A last mile broadband project in Taos, New Mexico, encountered a temporary snag and appears to be back on track. The situation highlights the potential conflict created between federal and state entities. State officials acted to show their support and now expect the project to continue.

Kit Carson Electric Cooperative (KCEC) was awarded a $45 million grant and an accompanying $19 million loan from the American Recovery and Reinvestment (ARRA) stimulus funding. The project is expected to span about 3,000 square miles of New Mexico and will include smart grid technology in addition to high speed broadband to rural communities. From a story on the USDA website:

The Kit Carson Electric Cooperative (KCEC) “fiber-tohome” project will allow greater bandwidth, providing the quality necessary for applications such as telemedicine, teleconferencing and video sharing for education, business and entertainment. Once completed, the co-op’s project will make broadband service available to 29 communities, reaching about 20,500 households, 3,600 businesses and 183 community institutions, including hospitals, schools and other government facilities. Two Native American pueblos will also receive broadband service once the project is complete.

In September, 2011, the New Mexico Public Regulation Commission (PRC) included as part of a rate order that KCEC spin off its broadband business into an independent company.  J.R. Logan covered the story in the Taos News:

The PRC's original order stated that Kit Carson must create a separate Internet subsidiary to protect electric ratepayers from potential losses, or explain why such a separation was not feasible.

According to the article, KCEC received communication from the RUS looking for clarification on whether or not the order was entered and would be followed. The RUS wanted a definitive answer because divestiture would violate the terms of the agreement between KCEC and the RUS. The entire project was in jeopardy.

Not long ago, we told you about Farmington, New Mexico, a community of 32,000 residents who want to capitalize on its current fiber network. Residents are tired of waiting for private investment in their community and want to take matters into their own hands. The city's electric utility uses the existing fiber network and the city has encountered five separate companies interested in leasing dark fiber as a means to offer services.

New Mexico does not currently have state barriers in place, but its residents recognize the important role of municipal networks and want to proactively block restrictive state legislation. The Media Literacy Project and the Free Press recently met with New Mexico's U.S. Senator Tom Udall's staff in Albuquerque. Udall is a member of the Senate Committee on Commerce, Science, and Transportation and a member of the Subcommmittee on Communications, Technology, and the Internet.

The goal of the meeting was to make sure he knows the potential for publicly owned networks in the state. Both groups encouraged him to take the lead on federal legislation that will prevent anti-competitive state bans on municipal networks. At least 19 other states' legislatures have responded to heavy lobbying from large telecommunications companies. The results are crippling restrictions and outright bans on publicly owned networks.

In July, Udall officially announced that the first phase of the Connect America Fund would bring high-speed Internet to 8,000 New Mexicans within three years. According to Udall's announcement:

Broadband and telecommunications companies CenturyLink and Windstream will receive $2.3 million to build broadband infrastructure for New Mexico homes and businesses that currently lack high-speed internet access, connecting them to the $8 trillion global internet economy.

Farmington, New Mexico, currently has 80 miles of fiber and has decided to consider the best way to get the most out of the investment. The City uses the fiber network strictly for its Farmington Electric Utility System but sees potential in maximizing the power of the unused strands. Earlier this year, they commissioned a study from Elert & Associates to investigate the technical possibilities. Front Range Consulting reviewed the financial pros and cons.

In February, both experts provided options to the City Council. While offering triple play services is a possibility, both firms recommended leasing available fiber to existing ISPs instead. Expanding to a triple play offering would require  a $100 million investment to connect the 32,000 current Farmington Electric Utility System's customers.

Dick Treich, from Front Range Consulting, commented on the pushback to expect from Comcast and CenturyLink, if the City decided to pursue triple play retail services. From a February Farmington Daily Times article (this article is archived and available for purchase):

"They won't sit still for that," Treich said. "First they will challenge the legality of whether you can get into that option, possibly tying you down in court for a long time. They will also start the whole argument of public money being used for starting a private business. It would be a two-pronged attack."

The City Council also pondered the option of leasing fiber, which would require a $1.5 million infrastructure investment. Also from the article:

"Five companies have expressed interest," said Assistant City Manager Bob Campbell. "Assuming that those companies would each use approximately 10 miles of fiber, (they) would provide $170,000 annually leasing dark fiber."

Update:

Bob Campbell, Acting Director of the General Services Department of Farmington, emailed us this update: