Bracing For Bumps On Kentucky's Broadband Highway
A conference focusing on broadband expansion wraps up Thursday in Lexington. The event is just the latest in a series of overtures local officials are making on the issue as the state embarks on a new massive fiber-optic network. But while the gears are in motion, the future of broadband in the Commonwealth is far from set.
Partners Plug In
Although it’s rare these days to hear that squealing dial-up modem sound, when it comes to internet connection speed studies show Kentucky still limping along near the back of the pack with Alaska, Montana, and Arkansas.
Enter KentuckyWired, or the I-Way as planners are fond of calling it.
The goal is to lay a more-than-3,000 mile high-speed broadband fiber backbone across the Commonwealth – owned by the state but designed, built, and maintained by Australia-based Macquarie Capital.
"What Kentucky has done unusual and broken the mold a bit is to bring in the private money, the private partnership if you will, so that tax dollars, while they are part of the formula, are not the only part of the financing formula, " says Hilda Legg with Broadband Communities magazine.
On the Hook?
Of the total cost, expected to top $300 million, $30 million will arrive in the form of state bonds and another $15 to 20 million in federal grants. A relatively small chunk of the overall price tag, but David Williams with the national nonprofit Taxpayers Protection Alliance isn’t sold.
"Can the state afford to do this, especially in Kentucky, when you have teachers' pensions that are in the billions of dollars?" he asks. "This is really not a wise expenditure of funds."
Plus, he warns, it could leave consumers with a false impression.
"People think that they're getting something for free. Well, first of all, it costs as a taxpayer to pay for it, but once these systems are put in they have to pay for access," he cautions. "So you're not getting the broadband for free. You're not getting the cable TV for free. You still have to pay a monthly fee for this as you would with the private sector companies."
Failure to keep federally-funded or municipal broadband networks financially afloat has led some communities to dump their systems, recouping little of the startup costs in the process. Williams points to iProvo, a fiber network launched in 2004 in Provo, Utah as public-private partnership at a cost of $39 million. By 2013, with debts mounting, the city handed its network off to Google for a not-so-tidy sum.
"They sold their system for a dollar," Williams says.
But the success of such projects depends on many factors, and others view Kentucky's landscape as ripe for public involvement.
The Next Necessary Utility
When Christopher Mitchell, director of Community Broadband Network at the Institute for Local Self-Reliance, looks at Kentucky’s geography and population distribution, he sees a situation that could necessitate more than private companies are keen to provide.
"Places like Kentucky that have... the mountains that get in the way of building low cost, high quality internet that works, those sorts of places often need a little bit more public investment, much like they did to build electricity," he argues.
And, he predicts, just as other utilities have gone from luxury to necessity, so to will broadband internet. The challenge, as Mitchell sees it, is what comes next – after the fiber spine is in the ground.
"This is a project that's going to do wonderful things for large anchoring institutions, schools, libraries, and things like that," he says. "The question is how do ordinary people and how do local businesses get connected. And that is a bit of an unknown I would say at this point."
Building those off ramps from the I-Way will take locally-tailored solutions and more investment from communities, he says. Whether cash-strapped eastern Kentucky towns, some still grappling with double-digit unemployment, can manage is an open question.
Hilda Legg acknowledges the answers are more than just a few clicks away.
"If this were easy, someone would have come in and built a fabulous network all across Kentucky and every family in Kentucky would have unlimited access, but it's not easy," she says.
For now, it’s up to policymakers, businesses, nonprofits, and individuals to stay plugged in to the discussion.