What Went Wrong: Florida’s Rural Broadband Network Declares Bankruptcy

A rural network that was supposed to bring broadband to the masses has dissolved after accepting $24 million in federal grants.

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(TNS) — A rural network that was supposed to bring broadband to the masses has dissolved after accepting $24 million in federal grants.

The Florida Rural Broadband Alliance went into Chapter 7 bankruptcy in April. It was established in 2010 to deploy broadband Internet services in 15 northwest and southcentral Florida counties, but never signed a single customer.

FRBA was created by Florida’s Heartland Regional Economic Development Initiative in Sebring and Opportunity Florida in Chipley. The two non-profits used an American Recovery and Reinvestment Act of 2009 grant build a network that beamed the internet from rented mobile towers.

Gina Reynolds, the last executive director of FHREDI, said the network was up and running when she left last summer to start her own economic development consulting agency. However, FHREDI didn’t have the budget to replaced Reynolds as executive director.

Greg Harris revealed some of those details Tuesday at a Highlands County commission meeting. Harris is a county commissioner and was a FHREDI director. He is now on the board of Florida Heartland Economic Region of Opportunity. FHERO’s new motto is, “The Future Is Here.”

“FRVA is in bankruptcy, FHREDI is being dissolved,” Harris told the county commission. “The reason why FRVA is in bankruptcy is that contractor that was running the network walked away from the network.”

Terry Burroughs, an Okeechobee County commissioner, is FHERO’s chairman.

“I’m the vice chairman,” Harris said. So far, FHERO has no other staff. Harris, Burroughs and Paul McGehee, business development manager for Glades Electric and a FHERO director, said FHERO has returned to FHREDI’s original mission, rural economic development.

“The counties, including me and our county, we felt like we weren’t getting anything out of the investment we were making into those organizations,” Harris said. “We can now concentrate solely on regional economic development based on conversations with site selector consultants … Enterprise Florida, including support from the governor.”

FHREDI includes Hardee, DeSoto, Highlands, Okeechobee, Glades, and Hendry counties and Immokalee city. The other nine FRBA counties are Holmes, Washington, Jackson, Gadsden, Calhoun, Liberty, Gulf and Franklin.

The Highlands county commissioners agreed to join FHERO and pay $10,000 in annual dues.

FRVA’s goal was to install central offices in Orlando and Tallahassee, to buy microwave dishes and computer servers, and deploy a middle-mile broadband network in the underserved rural areas of Florida. Counties qualified because they have populations less than 100,000 and low per-capita incomes, low per-capita taxable values, and high unemployment.

That equipment is still sitting in warehouses in Lake Placid and Tallahassee, Burroughs said. However, that last mile – the figurative mile between the middle-mile broadband network and the 200,000 residential and commercial users – never appeared. Although Harris and McGehee said they were aware of a contractor, and Reynolds said she signed a non-disclosure agreement, Burroughs said he never knew of a contractor. “When I first got on the board, they were trying to negotiate with a contractor. Gina was working with that, and it went on and on and on.”

An ex-telephone company executive, Burroughs said he became a FHREDI board member late in 2015. “There was probably a network at some given time, but I don’t think a last mile ever deployed. When I got there, the last mile was dark. … I never knew of a paying customer. They were trying to build a telephone company, and they were doomed to failure.”

McGehee said Glades Electric looked at joining the network, which was partially aimed at hospitals, schools and other larger users.

“It wasn’t suitable for us, but we weren’t the target user anyway,” McGehee said Wednesday.

“The operator who was contracted to run it as a company stepped away from it,” McGehee said Wednesday. He said he could not recall the contractor’s name.

The flaw in FRVA’s plan, McGee said, was that while the grant bought the equipment, there were no federal funds for operations. “No one wanted to step up and operate the network, and there was no way to pay the tower leases… The end product wasn’t a viable sustainable thing.”

“Why would it be successful this time, versus where FHREDI kind of went awry?” Commissioner Don Elwell asked Harris. “FHREDI was obviously in existence long before FRBA, but put all its eggs in FRBA’s basket. (FHERO) seems like it is more streamlined back towards the actual purpose for what FHREDI was originally meant to do, which is, of course, economic development. Is that fair?”

“Absolutely,” Harris said. “And we all felt the same way. We didn’t really know what FHREDI was doing. They were spending most of their opportunity on FRBA and the rural broadband. It got away from what we really needed to focus on. And we’re back.”

“And the rural broadband itself, obviously that got left hanging?” Elwell asked. “Is that just dead now? What work that has been done is gone?”

“We spent a lot of time trying to get other companies to come in and operate that, and it just didn’t work,” Harris said. “So the federal government owns all that equipment. And so that’s being turned back to the federal government. And so they will dissolve what remains.

“I also spoke with Terry Burroughs,” Commissioner Jim Brooks said, “And he is very passionate that this is the way to go. So I don’t have a problem with it.”

©2016 the Highlands Today (Sebring, Fla.). Distributed by Tribune Content Agency, LLC.

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