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$5.22M grant sought for broadband project

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On July 21, regional officials were in Steamboat Springs making a pitch to an advisory committee of the Department of Local Affairs (DOLA) asking for $5.22 million in energy assistance impact grant funds.

The money, if awarded, would go toward building a Phase 1 broadband fast-Internet access network in Delta and eastern Montrose counties -- an area defined essentially by the DMEA service area. (Montrose County government opted out of participation in the regional broadband idea.)

The total $9.9 million Phase 1 project envisioned by the Region 10 organization which made the grant request will not bring broadband fast-Internet access to private homes or businesses. Instead, the Phase 1 plan would supply broadband fast-Internet access to "anchor institutions" including government, schools, health care facilities, and other institutional users.

According to Region 10 grant documents, "The plan includes build-out to a majority of anchor institutions within the service area." The application also states that the regional project "has several phases," though no timeline for completion of other phases or of the entire project is stated.

"Once this (Phase 1) infrastructure is established and Phase 2 is underway," states the Region 10 grant application, "individual Internet service providers (ISPs) can apply for access to the network in order to deliver end-user service connections to businesses and residents."

Region 10 is based in Montrose. Its director describes it as "a quasi-governmental non-profit." According to the Phase 1 budget submitted with the grant application, Region 10 is contributing no funds or in-kind value accountable to the project. However, if Phase 1 is funded and built providing broadband fast-Internet access to institutions, "Region 10 and partners are able to develop the open access broadband infrastructure while remaining third-party owners of the network."

Region 10's major partner in the project is DMEA. It is making its own fiberoptic cable available to the Region 10 project. It is also considering three "business scenarios" of its own that could transform it into a local Internet service provider, possibly even competing with other private ISPs if any should decide to enter the local "last mile" Internet business.

At DMEA's annual meeting last month in Cedaredge, then board president Olen Lund said three Internet business plans were being studied by the co-op: a wholesale business plan, a retail plan and a hybrid plan combining aspects of the other two. Details of the plans were presented to the DMEA board in an hours-long, closed-door meeting on June 23 by digital consultant Celerity of McLean, Va.

According to the Region 10 grant submittal, "the final design and project management will be provided by the consultant team that produced the regional plan." That team is the consultantcy NeoFiber of Carbondale whose initial work on the project was covered mostly with a previous $100,000 grant from DOLA. According to the Phase 1 budget provided by Region 10 in its grant application, those final design and project management services combined will cost the project just over $1 million.

The entire Phase 1 project is estimated at $9.9 million. Of that amount, according to the grant request, $4.67 is being contributed locally. The request grant of $5.22 million makes up the balance.

The Region 10 grant request relies heavily on portraying Delta and Montrose counties as "suffering" from "economic hardship" and "economic distress" because of coal mine layoffs, out-migration of residents for employment opportunities, and because of the lack of broadband fast-Internet service.

The Colorado Department of Affairs (DOLA) has made a special pool of $20 million available as grant funds for broadband projects. Region 10's request at Steamboat Springs will be heard along with three others from the region:

• A Rio Blanco County request for $1.66 million;

• A San Miguel County request for $337,483; and,

• A Northwest Colorado Council of Governments request for $310,000.

According to documents supplied by DOLA, the Region 10 $5.22 million grant request lists the following anticipated first phase project expenditures:

• Value (in-kind) of DMEA supplied access to fiberoptic cable, $2.22 million;

• Cost of easement perfection to DMEA, $1 million (according to the DOLA documents and to people close to the project, half of DMEA's $1 million easement perfection would be paid for with grant funds if received);

• Tri-State fiber access for 20 years, $244,082;

• Cost of new build routes, $1.25 million;

• Various "facilities," $1.14 million;

• Community "anchor institutions" fiber and equipment, $3 million;

• Design services and construction management, $550,427; project management, $451,684.

Local cash contributors to the project listed are Delta County, $738,519; City of Montrose, $752,500; and, City of Delta, $461,000.

Total amount of cash and in-kind funding is listed as $4.67 million or 47 percent of the total Phase I cost.

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