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BIT hits snag on $18.9M grant

SoVaNow.com / January 23, 2013
A project by Buggs Island Telephone to establish a regional broadband Internet network was suspended on Jan. 4 for not complying with the terms of a $18.9 million grant received from the National Telecommunication and Information Administration.

This is the most recent in a series of problems that has plagued BIT since it proposed a plan to deploy a broadband network in 15 underserved counties and cities in Southside, including Mecklenburg and surrounding counties.

The Bracey-based telephone cooperative was given a “Corrective Action Plan” by the National Telecommunication and Information Administration, which could bring its project back into compliance with the terms and conditions of the award.

Still, BIT faces losing the grant permanently if it does not submit a written response by March 4 that addresses all of National Telecommunication’s concerns.

In 2010, BIT’s project was one of 233 national projects approved for stimulus funds under the American Recovery and Reinvestment Act of 2009, which appropriated $4.7 billion for the National Telecommunication and Information Administration to establish the Broadband Technology Opportunities Program.

BIT received $18.9 million in stimulus funds and another $4 million from the Virginia Tobacco Commission.

Under the terms of the grant, BIT has until Dec. 31 to install a broadband network to serve 15 counties in Southside Virginia. BIT’s grant submission said the network would provide “wireless broadband at speeds of up to 10 Mbps to as many as 100,000 households, 14,800 businesses and 800 community anchor institutions, and promote broadband adoption by discounting the cost of the equipment necessary to subscribe at home.”

BIT also proposed to “offer discounted rates to all critical community facilities and anchor institutions, including 73 fire departments and rescue squad facilities, and 47 police departments and sheriff offices and provide enhanced telemedicine capabilities to healthcare professionals.”

BIT, based in the Bracey community on Lake Gaston, initially planned to roll out its new fixed wireless broadband network in September 2012. But that date was pushed back due to challenges with WiMAX firmware and software optimization. According to Tim Pfhol, the Grants Program Director for the Virginia Tobacco Commission, BIT had reported that it had “interference problems” from existing equipment installed by other telecommunication providers in the area.

By the end of December, BIT spent over $19 million out of the $23 million it received in federal stimulus funds and from the Virginia Tobacco Commission. Yet, according to the last report BIT filed with the Administration, it had no wholesale provider and only 97 actual customers (2 businesses, 92 residences, and 3 community institutions).

The number of actual customers is substantially less than the number of customers it reported to the Administration in December: “At the end of September 2012, there were 9,177 business customers, 293 CAI [community institutions] customers, and 62,159 residential customers served.” BIT said that the set of higher customer numbers factors in potential customers: Because its service is wireless, “the total number of entities passed [which could potentially access the service] is the same as the total number of subscribers served.”

It also attributed its lack of actual customers to its equipment vendor, Airspan, which needed “additional time for testing and optimization of the network. Therefore, BIT said it was not installing new customers until after “optimization [was] achieved,” which it anticipated to be in early 2013.

Airspan’s request for additional time to complete testing and optimization was also the reason BIT claimed that 11 of its 35 tower sites were still in need of broadband equipment. BIT said it would complete that installation by the end of March.

BIT is not the only recipient of Broadband Technology Opportunities Program monies to struggle. At the end of 2012, Administration officials temporarily halted Broadband Technology Opportunities Program funding on a middle-mile network build in Colorado. In 2011, Louisiana’s lost its $80.5 million in funding.

Still, in one of the last public statements issued by BIT, President Mickey Sims said he believes access to broadband connectivity is a key element for economic growth. By creating the network, BIT expected to create 64 direct new jobs, mainly in Mecklenburg and Brunswick counties.

Repeated calls to Buggs Island Telephone Company and its President Mickey Sims seeking comment were not returned.

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