Lawmakers allege EAGLE-Net waste

BROOMFIELD — A $100.6 million federal grant awarded to Broomfield-based EAGLE-Net Alliance as part of the economic stimulus has drawn fire from lawmakers who question whether it is wasting taxpayer dollars to compete against companies that already sell high-speed broadband in rural areas.

“They’re competing for the very same customers that these private telecom providers are,” Rep. Cory Gardner, R-Yuma, told the Business Report.

Republican lawmakers on the House Committee on Energy and Commerce, including Gardner, questioned officials about EAGLE-Net earlier this month during a hearing in Washington, D.C., on the wider $7.2 billion broadband stimulus program.

EAGLE-Net, which stands for Educational Access Gateway Learning Environment Network, is a quasi-government group that received its grant in the fall of 2010 as part of the Broadband Technology Opportunities Program, run by the National Telecommunications and Information Administration.

The program is aimed at expanding fiber-optic Internet service, the fastest connection, to more of the United States. Only about 20 percent of American households have access to fiber-optic service compared with 86 percent in Japan and two-thirds in South Korea.

The questions about EAGLE-Net focus not only on whether it is extending its fiber-optic network to the right places. According to government documents, EAGLE-Net already has used or committed $96 million of its federal grant while reaching only about 55 of the more than 220 K-12 school districts, libraries, community colleges and other educational institutions that are supposed to be wired into its 4,600-mile network.

Northern Colorado Internet service providers are among those with concerns. EAGLE-Net has completed fiber installation in the Fort Collins, Loveland and Estes Park school districts, with plans to lay more fiber in the Greeley, Evans, Eaton and Windsor districts.

CenturyLink, among the state’s largest telecom providers, has invested “hundreds of millions of dollars” doing the same across the state, said Jim Campbell, vice president of regulatory and legislative affairs.

“The network they’ve built runs along the I-25, I-70 corridor: So, they’ve basically used taxpayer dollars to build a network where there’s already three or four providers,” Campbell said. “From our perspective, (it’s) not the best use of taxpayer money.”

Federal agencies suspended EAGLE-Net’s construction activities in December following concerns that it was building in areas not covered in an environmental assessment it submitted to the government.

Most of the problems with EAGLE-Net have cropped up on Colorado’s eastern plains, said Bill Wray of the Colorado Telecommunications Association, which represents 25 rural carriers.

“This is a major issue for our members because many of our members are basically facing the overbuild by EAGLE-Net,” he said.

For example, EAGLE-Net has laid fiber optics in the area serviced by Nunn Telephone Co., which offers internet service in Carr and Nunn, located in northern Weld County. EAGLE-Net installed fiber-optic line along the interstate in Nunn Telephone’s territory, but the area has no schools or libraries.

Gardner, whose district includes Weld County, said he, too, has heard from several Internet service providers in Northern Colorado.

“They face significant pressure from EAGLE-Net,” he said.

EAGLE-Net, he said, also has failed to install fiber in “truly un-served or underserved” rural mountain towns such as Silverton in southwest Colorado. Instead, small towns like Flagler that already had Internet now have EAGLE-Net, as well.

EAGLE-Net spokeswoman Gretchen Dirks responded to these concerns by pointing out that it’s routing broadband Internet to a total of 223 Colorado facilities, but not homes or businesses.

The group also has reached out to Internet providers to explain its role and, it hopes, allay concerns.

In areas where EAGLE-Net has installed line where high-speed internet already exists, Dirks believes its fiber line still can offer benefits. For one, EAGLE-Net’s line provides network redundancy, meaning its fiber can serve as a backup in rural areas with poor connections.

The group is working to get the government to lift its suspension by the end of the month so it can resume construction of new fiber line.

Republican lawmakers aren’t the only ones who are concerned.

Democratic U.S. Sen. Michael Bennet wrote the heads of the National Telecommunications and Information Administration and Rural Utilities Service last year.

“These broadband infrastructure expansion programs are critical factors for the economic growth of our state,” Bennet said in his letter. “However, as these programs move into the final year, I continue to hear concerns from across the state that … EAGLE-Net could potentially miss important opportunities to provide better coverage and service to our rural communities.”

The main concerns were related to building infrastructure where it already exists, a problem also common in other states, he added.

Both Bennet and U.S. Sen. Mark Udall think EAGLE-Net should be able to continue its activities as access to broadband remains poor in rural Colorado. The state ranks 42nd in broadband connectivity, according to the National Telecommunications and Information Administration.

“EAGLE-Net’s success is tied to that goal, so (Udall) does believe that they need to be part of a systemic solution to this problem,” Udall spokesman Mike Saccone said. “That said, there are fair questions to be asked about some of the build-out choices that have been made.”

Gardner said he might request a federal audit of EAGLE-Net.

“There are still many unanswered questions about waste and whether EAGLE-Net will ever be sustainable,” he said.

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