Indiana’s cable and broadband associations oppose a deal to license managing and marketing the state’s communications infrastructure to an Ohio-based company. Inside Towers recently reported that under the deal struck in September with Indiana, Agile Networks would pay $50 million for the right to manage the network for 25 years. That would include controlling the state’s cell and radio towers, fiber-optic cables and streamlined rights-of-way.
The state said at the time the arrangement would provide a way to extend broadband to rural areas, but Indiana Cable Executive Director Joni Hart and Indiana Broadband and Technology Association President John Koppin say that’s not true. According to Hart and Koppin, the Indiana Finance Authority has acknowledged there is no mechanism in place to require Agile to extend service to rural areas, reports watchdog.org. However, an Agile Networks spokesman told CantonRep.com the company expects to spend a year building out the network and then extending broadband service to rural areas to help local providers offer their services more cost effectively.
“Our companies will need to weigh carefully the wisdom of investing scarce capital in a market where the competition is subsidized by the State of Indiana’s considerable resources,” Hart and Koppin say in a letter to the state of Indiana obtained by watchdog.org. “The existence of a state-owned fiber network … and the possibility that it might be made available for private use was not discussed in the talks leading up to the deal,’ they said.
Indiana Finance Authority Director Dan Huge told watchdog.org the selection process was transparent and the state chose Agile out of eight parties “because it demonstrated it could provide the most benefit to the state based on its ability to provide a sizeable up-front payment, future revenue shares, and help expand/improve broadband connectivity throughout Indiana.”
He said the state is contacting members of the telecom industry to address their concerns. In addition, several details of the agreement between Indiana and Agile still need to be hammered out and more details will be revealed.
Wireless Operations Manager for Lisbon Broadband and Communications, Steve Barnes, also protested the arrangement to Hughes. He says the best way to help rural broadband grow is to reduce the barriers to entry, primarily access to state-owned assets and rights-of-way. “With this agreement the State of Indiana just subsidized an out of state competitor and made them a middleman, increasing the barrier to growth of Rural Broadband in Indiana,” he wrote in a letter co-signed with nine other internet service providers.
The state’s budget committee must still sign off on the deal. Meanwhile, Koppin plans to meet with legislative leadership about the issue.
Indiana estimates the state will garner about $36 million in revenue during the first 25 years of the deal. Agile can choose to renew for another $10 million up-front payment after 25 years, and the state expects to bring in a total $164 million during that time.
October 13, 2016
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