UPDATE After nearly five years of fallouts, delays and financial conflict, Kentucky Wired recently reached a major milestone when it completed two segments of the statewide broadband project to provide high-speed internet to its first site, the Cabinet for Health and Family Services (CHFS).
The Kentucky Wired project was announced in 2013, entering into a contract with Australian-based venture capital firm, Macquarie Capital in 2014. The deal was part of a public-private partnership to install 3,000 miles of fiber to create a ‘middle mile’ that connects all 120 counties. Although the project was proposed for completion by the fall of 2016, it came to an unexpected halt when the Kentucky Senate voted to end the project due to delays that were estimated to cost taxpayers over $8 million dollars.
As reported by NPR News on WEKU-FM in 2017, lawmakers were troubled by delays caused by the state’s inability to negotiate legal agreements to attach Kentucky Wired’s fiber-optic line to utility-based sites owned by companies such as AT&T and Windstream.
A 2018 report from Republican Auditor Mike Harmon stated, “‘When the project was announced, state officials said publicly its private sector partners were borrowing the money and assuming most of the risk for the project to protect taxpayers. But state officials later changed the terms of the deal to take advantage of tax-exempt bonds.’ As a result, the financial responsibility shifted from the private sector to taxpayers. According to govtech.com, Kentucky owes more than $1 billion to Macquarie and state taxpayers are responsible for covering about half of that total.”
The project has moved on although state officials were denied a request for an additional $110 million dollars to keep the project on schedule. The reason given for the postponement was that squirrels damaged cable that was due to be activated in April.
“It seems Kentucky has an abundance of squirrels that like to chew through fiber,” Mike Hayden, chief operating officer of the state authority supervising Kentucky Wired, told lawmakers at Tuesday’s Capital Projects and Bond Oversight Committee meeting in Frankfort.
Despite delays, govetech.com stated that the project is designed to provide internet to state government buildings and serve as the “middle mile” for local internet companies who want to sell internet to customers. Those local internet companies would oversee building the “last mile” of the network. It would not deliver service to individual homes and businesses, which would be the job of other providers who could hook into the network.
Construction is slated for completion by October 2020, but revenue is not expected until 2025.
December 18, 2019
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