Politics & Government

Bevin aims to scale back broadband project to focus on Eastern Kentucky

Gov. Matt Bevin delivered his budget Tuesday before a joint legislative session in the House chambers at the Kentucky state Capitol.
Gov. Matt Bevin delivered his budget Tuesday before a joint legislative session in the House chambers at the Kentucky state Capitol. Associated Press

Gov. Matt Bevin said Friday that he wants to scale back an ambitious plan to build a high-speed broadband network around the state to instead focus on Eastern Kentucky.

Bevin said the original idea behind what ultimately became the KentuckyWired project was to provide broadband to Eastern Kentucky, where counties that long relied on the coal industry have been slammed by a sharp drop in coal jobs.

Many leaders in the region see high-speed Internet service as a crucial need in creating opportunities for new jobs in technology, health care and other fields.

However, that idea “morphed” into a plan to install 3,400 miles of fiber-optic cable around the state, which made it “somewhat untenable,” Bevin said after a meeting of the board of the Shaping Our Appalachian Region initiative.

“There weren’t enough dollars nor was there an ability to do that as effectively as anyone would have liked,” Bevin said of the statewide project. “My intent is to see it come back more to its original intent, and let’s start there.”

Bevin said it is his “absolute intention” to make sure broadband comes to Eastern Kentucky.

We would love to be the model for the nation, but let’s walk before we run.

Gov. Matt Bevin

U.S. Rep. Hall Rogers, a Republican who represents southern and Eastern Kentucky, was considering a broadband project for his district before he and then-Gov. Steve Beshear, a Democrat, teamed up to start SOAR in late 2013 as a way to come up with ideas and plans for boosting Eastern Kentucky’s economy.

Rogers has said he discussed the idea of broadband for Eastern Kentucky with Beshear, and Beshear wanted to take the project statewide.

The project became a priority for Beshear’s administration, which structured a deal with a private company called Macquarie to provide much of the financing for the $324 million project.

About $280 million in bonds were sold to finance the project. The state also put in $30 million, and Rogers arranged for $23.5 million in federal funding.

The deal called for the company to get its return from selling Internet service to 1,100 state-government locations and other customers, including schools.

A top Bevin official said recently that there was a problem under the Beshear administration with the solicitation for the service, which jeopardized about $11 million in federal money the state gets for Internet service to schools.

The state withdrew the solicitation to provide that service shortly before Bevin took office.

With that money out of the mix, taxpayers could have to make up those payments to Macquarie at a time when the state budget is very tight, according to Bevin officials.

Administration officials are trying to figure out how to address the issue.

Bevin said there is a question on whether there is adequate funding for the statewide project envisioned last year. He emphasized that he was not saying his administration does not want high-speed broadband service statewide.

“We do,” Bevin said. “We would love to be the model for the nation, but let’s walk before we run.”

Instead of trying to do the entire state and perhaps not being able to accomplish the job effectively, it would be better to focus on a region where it will have immediate impact, “and if it is doable there, then we’ll replicate it in other places,” Bevin said.

Bevin said the state will re-negotiate with Macquarie if needed. He also pledged to work with local telecommunications companies on the project.

Rogers said his original idea was to improve broadband in Eastern Kentucky, where the need is greatest, and that he appreciated Bevin’s commitment to that. As for what happens in the rest of the state, Rogers said he would leave that for others to decide.

The SOAR board meeting in Pineville on Friday was Bevin’s first as co-chair with Rogers.

Bevin said he is strongly committed to the initiative, recalling how he grew up in a rural, mountainous area where declines in the paper and timber industries caused economic problems. His father lost jobs on several occasions because of the downturns, Bevin said.

He noted he had included funding for the initiative in the state budget.

Rogers noted that because coal production in the region has dropped back to levels not seen since the early 1930s during the Great Depression and it unlikely to bounce back, the work SOAR is doing is crucial to the region’s future.

The SOAR board heard about a plan Friday to train 75 people beginning later this year as a step toward creating a technology workforce in Eastern Kentucky.

The board also voted to develop a SOAR social network called “Our Appalachia” to help spread ideas and aid regional cooperation.

“We hope to harness the sheer talent and brain power in Eastern Kentucky, by creating an online community that will help people collaborate from all sectors of our economy,” said Jared Arnett, executive director of the initiatives.

The board also voted to back Appalachian Health Hack-a-thon in partnership with the Massachusetts Institute of Technoogy.

The event would be an intensive brainstorming exercise to come up with ideas for business development geared toward improving health conditions in the region, which has high rates of problems such as diabetes and heart disease.

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