Federal officials made their move after concerns were raised about whether the EAGLE-Net Alliance had adequately consulted with the State Historic Preservation Office as well as American Indian tribes.
It also may have built infrastructure in areas not considered in an environmental assessment it submitted to the government.
The National Oceanic and Atmospheric Administration suspended the grant to EAGLE-Net Alliance this week, halting its construction activities.
The federal agency told EAGLE-Net in a letter Thursday that it was taking action because the group failed to consult with the National Telecommunications and Information Administration. The suspension requires EAGLE-Net to “cease all project deployment immediately,” the letter reads.
EAGLE-Net was established to offer better connectivity and faster Internet speeds for school districts, libraries, government agencies, emergency services and health care facilities. The group received $100 million in federal funding and another $30 million that it raised from public and private sources.
The suspension of EAGLE-Net’s construction activities is expected to be temporary, and the alliance will continue to provide service to customers where Internet already has been set up, EAGLE-Net spokesman Cody Wertz said.
“We are working closely with NTIA to provide the requested information so that we can resume construction as soon as possible,” he said. “Current customers and community-anchor institutions will not be impacted by this.”
EAGLE-Net must submit a detailed description of its plan to return to compliance when officials from the NTIA visit next week.
The grant suspension comes after NOAA placed EAGLE-Net’s award under a “corrective action plan” in August to address concerns about the program and “financial issues,” according to the letter.
EAGLE-Net, whose board of directors includes government officials statewide, is supposed to deliver an enhanced broadband network to more than 230 places in more than 170 communities, including in Northern Colorado.
The alliance leased over 1,600 miles of “dark fiber” and was in the process of installing nearly 1,100 miles of new fiber-optic cable across Colorado, CEO Randy Zila said last month.
Colorado’s congressional Republican delegation criticized EAGLE-Net earlier this year for what the lawmakers said was the construction of unnecessary networks at the expense of long-standing rural telecom providers.
“Taxpayers should not be forced to subsidize a program that is putting Colorado’s rural telecom industry out of business,” Rep. Cory Gardner said in September.
EAGLE-Net defended its efforts, saying it had worked closely with local businesses and governments to keep Colorado competitive with other states in terms of its Internet access.
Thursday’s suspension was unrelated to Republican accusations of unnecessary construction, according to NTIA.
Gardner said he would continue to look into questions raised about EAGLE-Net’s efforts in Northern Colorado.
“I don’t believe this grant ought to be re-instituted when we know they are already providing services to areas that are by no means un-served or under-served,” Gardner said. “This is a $100 million stimulus loan that is threatening private businesses.”