EAGLE-Net draws the ire of Moffat County Commissioners
May 30, 2013
Craig — Moffat County Commissioners sent a letter to Colorado lawmakers on Tuesday, expressing concern about a high-speed broadband service that was slated to run through the city of Craig and Moffat County.
The promised service has not yet been provided and the commissioners are concerned. Moffat County was supposed to have the broadband service last July.
It all started last April, when EAGLE-Net Alliance announced the official kick-off of a massive undertaking designed to bring affordable high-speed broadband Internet service to rural and low-income communities throughout Colorado — including Moffat County — focusing on schools.
The 4,600-mile network was financed by a $100.6 million Broadband Technology Opportunities Program infrastructure grant — the fifth largest of its kind in the country — and more than $30 million in matching funds and services from public and private entities around the state.
The original project plan aimed to connect 230 institutions representing more than 685,000 students at speeds from 10Mbps to 1Gbps.
One year later, less than half of the network is complete, the grant money is nearly depleted.
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Some believe that the decision is financially motivated as EAGLE-Net tries to recover from a costly and controversial suspension of its grant by the National Telecommunications and Information Agency (NTIA).
The suspension began in early December after accusations that EAGLE-Net was guilty of wasteful spending and network installation in areas already served.
EAGLE-Net also failed to gain the required environmental approval and other permits for a change in its build-out plan. A February 2013 report indicated that by the end of 2012, EAGLE-Net had expended more than $67 million in grant money; there were 36 of the planned 178 school districts in the network at the time.
"Until we have a full accounting of how the taxpayers money was spent and how it will be managed moving forward, it is irresponsible to let this project continue with business as usual," Rep. Cory Gardner, R-Yuma said in a press release as NTIA considered lifting the suspension and freeing EAGLE-Net's grant money to continue the project.
Despite opposition, the suspension was lifted April 30, and EAGLE-Net announced 29 school districts that would be an immediate priority, including Moffat County School District, which should have received EAGLE-Net in July 2012.
According to EAGLE-Net CEO Mike Ryan, $25 million of grant money had not been paid out prior to the December 2012 suspension, leaving very little in the coffers to continue expanding the network. Not long after, EAGLE-Net announced its plan search for a network operator.
NTIA estimates it will need to raise $10 million to $15 million in private financing and the selected third party network operator will pay $8 million in upfront capital in order to successfully move forward. It's unclear whether or not the third party payment is included in the total financing projection.
The plan is facing strong pushback from state and local government concerned about how the plan to get a network operator will impact rural communities.
"It's probably not going to be a good thing for the rural parts of the state," said Bayfield Mayor Rick Smith, who served for a year and a half on the EAGLE-Net board of directors. "Private companies are here to make money. They're not here to be gifting."
Moffat County commissioners Chuck Grobe, John Kincaid and Tom Mathers were not shy expressing their displeasure in a letter to Colorado Gov. John Hickenlooper and U.S. senators Michael Bennet and Mark Udall.
The letter demanded accounting for the missing $25 million dollars, the immediate halt of any transfer of operational control without the approval of the rural Colorado communities impacted by the EAGLE-Net project and the creation of an oversight board to supervise and control all EAGLE-net actions.
It also called for the end of fund usage in areas that already have service, such as the Interstate 25 corridor and San Luis Valley, and a requirement that any ENA money be destined specifically and verifiably for unserved and underserved rural communities.
"In order to ensure Colorado has future opportunity and continued access to federal funds for infrastructure projects, ENA must meet its programmatic objectives," they said. "Creating a federally funded private market competitor is contrary to program objectives."
EAGLE-Net expects to choose a third-party network operator by late July.
Andie Tessler can be reached at 970-875-1793 or email@example.com.