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How Much Will Taxpayers Need To Spend To Finish KentuckyWired?

August 14, 2017

Last week, this blog highlighted state lawmakers’ growing worries about KentuckyWired, the Bluegrass State’s taxpayer-financed broadband system. We noted that, in a recent legislative hearing, some officials even called for plans to shut down the network. 

Bluegrass Institute President and CEO Jim Waters, who reported on the hearing in Richmond Register, seems to think that’s a good idea. He concluded the state legislators need to start practicing this line before their next session: “Read my lips: No new money. Shut it down.”

Waters also agreed with Sen. Chris McDaniel who suggested that it would cost taxpayers less to shutter KentuckyWired than it would to finish building it. That seems likely since it would appear that legislators are about to be asked to appropriate General Fund dollars for KentuckyWired.

According to Waters, though state officials originally promised the network would be “up and running by January 2017 at the latest,” only “129 miles of fiber strand has been laid to date.” (For those keeping track, that’s less than four percent of the 3,400 miles of fiber that eventually are supposed to make up the system.) The Kentucky Communications Network Authority (KCNA) already has spent $175 million and has “only $237 million remaining in the budget.” Officials from KCNA now believe they will need “at least” $413 million to complete the network.

In addition to needing more money to finish construction, the delay, according to Waters, will have a significant impact on whether the state will be able to make the payments on the bonds it used to financed KentuckyWired. KCNA was supposed to use revenues from the network to pay back its debts, but now officials might ask for money from the state’s general fund to make the bond payments, Waters said.

Waters notes that KCNA officials have blamed the construction delays on private providers who own the poles to which the state needs access in order to build. According to Waters, Rep. Phil Moffett believes those claims were bogus. Rep. said “anybody that’s been in this business any amount of time would have known that these delays were foreseeable.”

According to Waters, Rep. Suzanne Miles concluded that, when it comes to KentuckyWired, Bluegrass State lawmakers were “sold a bad bill of goods.”

Let’s hope they realize that before sacrificing Kentucky General Fund revenues.