Lee and Wise counties lose broadband stimulus funds
- April 29, 2011
Efforts to expand broadband access to rural customers in Lee and Wise counties have come to a halt — at least temporarily.
LENOWISCO LLC, a subsidiary of the LENOWISCO Planning District Commission, is the trustee of a rural area network, which has been operated by Duffield-based Sunset Digital Communications since 2003. (LENOWISCO stands for Lee County, Norton, Wise County and Scott County.)
LENOWISCO negotiated with Sunset for more than 13 months trying to come up with new lease terms after the planning commission applied for federal stimulus funds to be used in expanding “last-mile” connectivity to 2,500 homes and businesses. A new lease, for example, was necessary to account for debt service, which was not accommodated by the original leases, LENOWISCO officials say.
Negotiations, however, fell apart earlier this year, and the federal government has rescinded $20.2 million in funding. LENOWISCO contends that Sunset is in default of its contract. In early April, the two parties agreed to a consent decree saying that company would continue operating the network with no degradation of service.
Paul Elswick, president of Sunset Digital, blasted LENOWISCO for involving the courts. “Their claim that Sunset might interrupt service to their customers is ludicrous,” he stated in a news release.
Each organization blames the other for the breakdown in the relationship. Glen “Skip” Skinner, executive director of LENOWISCO, says Sunset has not been transparent in its financial operations and its business practices have resulted in lost customers and revenues. “They made it difficult for us to fulfill our economic development mission, and that’s what really broke the camel’s back for us,” he says. “Our objective is economic development, but Sunset’s objective has been to set a price at whatever the market will bear as opposed to acknowledging that this is a publicly funded asset and pricing it as such.”
Elswick contends that LENOWISCO’s “hesitation in moving ahead with the project” has cost the area the 73 jobs needed to install the expanded broadband service. Instead of fulfilling its economic development mission, “[LENOWISCO’s] refusal to take the $20 million award will likely slow economic development,” he says.
The current contract between the two organizations will not expire until 2024, but where things will go from here is unclear. LENOWISCO recently sent a second contract default letter to Sunset but, as of early April, had not received a response to its request for information. LENOWISCO so far has not pursued any legal action to break the contract. A spokesperson for Sunset says the company intends to stay on as operator and looks forward to expanding the network.