An ambitious project to build a high-speed internet network across Kentucky has suffered delays, significant cost overruns and even setbacks from squirrels eating the cable, so officials were glad to finally announce a progress milestone Friday.
The first section of the project to install more than 3,000 miles of fiber-optic cable around the state is done, U.S. Rep. Hal Rogers and Gov. Matt Bevin said at a news conference in Lexington.
That section, or ring, covers the so-called Golden Triangle bounded by Lexington, Louisville and Cincinnati, with a line south to Somerset.
It was necessary to finish that ring first because of major internet access points in Louisville and Cincinnati, officials said.
The next ring will loop from Somerset to Prestonsburg, then up to Ashland and back to Lexington.
Officials said four of the six rings that will make up the system should be done by the end of the year, with the other two finished by mid-2020. Parts of Western Kentucky will get service last.
Bevin said the cable is in place for 1,600 miles of the system.
Supporters said broadband is as essential in the 21st Century as electricity was decades ago, but the internet speeds available in some parts of the state lag far behind the national average.
Statewide, Kentucky reportedly ranked 48th in broadband access in 2017, according to a news release from the governor’s office.
KentuckyWired will provide direct internet service to more than 1,000 state-government offices, but won’t provide direct service to businesses and homes.
Rather, it will create an access point in each of the state’s 120 counties that internet providers can tap into.
Supporters said that will make it more economical for other providers to extend service to homes and businesses, including in less-populated areas where providers have not yet installed high-speed service.
KentuckyWired will bring benefits in job creation, education, medicine and other areas, Rogers said, noting that families in some places now have to go to McDonald’s after school so students can use wifi to do homework.
“We’re closing the digital divide,” Rogers said.
Rogers pointed to the success of Teleworks USA as an example of the potential for good internet service to create jobs.
Rogers said about 2,200 people have gotten jobs through the program, which is run through the Eastern Kentucky Concentrated Employment Program. The program allows people to work from home in areas of Eastern Kentucky that have good internet service, or from one of eight hubs.
The state needs better access to high-speed internet to keep pace in a world where the digital economy is increasingly important, supporters said.
“Today is a dream come true,” said Jim Host, a Lexington businessman who is on the board of Shaping Our Appalachian Region, or SOAR, which has pushed for faster internet service in Eastern Kentucky. “Broadband is the gateway to the world.”
Rogers, a Republican who represents Southern and Eastern Kentucky, and then-Gov. Steve Beshear, a Democrat, announced the KentuckyWired initiative in 2013 as a public-private partnership, with a contractor building and operating the network but the state backing the debt.
The initial projection was to have the network ready for customers by mid-2016, but that proved to be woefully unrealistic.
One problem was that the state had trouble getting permission to install the cable on existing utility poles owned by providers such as Windstream and AT&T.
The delays caused tens of millions in costs to the state even as the system remained unavailable for use, prompting calls from some legislators to cancel it.
A review by state Auditor Mike Harmon’s office released last September put the cost overruns at nearly $100 million.
The audit said the contract negotiated in the waning months of Beshear’s term was badly structured, putting the state on the hook for significant additional costs.
The audit said the system will cost the state $1.5 billion over 30 years, though the state would have paid much of that amount for internet service even without KentuckyWired.
Ultimately, the legislature approved letting the Kentucky Communications Network Authority, which is overseeing the project, borrow an extra $110 million to pay costs to contractors caused by delays.
A legislative committee didn’t vote for the bond issue earlier this month after officials reported more delays because squirrels had chewed through some wiring.
However, the authority on whether to proceed with the borrowing rested with state Finance Secretary William M. Landrum III. He notified the committee earlier this week the state would go forward with the borrowing.
Bevin spoke to the bumps the project has had at the news conference, saying progress doesn’t come without costs.
However, he disputed the idea that the broadband system is a financial boondoggle, saying that argument doesn’t take into account the revenue potential.
The system ultimately will be a money-maker for the state and others, Bevin said.
The state will save money on internet service with the system, and can lease excess capacity to make money, according to KentuckyWired.
But Bevin also said the purpose behind the project wasn’t profit for the state, but access to an essential service for residents.
“The reason I have become a champion for this is it has to happen,” Bevin said.