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June 2012
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State broadband project inches forward

By ADAM BEAM Associated Press

FRANKFORT -- Kentucky officials have agreed to lease 315 miles of fiber-optic cables from five rural telephone companies as they continue to seek ways to lower the cost of a massive statewide broadband project.

Kentucky is trying to build a statewide broadband network powered by more than 3,000 miles of fiber-optic cables. But the project has been plagued by delays and financing troubles.

The Kentucky Communications Network Authority, which oversees the project, had not met in more than six months. But Thursday, authority chairman Scott Brinkman pledged to hold quarterly meetings going forward. And the authority signed an agreement with Bluegrass Network, which includes five telephone companies, to use 315 miles of its network. Officials say that will save the state money because that's 315 miles of cable it won't have to install.

"This is a situation where everybody is going to benefit," said Phillip Brown, the authority's executive director.

Still unresolved is how the state will continue to pay for its portion of the project. A group of private companies borrowed $270 million for it. The state promised to pay those companies $28 million a year for internet service, including $13 million from the state's public school districts that the companies would use to pay off the loan. But state officials discovered they could not use the money from public school districts, leaving them $13 million short. State lawmakers agreed to give the authority $30 million to cover that shortfall. That money will run out next year. If the network is still not up and running by then, taxpayers could be called upon to help pay the debt again.

"The best way for us to deal with any funding challenges is to get the construction underway as quickly as possible so that revenue starts flowing to the network," Brown said.

Although some construction has started, Brown said it would be impossible to predict when the network would be completed.

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