Bluegrass Beacon: Virus of secrecy infects KentuckyWired program
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Editor’s note: Since this column was originally released on Sept. 17, the commonwealth finally – finally – posted the KentuckyWired contract. However, the points made here about this big-government boondoggle remain very timely and relevant.
If Gov. Steve Beshear’s administration wants taxpayers to trust it to build KentuckyWired – a $350 million, 3,000-mile high-speed Internet network – then bureaucrats in charge of the project should at least be technologically capable of scanning and posting a copy of the commonwealth’s contract with Macquarie Capital, its Australian partner.
Could it be the administration doesn’t want taxpayers to know the details because Macquarie has a poor track record when it comes to government-owned high-speed Internet projects in other states?
Instead of just releasing the documents, a Finance Cabinet official responded to a simple request to see the contract by claiming his office was having technical difficulties posting the documents online but claimed they would be available in another week or so.
It’s supposedly been months since a deal was reached, yet we still haven’t seen the contract.
With a project this big and with all Kentucky taxpayers on the hook, an open-records request should not even be required. The details should have been revealed even before it was signed.
Perhaps the claim about “technical difficulties” is just a smokescreen for politicians in Frankfort, including legislators – who slipped a $30 million KentuckyWired-expenditure into the 2014 budget and who would rather not have us privy to its details.
If KentuckyWired is as good as Beshear’s public-relations machine claims and even the gubernatorial candidates naively believe, wouldn’t they want taxpayers to know as much as possible – as soon as possible – about its greatness?
“Here in Kentucky, you’re about to be given a gift,” Brian Mefford, CEO of Connected Nation Exchange, piped up with all of the sunshiny-ness he could muster during a recent broadband conference. “And the only thing you had to do to get that gift is to be a taxpayer.”
He’s right: this project surely will be a gift that keeps on taking … from taxpayers.
There are other question marks about the project, including how Frankfort’s genius bureaucrats and politicians concluded they could build an entire statewide network for $350 million when it cost $500 million to construct a gigabit network in one city – Chattanooga, Tennessee.
Also, realizing that there usually are cost overruns even on projects that government knows how to build reasonably well – such as roads, bridges and schools – what’s the contingency plan for such excesses related to the KentuckyWired initiative?
What happens if the project runs out of money before completion? Will taxpayers be forced to ante up and make up the difference?
Considering that, conservatively, 85 percent of Kentuckians already have access to high-speed Internet service, where will KentuckyWired find its customer base?
Will state government quit doing business with private companies who currently serve city colleges and universities? What would such an approach do to the rates of private Internet providers?
What if the network can’t get enough subscribers to properly fund it?
Will all Kentuckians be forced to pay higher utility fees, like Macquarie Capital tried to tack on to utility bills of Utah residents – even those who already had their own service or simply didn’t want to subscribe to the 11-city government network?
Who will build this Internet highway? Originally, rural Kentucky contractors were promised that this would be a true public-private partnership – with them involved in constructing the fiber-optic lines for the network.
We now hear rumblings that a Canadian company is going to be brought in to build out the network instead of employing those who live, work and contract in – and know – rural Kentucky.
Making taxpayers wait to see the details until after Frankfort already committed to funding this deal is like forcing a home owner or car buyer to make the deal before finding out the terms of the loan.
It would be like saying “we’re giving you a gift,” only to find out later it was a genuine dud.
Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.