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Bevin vows to finish statewide broadband network

Posted September 16

— Kentucky's Republican governor said he is "absolutely committed" to completing a statewide broadband network despite questions about how the state will pay for its share of the $270 million project.

A group of private companies has borrowed more than $270 million to build the network. Kentucky officials promised to pay the companies about $28 million a year for internet service, including $13 million from the state's public school districts, which the companies would use to pay off the loan. But state officials soon found they could not use the money from public school districts, creating a $13 million gap.

On Friday, Bevin stood with U.S. Rep. Hal Rogers in the rotunda of the state Capitol to promise the project would be completed. He said the funding gap had been resolved, but offered few details.

The project, dubbed KentuckyWired, was launched under the administration of former Democratic Gov. Steve Beshear. It was pitched as a 3,000 mile network of fiber optic cables that would touch every county in the state, with an emphasis on attracting technology jobs to the beleaguered eastern Kentucky coalfields.

But the project quickly ran into problems. A contract to provide internet access to the state's public school districts was withdrawn after a protest filed by current contract holder AT&T. And several private communications companies worried the project would steal a large chunk of their business. In January, Bevin said he had concerns about the project's financing.

Since then, the Kentucky Communications Network Authority has scaled back the size of the project by signing agreements to use the existing fiber networks of two private companies: Cincinnati Bell Telephone System in northern Kentucky and the Eastern Kentucky Network, a group of five rural communications companies covering 21 counties.

Those agreements shaved more than $10 million from construction costs. And Finance Cabinet Secretary William Landrum said the authority plans to make up the rest of the money by selling some of the network's excess capacity to private companies.

"I feel very confident about it," Landrum said. "I've got partnerships now that when I first came in the administration they wouldn't even be in the same room. Now we're all arm in arm."

But construction of the network has been delayed by up to a year, and it is unclear how the state will make up the money in the meantime. In addition to the annual payments, the state legislature has already spent $30 million on the project, of which $13.5 million has been spent on purchasing about 2,000 miles of fiber optic cable and other equipment.

Bevin said he does not plan to ask the legislature to use taxpayer money as a stopgap.

"I don't want you all to get bogged down in the details. Truth be told, we don't have all the exact details because the wire hasn't been laid," he said, adding: "Understand this project will be done and has the absolute commitment of this administration."

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