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BIT lays out corrective plan to reignite federal support

SoVaNow.com / February 20, 2013
Buggs Island Telephone (BIT) is seeking to get its project to bring high speed wireless internet to 15 counties in Southside Virginia back on track after filing a corrective action plan with the National Telecommunications & Information Administration (NTIA), the federal agency charged with oversight of the Broadband Technology Opportunities Program.

Network installation and payments were suspended by the NTIA on December 4 after NTIA grant officers decided that BIT was out of compliance with the terms and conditions of nearly $19 million grant.

BIT was given 60 days to address nine deficiencies identified by the NTIA, including proof that BIT’s networks were operational, were being marketed or could be by a date certain, and that BIT had taken the appropriate steps to rectify “interference issues” by filing a complaint with the Federal Communications Commission (FCC).

NTIA also demanded financial and organizational information including a complete accounting of BIT’s sources and use of funds on this project, and resumes of all personnel involved with the project.

BIT’s response is currently under review by NTIA grant officers. They have the authority to approve BIT’s corrective action plan or terminate the grant.

On December 4, NTIA officials initiated one of the more severe enforcement actions against BIT — it suspended the grant awarded to BIT. According to NTIA officials, “Suspension of an award is used when grants officers determine that circumstances warrant temporarily stopping all activities under an award, including making payments to the recipient, pending the recipient taking corrective actions.” The only penalty more severe is termination of the award.

In 2010, BIT’s internet project was one of 233 funded under a plan to create a broadband technology network throughout the United States, particularly in underserved areas. The nearly $19 million in stimulus money it received through the NTIA was accompanied by an additional $4 million grant from the Virginia Tobacco Commission.

Both grants were to be used by BIT to install a broadband network in 15 counties in Southside Virginia by December 31, 2013. BIT claimed its 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.”

Despite spending over $19 million by December 2012, and calling its project 80 percent complete, BIT had only 97 customers (2 businesses, 92 residences, and 3 community institutions). During an end of year presentation to the Virginia Tobacco Commission, BIT President Mickey Sims said the company plagued by problems with its WiMAX firmware and software optimization, and “interference problems” from existing equipment installed by other telecommunication providers in the area. Full implementation of the network would not take place until those concerns were addressed, according to Sims.

Once the grant officials complete their review, BIT could have less than eight months to deliver an operational broadband network to Southside Virginia.

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