Kentucky, Macquarie to Partner on State-Owned Fiber Backbone Network
Kentucky will partner with the Macquarie Group investment firm to deploy a 3,000-mile fiber “middle mile” network in the state, Democratic Gov. Steve Beshear and Rep. Hal Rogers, R-Ky., said Tuesday. The Next Generation Kentucky Information Highway (I-Way) project is meant to fix the state’s long-standing lack of broadband access, which “has damaged our ability to attract business and to explore modern opportunities in healthcare and education,” Beshear said during a news conference. Kentucky ranks 46th nationally in high-speed broadband availability, with 23 percent of its rural areas lacking broadband connectivity, Beshear’s office said.
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Kentucky’s announcement followed recent developments for other regional broadband projects, including Google Fiber’s announcement last week that it would delay a decision for which metropolitan areas it will choose to pursue gigabit broadband deployments until after the turn of the year. Google Fiber had planned to provide an update on its decision-making process before the end of the year but now plans to “be back in touch sometime early next year,” the company said in a statement. Google Fiber is considering whether to deploy in 33 cities across nine metro areas -- Atlanta; San Jose, California; Charlotte and Raleigh-Durham, North Carolina; Portland, Oregon; Phoenix; Salt Lake City; and San Antonio.
Google Fiber’s announcement “shouldn’t be that surprising in retrospect,” said Next Century Cities Policy Director Christopher Mitchell. “They bit off an incredible piece of work to evaluate these nine metropolitan areas” since Google Fiber only announced it was considering the areas in February. “That’s not a lot of time to evaluate everything,” said Mitchell, who's also Coalition for Local Internet Choice senior adviser. “I think it’s probably just taking longer for them to go through and see if they can commit to this level of a buildout.” It’s unclear how important the delay actually is, but if it’s only a short delay past the beginning of January “that’s not as big of a deal,” Mitchell said. Google “still holds all the cards,” which likely means a delay doesn’t change much about the process, Mitchell said. “You’re not going to see any of these cities say they don’t want Google to build its network there.”
Kentucky’s I-Way project will focus initially on eastern Kentucky, which has been viewed as the region with the biggest need for improved broadband access, but all 120 counties in the state will eventually have access to the network, Beshear said. The Center for Rural Development will collaborate with Kentucky to educate consumers in areas east of Interstate 75 on broadband connectivity. The I-Way project “could be pretty significant” for Kentucky given its historical lack of adequate broadband connectivity, Mitchell said. “It strikes me that if there are places in this country that are lacking access to fiber, Appalachia is number one on the list.”
Work on plans for I-Way have been underway all year, with the focus on eastern Kentucky emerging as a way to fulfill a recommendation from the Shaping Our Appalachian Region (SOAR) initiative, Beshear’s office said. The project 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,” Rogers said in a statement.
Macquarie said it plans to begin designing the I-Way system and determining is scope immediately. Design and cost estimates will be due at the end of February and construction will begin during the summer, Beshear’s office said. The project's first segments should be completed by April 2016, Beshear’s office said. The cost will be $250 million-$350 million. About $30 million in funding will come from state bonds, while $15 million-$20 million will come from federal grants. The rest of the funding will come from private funding, though Kentucky will retain ownership of the network, Beshear’s office said.