Many Kentuckians would probably still be lighting kerosene lamps at dusk had they waited for private enterprise to bring them electricity.
The same is true of high-speed Internet. Without government involvement and public investment, Kentuckians will remain stranded by the side of the information highway, handicapped by the nation’s slowest Internet service, unable to compete in today’s economy.
That is why Gov. Matt Bevin’s administration, lawmakers and federal regulators must resist efforts by telecom giants like AT&T to undermine KentuckyWired.
The public-private partnership — the brainchild of Republican U.S. Rep. Hal Rogers and Democratic former Gov. Steve Beshear — will fill huge gaps that telecommunications companies never will.
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The economic implications are grave. Kentucky has the nation’s slowest connection speed during peak-useage times: 38.2 megabits per second.
That’s less than half of Delaware’s 86.6 Mbps, the nation’s highest, according to Akamai, a server company. Twenty-five states enjoyed double-digit growth in average peak-connection speed during the third quarter of 2015, while Kentucky’s increased by a paltry 7 percent.
In only five states does a larger percent of the population lack access to the Federal Communications Commission‘s benchmark broadband speeds. FCC research shows that speeds of 25 Mbps for downloads and 3 Mbps for uploads are necessary to accommodate the increasingly bandwidth-intensive demands of homes and businesses.
Forty percent of Kentuckians lack access to broadband service up to the FCC standard, compared with just 16 percent in the nation as a whole.
And it’s not just remote hollers and lonely rural stretches that are lagging: 17 percent of Kentucky’s urban population lacks access to service providing the FCC benchmark speeds, more than double the 8 percent nationally.
KentuckyWired will dramatically increase Internet speeds and capacity by building a 3,200-mile fiber optic network, bringing advanced broadband to all 120 counties, where commercial providers can deliver high-speed service to customers.
The $232 million financing agreement between Kentucky and Australian investment bank Macquarie was named “deal of the year” in 2015 by The Bond Buyer’s magazine, which bases its awards on innovation, ability to pull together complex transactions under challenging conditions, public purpose and ability to serve as a model for others.
Kentucky put up $30 million and the federal Appalachian Regional Commission $23.5 million.
That other states will follow suit is what worries AT&T. Already West Virginia is moving to create a state-run broadband network.
While telecom companies are not interested in building broadband infrastructure in lower-population and, therefore, lower-profit areas, they don’t want competition from public efforts, either.
Back in the 1930s, investor-owned utilities opposed the federal government’s rural electrification program for the same reason. So did anti-government ideologues.
AT&T now has the contract. Overlap between the state agency that wrote the bid specifications and KentuckyWired created the appearance of a conflict of interest that could disqualify Kentucky from $11 million in federal funding that pays most of the $12.5 million cost of Internet in the state’s 173 school districts.
The $12.5 million a year for serving the schools was supposed to go to the company that’s building and will operate the new broadband network and is critical to the deal. New state finance secretary William Landrum III is trying to sort out the situation.
Keeping KentuckyWired on track should be a top priority, even if Kentucky has to replace the $11 million federal subsidy with state dollars. The economic rewards from dramatic gains in high-speed broadband access would repay the investment many times over.