TMCnews Featured Article


October 20, 2009

'Shovel-Ready' Kodiak Kenai Cable Co. Hopes for 'Middle-Mile' Money to Fund Broadband Buildout in Alaska

By Marisa Torrieri, TMCnet Editor


To travelers and tourists who come here to experience its raw, picturesque landscapes and mountain-lined horizons, Alaska is frontier of breathtakingly untouched natural beauty.
 
But beyond this picturesque veneer lie miles and miles of rural state land where members of 143 Native American tribes and 142 communities still don’t have broadband Internet service – and all the benefits that come with it.
 
It’s those communities – along with U.S. military missions, and ocean and climate research operations – that comprise the driving force for the Northern Fiber Optic Link, one of the newest and largest proposed fiber optic cable networks in the country.
 
Project partners for the NFOL, led by Kodiak Kenai Cable Company, have applied for funds through the NTIA and RUS to deploy a shovel-ready, 3,500 mile “middle-mile” submarine fiber optic network across Western Alaska -- covering the largest and most remote unserved area of the country.
 
According to KKCC, NFOL construction will directly benefit 23 states around the country and directly support nearly 6,000 jobs. More than 80 percent of these jobs and money spent on the project will occur outside of Alaska. Additionally, the NFOL will pump more than $431 million of economic activity into the economies of 23 states.
 
“In terms of jobs created or saved, this would be one of the largest single job creating infrastructure projects in the entire country to be funded under the Recovery Act, and one of the most efficient in terms of dollars spent per job,” said Walt Ebell, CEO of KKCC. 
 
“As you recall from the Stimulus act, the number one goal is to spur job creation,” Justin Stiefel, a consultant for KKCC, told TMCnet. “As the government decides which initiatives to fund, job creation is at the forefront. Then, the next objective is to serve ‘unserved’ and ‘underserved’ areas. Based on job numbers released last week by the administration, this KKCC proposal alone would increase the Recovery Act job tally by 20 percent nationally when considering the 30,000 jobs accounted for to date.”
 
NFOL’s proposed system starts at Kodiak Island, about 200 miles south of Anchorage. That’s where KKCC got its start as a broadband provider for a commercial rocket launch facility supporting U.S. ballistic missile defense efforts, using broadband technology to test missiles, rockets and other equipment. Past the island, NFOL’s proposed buildout trail continues deep to the Alaskan mainland, which encompasses “the largest unserved area in the country,” Stiefel said.
 
Currently, these areas have limited to broadband via costly satellite technology systems.
 
“The average cost of a T1 mile in rural Alaska, at approximately 1.5 MB per second, currently runs anywhere from $8,000 to $15,000 per month,” Ebell said. “This is many multiples higher than what is charged in the Lower 48, and satellite service is not as reliable as fiber optic cable.”

“It’s very difficult to support education and remote healthcare needs,” Stiefel said. “With satellite, you have latency, you have downtime, and its cost prohibitive for the limited amount of bandwidth you might get.”
 
KKCC’s nearly 1,000-page application is requesting funds from the NTIA and RUS broadband stimulus programs. The proposal pending review at RUS is for $173 million in loans and $172 million in grants. The company already has $84 million set aside in matching funding. Under an alternative separate NTIA request, KKCC is seeking a $215 million grant and has lined up private matching funds of $215 million. Under the RUS and NTIA programs, the project would be funded under one pool of funds or the other, but not both programs simultaneously. 
 
But with more than 2,200 applications already filed for more than $28 billion funding -- and only one-seventh of that amount available in the first round -- competition is stiff. And although KKCC has done its homework and made a strong case for the money – detailing exactly how the money will create jobs, and how its NFOL project would be executed and completed – the “carrier’s carrier,” which lays down the cable upon which broadband Internet rides, faces another big challenge: The money allotted by the government for “middle mile” projects is reportedly much lower than for “last mile” or “first mile” projects.
 
Still, Stiefel said KKCC is optimistic about its prospects. The project has received support from a wide array of elected officials throughout the country including Sen. Arlen Specter (D-PA), U.S. Rep. Niki Tsongas (D-MA) and U.S. Rep. Rush Holt (D-NJ), among many others, Stiefel said. Further support has come from the scientific research community including Oceana, the Alaska Ocean Observing System; business community leaders like Wilfred P. Ryan, president of Arctic Transportation Services; as well as health providers, schools and universities, and the State Chamber of Commerce.
 
“To qualify for the money, you’ve got to be shovel ready,” Ebell said. “You have to have engineering and designing done, as well as the permits and land agreements ready to go. This money hit so fast in February, that we don’t think there will be a lot of middle mile projects that will be truly shovel ready under the program rules.”

Marisa Torrieri is a TMCnet Editor. To read more of her articles, please visit her columnist page.

Edited by Marisa Torrieri