Looking at feeding fiber to small towns

DENVER - Legislators got more questions than answers Tuesday when they grilled officials from the group that is building a fiber-optic line to Silverton and other rural towns in Colorado.

Eagle-Net Alliance has come under increasing scrutiny since Dec. 6, when the federal government suspended its $101 million grant to build high-speed communications lines to schools and government buildings around the state.

"We do not understand where the money's going, where it's being spent, who's being served, who's not being served," said Rep. Jerry Sonnenberg, R-Sterling.

The alliance of local governments and school districts is in the last year of its three-year grant to build broadband lines across Colorado. The lines will serve as an intranet - a closed communication system among schools - but the network also will be able to plug into the public Internet.

One of the last major pieces to build is a line from Pueblo to Durango. Currently, web traffic across southern Colorado is routed through Albuquerque.

Eagle-Net also plans to build a spur to Silverton. It is Silverton's best chance at getting a high-speed Internet line in the near future.

But critics have accused Eagle-Net of competing with private telecommunications companies and duplicating services, especially on the Eastern Plains. As a result, Eagle-Net dropped 10 locations from its proposed statewide network.

Lawmakers who tried to dig deeper in Eagle-Net's finances and governance grew increasingly frustrated Tuesday at a one-hour hearing of the Legislative Audit Committee.

"You guys don't get it," Sonnenberg told Eagle-Net officials, raising his voice. "You do not understand the frustration that you're trying to do something, and you don't have any transparency. You do not answer to anybody, and that's the concern."

Legislators were confounded by what exactly Eagle-Net is. It's not a business or a nonprofit, and it's not a division of the state government that has to open its books to scrutiny by lawmakers and the public. Instead, it's an "intergovernmental entity" that's registered with the Department of Local Affairs.

Chip White, Eagle-Net's vice president of business development, said the group has never changed its plan to connect schools and government buildings across the state - a plan that was approved by the federal government more than two years ago.

"We need to complete this. If we don't, you're going to have pieces and parts of things that don't connect, and that does nobody in Colorado any good at all," White said.

The $101 million grant came from the Department of Commerce through the American Recovery and Reinvestment Act, popularly known as the stimulus bill.

Eagle-Net hopes to unfreeze its grant in the next four to six weeks, said Patrick Swonger, the group's representative in Southwest Colorado, in a phone interview.

The plan is to complete the line from Durango to Silverton by the end of the 2013 summer construction season, Swonger said.

Eagle-Net fills a gap in "middle mile" infrastructure that private companies either can't afford to build or don't want to build, Swonger said.

"It's an incredibly important project," said Swonger, who has been trying to get high-speed Internet in Silverton for a decade. "When I got the chance to work on it, I jumped at it."

When the line is completed, any Internet service provider will be able to pay a fee to use it and offer connections to homes and businesses, he said.

"I think when it's all done, people are going to see how important it is," Swonger said.

But until then, legislators still feel left in the dark.

Eagle-Net will have to do a self-audit and submit it to the State Auditor's Office this spring, and legislators asked Eagle-Net executives to come back for another hearing before that audit is due.

"The more we talk to Eagle-Net, the more questions we have than answers," said Sen. Lois Tochtrop, D-Thornton.

joeh@cortezjournal.com