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CO: Irony alert! $100 million federal stimulus could kill Colorado firms

By   /   September 19, 2012  /   1 Comment

Coffman: Stimulus could “wind up killing jobs and ruining small businesses.”

By Todd Shepherd | Colorado Watchdog

Four Colorado congressmen have asked the U.S. Department of Commerce to stop a federal program to bring high-speed internet access to the state’s rural schools, saying the project wastes taxpayer dollars by duplicating service and poaching customers from the private sector.

In a two-page letter this week to the U.S. Department of Commerce, Republican U.S. Reps. Mike Coffman, Cory Gardner, Doug Lamborn and Scott Tipton say expansion of Colorado’s EAGLE-Net Alliance — funded by a $100 million federal stimulus grant — must be stopped until the Commerce Department “fundamentally reassesses” its mission. Calling EAGLE-Net’s track record “extremely troubling,” the congressmen also want the department, which awarded Broomfield-based EAGLE-Net the grant, to address several concerns raised by small, rural telecommunications providers that say EAGLE-Net is using its federal bankroll to plow them under.

“U.S. taxpayers are being forced to subsidize a federal initiative whose most substantial accomplishment ultimately could be to put Colorado’s rural telecommunications industry out of business,” says the joint letter to Assistant Secretary for Communications and Information Lawrence E. Strickling.

Colorado Watchdog first reported on Aug. 27 that EAGLE-Net’s expansion has alarmed about 25 rural telecommunications companies and co-ops that have upgraded their own infrastructure at considerable expense to provide high-speed Internet access to small communities they have served for generations. The congressmen say those small providers “have been blindsided by EAGLE­Net’s vastly expanded ambition” to serve not only schools but also a host of other local public agencies and facilities.

“EAGLE-Net by many accounts is overbuilding its network right alongside recently upgraded high-speed fiber-optic lines installed by private providers,” the letter states. “Further, it openly intends to compete with those providers for the business of these ‘anchor institutions,’ which include local governments, law enforcement agencies, libraries and other public entities that, in rural Colorado, are the lifeblood of the private telecommunications providers.”

The letter goes on to note that “many of these institutions and their surrounding communities — places like the San Luis Valley, the Lower Arkansas Valley and significant swaths of northeastern Colorado — already benefit from high-speed Internet access, courtesy of those local telecommunications providers. The supposedly insufficient ‘market forces’ EAGLE-Net was intended to supplement have in fact been evolving rapidly to meet the needs of many rural Colorado communities, including their public schools.”

The letter further points out that some of the private providers also have used federally backed loans, through the U.S. Department of Agriculture’s Rural Utilities Service, to finance upgrades needed to offer customers high-speed Net.

“Their predicament highlights an almost absurd irony in that government branches are now competing against each other with taxpayer dollars,” they write. The letter concludes, “We urge you to take a strong look at this program to ensure that it does not wind up killing jobs and ruining small businesses in places that can least afford it.”

In a joint news release issued by three of the four congressmen on Tuesday, Gardner called EAGLE-Net’s overbuilding “terribly wasteful,” and Coffman called on the government to “avoid duplicative government programs and ineffective use of taxpayer dollars.”

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  • Mfg

    Internet service in San Luis, Colorado is a joke! We welcome anything that would improve what we have now!