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TMCNet:  Senators briefed on progress of public broadband project

[November 15, 2012]

Senators briefed on progress of public broadband project

ST. THOMAS, Nov 14, 2012 (The Virgin Islands Daily News - McClatchy-Tribune Information Services via COMTEX) -- Senators were pleased Tuesday to hear about the progress of the V.I. Next Generation Network, the government entity currently building the territory's first open access broadband network.

"I am really, really, pleased with the progress you have made," Sen. Louis Hill said.

At a quarterly oversight hearing in the Senate Economic Development, Technology and Agriculture Committee, the top executives of the government-owed company gave updates about the construction of the network. They also answered questions about conflicts of interest, unused construction equipment and federal and local money spent so far on the project.

Deadlines and expenditures The Next Generation Network's president and chief executive officer, Lawrence Kupfer, said he is confident the government will meet its deadlines to complete the network.

The Comprehensive Community Infrastructure Grant -- the grant that funds the actual construction of the network -- requires the project to be built by July 31.

The Next Generation Network already has awarded several major construction contracts, and work has begun trenching along the roadsides to install conduit -- pipes -- for the fiber-optic cable to run through. The work is split into four contracts, two for St. Croix and two for St. Thomas, and will be done simultaneously, Kupfer said. The trenching should take four months to complete, he said.

The network has awarded more than $20 million in construction contracts in the last three months and about $9 million worth of contracts currently are out to bid, Kupfer said.

Vicki Johnson, the director of the Office of Economic Opportunity, who manages the federal stimulus grants awarded to the territory, said about $14.1 million has been expended under the Comprehensive Community Infrastructure Grant so far. Only about $200,000 of that covers salaries and benefits for those employees working directly under the grant, Johnson said. The rest is mostly equipment and material, she said.

About $7.7 million has been reimbursed, and another $1.2 million has been approved for reimbursement, according to Johnson.

The way the federal grants work, the network must spend money and then be reimbursed for it later on, she said.

The V.I. government received $58.9 million from the federal government under the Comprehensive Community Infrastructure Grant. In addition to the federal funds, the local government must provide a $14 million cash match, plus a $15.5 million in-kind contribution from the V.I. Water and Power Authority for use of the utility's existing poles and underground conduit lines.

Conflicts of interest In September, V.I. Next Generation Network board members voted to authorize Kupfer to negotiate a contract -- up to $50,000 -- with board member Peter Schultz for technical consulting. Schultz is a co-inventor of fiber-optics.

Committee chairman Sen. Shawn-Michael Malone came down hard on the board at the time, saying the move was a gross violation of V.I. law and a serious conflict of interest that could place the whole project in jeopardy.

Tuesday, Kupfer said that while the board authorized him to negotiate a contract with Schultz, he has not yet done so.

"We have not entered into negotiations," Kupfer said.

Kupfer said it was not a conflict for a board member to also provide a professional service to the agency. The network's procurement policy has an exemption for professional service contracts, and they do not need to be publicly bid, he said.

Schultz would give the advice that is best for the network, regardless of what role he was serving in, Kupfer said.

"I see it more as a unity of interest, not a conflict of interest," Kupfer said.

Johnson said that the resolution approved by the board in September includes language that says the contract shall not violate any federal or local law.

Malone said he respects Schultz and is glad that his expertise is available to the board, but if he wants to get paid as a consultant, he should resign as a board member.

"We think he can do both and we want him to do both," Kupfer said. "We believe it's legal under V.I. law. We don't believe there is a conflict." Computer centers and training Another of the four federal grants given to set up the network totals $4.4 million and is to establish public computer centers in the territory to give Internet access to those who may not be able to afford it.

Kupfer told senators that the first seven centers opened Oct. 31.

On St. Thomas, the first centers are at the V.I. Labor Department and the nonprofit New Image Foundation in Havensight.

On St. Croix, the sites are at the V.I. Labor Department, the Boys and Girls Club in Christiansted, the Walter I. M. Hodge Pavilion, and at the Louis E. Brown Apartments.

Kupfer said 33 sites have been identified, but the budget is based on 28 centers. He told senators he is hoping the budget can stretch to allow all 33 sites to open.

Under the $3.6 million federal Sustainable Broadband Adoption grant, the network has awarded BetterWorld Telecom a $1 million contract to operate two "hubs" in the territory. The one on St. Croix already has opened under the name in Frederiksted. The St. Thomas hub is scheduled to open soon in Havensight.

The hubs will offer work stations for rent and free job training and job placement for people interested in doing online contract work. So far, about 50 people have been placed in jobs working remotely from home, the hub or a public computer center, Kupfer said.

As the territory's broadband network goes live, the higher speed Internet will open up the online job market to more Virgin Islanders, Kupfer said.

The project As a subsidiary of the V.I. Public Finance Authority, the V.I. Next Generation Network was created to build and operate a broadband network for the territory. The $117 million broadband expansion project is funded by four federal stimulus grants awarded by the National Telecommunications and Information Administration -- a division of the U.S. Commerce Department.

The project includes the construction of a core fiber-optic ring network on four islands -- St. Thomas, Water Island, St. John and St. Croix -- which would reduce the territory's cost of connecting to the Internet and increase Internet connection speeds for consumers.

The territory's network would tie into the infrastructure of fiber-optic lines that cover the globe and end just offshore of St. Croix. The government network would be the middle mile, connecting the offshore fiber network to the local telecommunications service providers.

Kupfer told senators that all last-mile providers have expressed interest in buying bandwidth on the network once it is up and running.

At first, many of the territory's existing Internet service providers were against the government project.

"I think the last-mile providers were a little threatened," Hill said. "So, I'm pleased that they have recognized that this was not some sort of agency set up by the government to compete with them." - Contact Aldeth Lewin at 714-9111 or email

___ (c)2012 The Virgin Islands Daily News (St. Thomas, VIR) Visit The Virgin Islands Daily News (St. Thomas, VIR) at Distributed by MCT Information Services

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