Public-private partnership will broaden Internet connectivity to every corner of KY


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A new public-private partnership will develop a fiber “backbone” infrastructure to bring high-speed Internet connectivity to every corner of the state – with the first components scheduled to be operational in less than two years.

Gov. Steve Beshear and U.S. Rep. Hal Rogers announced the partnership with Macquarie Capital.

“Kentucky’s Internet speed and accessibility have lagged behind the rest of the nation far too long. This partnership puts us on the path to propel the Commonwealth forward in education, economic development, health care, public safety and much more,” Beshear said.

Currently, Kentucky ranks 46th in broadband availability and 23 percent of rural areas in Kentucky do not have access to broadband. Most households in the state have access to an Internet Service Provider (ISP), but not necessarily high-speed broadband. High-speed broadband is capable of carrying much larger amounts of information to a larger group of users at much faster speeds.

Broadband will improve Kentucky’s “dismal connectivity and slow speeds” to some of the fastest and highest capacity service in the U.S. – all with the potential to lower consumer costs and improve coverage as well, according to a press release from the governor’s office. It will be paid for up front by leveraging private capital at no additional cost to Kentucky taxpayers.

“If we were to rely solely on state government funding to get this project off the ground, it would take years, if not decades. Those kinds of tax dollars just aren’t available,” said Gov. Beshear. “In this technology-dependent economy, we can’t afford to wait another minute. That’s why this partnership is so valuable – it ramps up this project to the speed of the private sector without any additional burden on our taxpayers.”

State to oversee main broadband lines

The first stage of the project is to build the main broadband fiber lines across the state. These major fiber lines are called the “middle mile.” The “open access” network will allow the private sector to use the fiber to deliver services into communities. Once complete, other Internet service provider companies, cities, partnerships, or other groups may then tap into those “middle mile” lines to complete the “last mile” – the lines that run to individual homes or businesses.

Where already in place, the project will take advantage of existing infrastructure, thus partnering with local telecommunications companies, municipalities and major carriers to deliver the network more quickly and reduce construction costs.

Improved cell phone coverage is anticipated as part of the initiative. Cell phone companies may choose to use the state’s “middle-mile” fiber network to add capacity and broaden coverage areas throughout the Commonwealth that have traditionally had poor cell phone reception.

Eastern Kentucky to be first priority

When completed, the more than 3,000 miles of fiber will be in place across the state. This “middle-mile” fiber infrastructure is key to reaching much of Kentucky’s large rural population.

Fiber will be available in all 120 counties, and the underserved Eastern Kentucky region will be the first priority area for the project. The Center for Rural Development in Somerset will partner with the Commonwealth, focusing on communities east of Interstate 75. The Center will also host education workshops to help communities learn how to connect to the new network.

The push for reliable, accessible high-speed broadband is one recommendation that emerged from SOAR, the “Shaping Our Appalachian Region” initiative.

“We’re laying the first bricks for what could be ‘Silicon Holler.’ This new Super I-Way is the cornerstone of SOAR’s mission to diversify the economy in eastern Kentucky with improvements in business recruitment, fast-tracking telemedicine in the mountains, and adding high tech advancements in education,” said Rogers.

Over the past several months, the state, in conjunction with the Center for Rural Development, released the request for proposal solicitation and negotiated with private sector vendors including Macquarie Capital.

Macquarie Capital has assembled a team of specialists to design, develop and operate the network over the next 30 years. While the private sector partners will bear developmental and operational risks of the project, the state will retain ownership of the network.

Macquarie will begin work immediately on phase one to design the overall statewide system and determine the project’s scale. The design and cost estimates are due by the end of February 2015, with construction of the first segments expected to begin in the summer and completed by April 2016.

The total cost of the project will depend upon the ability to leverage existing infrastructure versus deploying new routes, which will be determined during the design phase. Overall, the project is estimated to cost between $250 million to $350 million, and will be supported by approximately $30 million in state bonds and $15 to $20 million in federal grants.

‘Open access’

One of the most important features, according to the press release, is that the network will be “open access,” meaning many other Internet and cell phone service providers can lease portions of the network. More important, those leases will not be limited to one provider per county or community; several groups may lease the network, which will give consumers a choice in purchasing their broadband. By partnering with the network, providers will be able to reduce their costs when building out “last mile” service to customers.

To find out more about Macquarie Capital, click here.

From Office of the Governor


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