Rural county board acts to prevent duplicated broadband efforts

An ultra fast broadband tower is seen on a rural farm. (Sandra Mu/Getty Images)

LINCOLN — A rural Nebraska county board has voted to do something a state commission had declined to do, which is to prevent a duplication of taxpayer funds to deploy broadband internet.

The decision by the Gage County Board came after two state senators urged board members to avoid a waste of taxpayer funds by allowing two government grants to be used to service the same area, just outside of Beatrice, with high-speed internet service.

The senators, Bruce Bostelman of Brainard and Myron Dorn of Adams (who represents Gage County), told the county board it didn’t make sense to subsidize a broadband project that’s already been subsidized by taxpayer funds. They said such funding should focus on areas that either have no broadband service or have inadequate internet, rather than to “overbuild” where one project is already well underway.

“When we start using funds to overbuild, we’re taking away funds from somewhere else,” said Bostelman, who chairs the Legislature’s committee that oversees telecommunications issues and has pushed more aggressive moves to deploy broadband.

Company considering its options

“This is a waste of taxpayer dollars,” said Gage County Commissioner Emily Haxby, who had tried, unsuccessfully, to convince the Nebraska Public Service Commission to resolve the overbuild.

The May 1 decision by the Gage County Board, on a 5-2 vote, means that a $535,000 state Broadband Bridge Act grant to Pinpoint Communications will likely be rescinded and the funds reallocated to other areas of the state. 

A representative for Pinpoint Communications said Saturday that the Cambridge-based firm is considering its options in appealing or overturning the decision. 

Technically, the Gage County Board voted to deny the use of its county right of way to deploy fiber internet lines, but the issue and debate extended far beyond that subject into how best to utilize the millions of dollars of federal and state funds being devoted to expand high-speed internet into areas that don’t have it now.

The so-called “overbuild” occurred after Gage County had already launched an innovative program, using $4 million of its federal American Rescue Plan Act allocation, to pay the internet firm NextLink Internet to expand broadband to 95 unserved and underserved rural areas of the southeast Nebraska county.

But a second company, Pinpoint, that had been building a high-speed internet network in Beatrice had obtained a $535,000 state grant through the Nebraska Public Service Commission to expand services into the same area.

The issue of the overlapping grants was first reported by the Examiner.

At the May 1 meeting, Pinpoint was seeking approval of a “utility permit” to use county right-of-way to begin construction of its fiber optic lines. Meanwhile, county board members were told that NextLink, the firm hired by the county, had already laid its lines to the 23 locations under contention.

Haxby, a county board member who had led the county’s broadband project, had questioned the overlap of grants to officials with the Public Service Commission, to no avail.

In March, the PSC rejected an appeal by NextLink to reconsider its grant to Pinpoint, saying the request for reconsideration had been filed a day late. 

PSC Chairman Dan Watermeier stated in a March press release that NextLink failed to follow the procedures to appeal, a process that is “not only set forth in statute but is also well defined by the Commission,” and thus Pinpoint’s $535,000 grant would be approved.

But in order to fulfill the grant requirements, Pinpoint needed the utility permit from Gage County to use right-of-way, and on May 1, that permit was denied.

It marked the first time in five years, commissioners were told, that a usually routinely approved utility permit had been denied.

At the meeting, Tom Shoemaker, Pinpoint’s president, and its attorney Andy Pollock urged the county board to issue the “simple” permit and not get intertwined with whether or not the PSC had acted appropriately to award the overlapping grant.

Pollock said the only question that needed to be answered to issue the permit was whether it would be used for “a public use,” and that clearly was the case.

“The issue here is not to correct or second guess the Public Service Commission,” the attorney said. That, he added, would be a question for the Nebraska Supreme Court, not the Gage County Board.

County board urged to deny permit

Haxby and Loel Brooks, a Lincoln attorney who has consulted with the county board on broadband issues, said the commissioners have the discretion to reject a utility permit. They added that a condition of the Broadband Bridge Act is that grants not be awarded in areas that are already getting government assistance.

Brooks said the PSC has a lot of issues before it, but he could not say exactly why the state commission didn’t act to eliminate the overbuild.

Haxby said she had told PSC officials about the overlapping grants well before its deadline for appeal, but a formal appeal, by NextLink, was a day late.

Still, she said, it would be a waste of taxpayer funds to finance two broadband projects in the same area, and the correct course of action was to reject the utility permit, so the $535,000 grant could be redeployed elsewhere in Nebraska where it was needed.

Bostelman said that there was a limited amount of money to expand broadband in the state and that the PSC had “failed” to prevent the overbuild.

“We have to make sure every dollar is used in the best place we can,” he said.

Pollock said Saturday that Pinpoint was considering its options to seek to overturn or appeal the action by the Gage County Board.

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