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Lawsuit Launched Against Colorado’s Eagle-Net

August 3, 2015

Blue and red fibre optical cablesLast month, the Coalition for the New Economy reported a private company called Zayo Group in Boulder, Colo. had agreed to bail out a government-owned broadband network (GON) in that state. Over the weekend, the Longmont Times Call ran a lengthy piece outlining the problems with this GON, which is called Eagle-Net.

According to the Times Call, Zayo Group isn’t the first private company to help out Eagle-Net. An Austin, Tex. firm called Affiniti Inc. took over the project in 2013 after the federal government had suspended federal funding for Eagle-Net due to “compliance problems and issues with reporting and documentation.” (Federal taxpayers were to kick in $100.6 million for Eagle-Net; the Times Call said Eagle-Net had spent about $96 million of that by the time of the suspension, but only half the network was built. Denver Rotary Club officials, who had backed the project, were outraged.)

While lawmakers in Colorado raised issues about Affiniti when the agreement was announced, according to the Times Call, it is Affiniti that is now suing Eagle-Net. The lawsuit cites Eagle-Net’s failure to pay and the fact that it did not inform Affiniti of “several problems with Eagle-Net” before the company’s takeover. (The article doesn’t identify what problems Affiniti is referring to and officials from the company wouldn’t comment on the lawsuit.) The lawsuit comes after Affiniti agreed to give Eagle-Net $8 million to finish construction and inked a 25-year operating agreement with it.

According to the Times Call, Eagle-Net’s problems have also forced it to drastically cut its workforce. The newspaper reports the system now has just three employees, down from 26 at the beginning of 2015.

Here is how the Times Call sums up Eagle-Net’s issues: Over five years, the network “stumbled repeatedly, spending vast sums of cash, changing plans and pushing back its deadlines for finishing the project, which was initially supposed to be done at the end of 2013.”

Brian Shepherd, Gov. John Hickenlooper’s (D-Colo.) broadband program manager, told the Times Call the state wanted to partner with the federal government on Eagle-Net because it didn’t “have large amounts of money to throw out and say hey, go build some broadband.”

With an $18.15 trillion national debt and other pressing priorities to address, the federal government doesn’t have a lot of extra cash to invest in broadband either – especially if it means gambling, and losing, $100 million.