Rural Colorado awash in federal broadband subsidies

Jul 19, 2012

Peter Blake / Colorado News Agency

This is free enterprise stood on its head: Two federal agencies subsidizing, to differing degrees, two competitive organizations trying to serve the same market.

The two agencies apparently don’t talk to each other even on a land line, let alone on the high-speed computer lines they want built.

In one corner: Eagle-Net, an intergovernmental entity that is building a broadband network that will end up serving 230 hospitals, libraries, schools, colleges and local government buildings across rural Colorado. It is financed by a $100.6 million grant in federal stimulus funds that came from a division of the Commerce Department in 2010.

In the opposite corner: Colorado’s 25 small private telephone companies that serve areas too remote to interest CenturyLink (and its numerous predecessors).  Some of them are also building broadband networks, financed partly by federal grants but mostly by low-interest loans from the Agriculture Department’s Rural Utilities Service.  Unlike Eagle-Net, they serve homes and businesses, but they also depend heavily on revenues from the same institutions Eagle-Net is trying to serve.

So what’s wrong here?  Does this kind of competition help keep prices down?  Probably not; competition is perverted when tax money is being used to promote both sides.

“We don’t understand why we have two federal agencies that are funding the same projects,” said Pete Kirchhof, executive director of the Colorado Telecommunications Association.

For instance, he said, the tiny Agate Mutual Telephone co-op in Elbert County has provided fiber to a school with just 12 students.  Now Eagle-Net has come in and built fiber to the same school. …read full column

Veteran Colorado political columnist Peter Blake writes weekly on state issues for the Colorado News Agency.

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Tags: Agate Mutual Telephone, Board of Cooperative Educational Services, CenturyLink, Colorado Telecommunications Association, Eagle-Net, Gretchen Dirks, Pete Kirchof, Rural Utilities Service, U.S. Department of Agriculture, U.S. Department of Commerce, Woodlin School District