‘Original intent’ the right solution to Kentucky Wired boondoggle

By Jim Waters - Bluegrass Beacon

The theory of original intent may be a legal concept in which judges ascertain what America’s founders really meant when they wrote the Constitution.

But it could also work for governors trying to find their way out of wasteful broadband projects sloppily enacted by previous administrations.

Gov. Matt Bevin earlier this year announced plans to scale back Kentucky Wired, former Gov. Steve Beshear’s $340 million statewide broadband boondoggle, to its original purpose: providing more eastern Kentuckians hit hard by the loss of thousands of coal jobs increased access to high-speed Internet service and the economic doors it can open.

Kentucky doesn’t really need any part of this boondoggle.

The 160 broadband providers already located in the commonwealth have expanded access and increased Internet speeds.

Kentuckians with access to a wired connection of at least 10 megabits per second—well more than the bandwidth needed to download a high-definition movie—has grown from 80 percent to 86 percent just since 2011 without a government-owned broadband network.

Obviously, private providers—not governments—are the experts in this field.

However, while the state may not need it, the Beshear administration ensured that contracts signed statewide to build the 3,400-mile boondoggle would cost the state more than $100 million to cancel.

A much-better approach would have been to allow telecom reforms passed last year and signed into law by Beshear the opportunity to do what they were designed to do: entice more private-sector investment, which would give even more Kentuckians access to better, faster Internet without taxpayers being on the hook.

The fact that building broadband infrastructure is no job for government bureaucrats was starkly obvious in recent legislative testimony by Chris Moore, the new executive director for the Kentucky Communications Network Authority.

Moore told a Joint Legislative Budget Review Subcommittee on General Government, Finance and Public Protection that the project’s first phase won’t be finished until early 2019—far behind the promised April 2016 completion of the entire project.

Yet payments on more than $250 million worth of bonds have started coming due, meaning Kentucky taxpayers are shelling out hard-earned dollars for a project that won’t bring in a single dime of revenue for at least nearly three more years.

A private contractor that far behind in building a road for the commonwealth would at least be penalized severely, if not thrown off the job altogether.

Don’t expect to see such accountability exercised in relation to Kentucky Wired, however.

Instead, we’re hearing excuses, including subtle but manifestly wrong assertions by Frankfort bureaucrats that private companies are somehow to blame for the project’s delay because state officials mistakenly assumed rights-of-way and pole attachments were publicly, not privately, held.

There are severe consequences for such blatant incompetence in the private sector where securing agreements with those who hold such rights in the timeline of a project—especially a major one like Kentucky Wired—is standard industry practice and where the future of a company depends on getting it right.

The best way out of this mess is to significantly scale back the project, which was originally part of the Shaping Our Appalachian Region (SOAR) initiative and meant to help bring the economic opportunity of high-speed Internet to eastern Kentuckians in poor counties.

Macquarie Capital, the state’s less-than-stellar foreign and private partner with a failed track record in similar projects, must be forced to use local rural telecom providers who know, live and work in Appalachia’s rough mountainous terrain and who’ve been hit hard by the coal industry’s downturn to do the building.

“My intent is to see it come back to its more original intent, and let’s start there,” Bevin told reporters following a SOAR board meeting in February.

Let it end there, too.


By Jim Waters

Bluegrass Beacon

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.

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