Kentucky Awards Contract for State Wide High Speed Internet Installation

Even the most rural parts of Kentucky will have access to high-speed Internet service by 2018, with area officials saying the service will help to modernize the state in the areas of education, economic development, health care and public safety.  The project is projected to add more than 3,000 miles of fiber across all 120 counties, with initial installaion beginning in Eastern Kentucky.

Governor Steve Beshear, and Representative Hal Rogers, R-Somerset, called the expanded service "the modern-day equivalent of the interstate highway system." at a news conference on Tuesday.

Beshear and Rogers have been working together to upgrade the infrastructure in Eastern Kentucky through the "Shaping Our Appalachian Region" initiative, or SOAR.  On December 19th, the pair announced that the state had contracted Macquarie Capital of Australia to create "a robust, reliable, fiber backbone infrastructure to bring high-speed Internet connectivity to every corner of the Commonwealth."  Beshear also said that in Eastern Kentucky, the network's primary components are scheduled to be installed and operational in less than two years. 

The contract comes with a price tag between $250 million and $350 million. The wide range in pricing, Beshear said, is because Macquarie may be able to utilize some existing buried or aerial fiber lines, which would cut the cost of the project significantly. Funding for the venture will not be passed on to Kentucky taxpayers, however, and is provided in part by a public-private partnership.  The project is also supported by about $30 million in state bonds and from $15 to $20 million in federal grant money.  Rogers said the recent federal budget bill also included $10 million for the Appalachian Regional Commission to improve broadband networks within central Appalachia, and Beshear said Kentucky intends to apply for grants from the commission for the SOAR project.

"If we were to rely solely on state government funding to get this project off the ground, it would take years, if not decades. Those kinds of tax dollars just aren't available," Beshear said.  "In this technology-dependent economy, we can't afford to wait another minute. That's why this partnership is so valuable: It ramps up this project to the speed of the private sector without any additional burden on our taxpayers."

"Macquarie Capital and its partners are extremely excited about the opportunity to develop this network under the public-private partnership model, bringing together a team of market leading specialists focused on implementing the network as quickly as possible," said Nick Hann, the company's managing director.

Beshear said that most homes in the state have access to an Internet Service Provider, but stressed that mere access is not the same as high-speed broadband.  Kentucky now ranks 46th in broadband availability, and about 23 percent of residents, mostly in rural areas, have no access to broadband of any kind. High-speed broadband, such as fiber internet, is capable of carrying a wider stream of data to a larger group of users in a shorter amount of time.

One of the most important features of the network, Beshear said, is that it truly will be "open access", meaning that other Internet and cell phone service providers will be able to lease portions of the fiber optic network to improve coverage in the areas of the state that typically have poor cell phone reception.  The network will also be open to other Internet service providers, adding competition in the market with the hopes of driving down the cost of the Internet access.