed the field of possible partners. The goal is to put the network on a sustainable and competitive footing both financially and technologically. Tacoma is following a path that will retain public ownership of the Click! network as the network continues to expand.

Click! has offered considerable benefits during its lifetime, but the network retains considerable debt even as it will soon require more upgrades to continue competing with Comcast. The cable television system is rigged against small operators and while the open access Internet side creates many benefits, Click!’s ISPs just don’t have enough subscribers to make the network financially viable into the future.   The discussion around Click’s finances are complicated because the broadband network is used for both external customers and internal utility uses -- the rate modeling around how to allocate costs is a process that requires subjective analysis (e.g. should the costs be allocated based on bandwidth or evenly split among each service). Some have credibly accused past TPU officials with cooking the books to make Click!’s financial status worse than it actually was. Nevertheless, Click! still doesn’t appear to be financially sustainable when costs are allocated more reasonably. Given the upgrades needed by the cable system, we fear that preserving the status quo will do more harm than good to the community over the medium and long terms; Tacoma needs to make a change to avoid being stuck solely with the broadband monopolies that plague the rest of us.

Current lawmakers in the Vermont House have rapidly advanced H 513, a bill that addresses both policy and funding hurdles in an attempt to expand broadband throughout the state. After a vote of 139 - 2, the bill went on to the Senate on March 26th.

Looking at Local Models

H 513 recognizes that more than a quarter of the state’s premises don’t have access to broadband speeds as defined by the FCC, 25 Megabits per second (Mbps) download and 3 Mbps upload. The state’s Department of Public Service, which assembled the data, also determines that almost a fifth of premises can’t obtain speeds of 10 Mbps / 1 Mbps. With so many rural communities hurting for access to fast, affordable, reliable connectivity, state lawmakers are anxious to find tools to expand broadband across Vermont.

Legislators note in the language of H 513 that they believe the FCC’s “light-touch” approach toward expansion of broadband:

“…does little, if anything, to overcome the financial challenges of bringing broadband service to hard-to-reach locations with low population density. However, it may result in degraded broadband quality of service.”


H 513 goes on to acknowledge that grassroots approaches that use local knowledge and support will be the most successful in Vermont.

Lawmakers and their staff have lauded ECFiber as one model that works in a place like Vermont, where many smaller communities can pool their resources and work together to develop a regional network. As the Communications Union District has developed over the years and dealt with funding challenges head-on, it has become apparent that access to capital is one of the most difficult hurdles to overcome.

Funding for Innovation

In order to help local projects, H 513 will establish the Broadband Innovation Grant Program within the Department of Public Service (DPS) and the Broadband Expansion Loan Program within the Vermont Economic Development Authority (VEDA). 

Governor Jay Inslee started to promote his bill for better broadband earlier this year and, with any luck, Washington will have a solid foundation to expand broadband before the end of this year’s legislative session. SB 5511, a measure backed by the Governor, has sailed through the Senate, and has now appeared in the House. The bill establishes a State Broadband Office and earmarks funding for local broadband initiatives.

The bill is on the agenda for today's House Innovation, Technology & Economic Development Committee meeting at 10 a.m. PDT.

Difficult But Doable

In order to bring high-quality Internet access to all of Washington, millions and possibly billions of dollars of infrastructure investment are required. No one is certain how much completing the task will cost, and obtaining a better estimate will be one of the tasks of the State Broadband Office (SBO), which will be created by SB 5511. The bill allocates $1.2 million for the SBO.

Rural communities, economic development organizations, and tribes have all supported a measure to establish state investment in broadband infrastructure deployment across Washington. In January, Inslee met with leaders from communities across the state, including Colville Business Council member Susie Allen representing the Colville Tribes, to discuss the need for state funding:

“I have been working on broadband initiatives on our reservation for many years, but unfortunately, substantially, we still remain under-served and unserved, without broadband services,” said Allen. “The Colville Tribes have invested several millions of dollars to begin to meet this need, but we require assistance from the state and federal agencies to complete this work… The lack of broadband service creates not just an inconvenience, but poses real safety concerns throughout the reservation.”

The Colville Tribe has invested $6 million in order to connect the tribal government and under the terms of SB 5511, they would qualify to receive more funding in grants and low-interest loans.

Earlier this month, we learned about a Senate bill in the Arkansas State Legislature that, in it’s original form, would have rescinded state restrictions preventing many municipalities from improving local connectivity. After amendments, SB 150 lost most of its effectiveness, but the bill that became law this week is still a small step in the right direction for a state where the rate of broadband connectivity is some of the lowest in the country.

Beginning Promise

For years, Arkansas has been one of the states that doesn’t allow government entities from providing broadband services to the public. The ban specifically disallowed “directly or indirectly, basic local exchange, voice, data, broadband, video, or wireless telecommunication service.” There has always been an exception to the ban for communities that have their own electric or cable utilities and want to offer telecommunications services. No municipality may offer basic exchange service, interpreted as telephone service.

Only a few communities have taken advantage of the legal exception, such as Paragould, Clarksville, and Conway. In recent years, electric cooperatives are deploying in rural areas, but many of the state’s rural residents rely on DSL, fixed wireless, and satellite. In the few more populous communities, there may also be scattered cable connections available. 

Even though large incumbent ISPs have collected federal grant funding in the past, deployment in Arkansas has been inadequate to connect all Arkansans. According to the FCC, connectivity to households is near the bottom of the list.

Big cable and telecom lobbyists managed to locate a legislative vehicle for the components of last December's bill to fund rural broadband, locking out some of the state's most promising opportunities to bring better connectivity to those who need it the most. There’s still time for Michiganders to express displeasure and the result and possibly influence change. You can file a public comment online through February 15th.

The Problems

When we reported on Michigan’s HB 5670 in December, it was set to appear before the House Communications and Technology Committee. Prior to the hearing, however, Chair Michele Hoitenga removed it from the agenda. Regular readers will remember Hoitenga, whose support from cable and telecom companies has inspired her to introduce anti-muni legislation in the past.

The bill, dubbed the “Broadband Investment Act,” established a fund to provide grants for infrastructure deployment, but specifically locked out municipalities and other government entities from eligibility. Consequentially, local ISPs that might want to provide services via publicly owned fiber were also stifled from projects because this provision essentially ended the possibility of public-private partnerships or any competition with large incumbents.

According to the language of HB 5670, “broadband” was defined as 10 Megabits per second (Mbps) download and 1 Mbps upload. While we have seen state broadband legislation from several years ago falling back upon this outdated definition of “broadband,” Michigan condemns rural residents to slow, unreliable, last-century technology. It indicates a thinly veiled attempt to hand over state funds to telecom companies with no interest in providing anything better than what they already offer in rural Michigan — DSL or satellite Internet access.

The federal government shutdown continues to drag on, but people heading up rural broadband projects are not waiting until it’s over to investigate federal funding sources. Tools like the ReConnect Opportunity Map from Cooperative Network Services (CNS) will help reduce some of the uncertainty and time required to prepare an application for this and other funding opportunities.

The GIS tool focuses on the ReConnect grant program’s criteria, which will allow users to quickly identify census blocks across the U.S. that are eligible for funding. CNS has also added special color-coding to display density of households and included information about those census blocks to help complete the applications. Examining density of households per road mile allows planners to more quickly prepare an application and establish a cost estimate. The map digs down even further to give information on housing units, which will help with refining deployment costs.

The tool also allows users to define deployment areas on the map and run reports that include census block identifiers, households, and populations per mile. Even if the specific identified area doesn’t qualify for ReConnect funding, the information can be used for other purposes, such as for a potential project that might qualify for other funding or might be of interest to an Internet access provider looking to expand in the area.

Check out this sample screenshot and the explanation below:

View a larger version of the screenshot.

This image of an area in Minnesota indicates census blocks that do not currently have broadband speeds over 10 Megabits per second (Mbps) download and 1 Mbps upload. The blocks are color-coded based on the number of housing structures per road mile (darker = more housing units per road mile). Small dark spots are structures. The number of households per road mile shading allows users to quickly identify areas that may make the most sense to target since road miles generally equate to fiber construction corridor miles.

More Than ReConnect