Local cable company rejects federal broadband grant for having "too many conditions"

Broadband cable. Photo by Michael Coghlan, via Flickr.

Some excellent reporting by blogger and community activist Sam Pratt has prompted a story in the Daily Mail about Mid-Hudson Cablevision, which, both Pratt and the Mail report, is turning down $3.5 million in federal broadband grants it was awarded last year.

(We've been a little slow on the uptake on these stories, which ran in the last week of April. Hat tip to WGXC for turning us on to Pratt's reporting.) 

Mid-Hudson was awarded the grant last August, as part of a federal giveaway of millions of dollars that were earmarked in the economic stimulus package to boost access to broadband internet in poor rural areas. Mid-Hudson was one of only two Catskills-area organizations to score some of the federal broadband funds -- the other local recipient was the Deposit Telephone Company. Other local groups, including the Middleburgh Telephone Company and Otsego County, applied for and failed to get funds under the program. 

So it really stings to hear that Mid-Hudson won't be using those funds after all, writes Pratt, who was expecting the grant to help him get broadband in his home, in the town of Taghkanic in Columbia County:

It’s hard to imagine any company turning up its nose at nearly $3,500,000 in free money... especially in this economy, and if that money would both expand the company’s customer base and also perform a vital community service.

But apparently, Mid-Hudson Cablevision is one such company.

As a result, potential rural customers in hard-to-reach “last mile” locations—including Yours Truly—are being told they’ll have to pony up thousands of dollars each just to get connected. Customers in densely-settled cities like Hudson or within 200 feet of existing lines typically pay no such fee ...

[A]ccording to Mid-Hudson engineer David Fingar, the company has since decided not to tap into these funds—at least for the moment. Asked why (during a cordial visit to my property recently, after I'd placed multiple calls over the past three months to MHC about availability in my area), Fingar stated that there were “too many conditions attached” to the funding, but did not rule out accessing the funds later.

When the Daily Mail followed up on Pratt's story, reporter Doron Tyler Antrim found that Mid-Hudson doesn't want to use the funds because they can't be transfered between accounts and, amazingly, because the company would have to pay workers "prevailing" wages on grant-funded projects:

The utility has declined the money after learning it would be unable to transfer any of the funds from one project to another. “We applied for very specific projects,” Reynolds said. He said a move by Time Warner Cable to perform upgrades in the town of Jewett canceled out Mid-Hudson’s plan to do work there and into neighboring Lexington. Mid-Hudson also turned down the money, Reynolds said, because it would have to pay on-site workers more than previously anticipated. Under federal law, workers on public works projects using government money must be paid prevailing wages and benefits.

Neither Pratt nor the Daily Mail could determine whether Mid-Hudson's rejected broadband funds will go back into the public pot to be redistributed, perhaps to a local utility with fewer scruples about paying workers high wages. 

In the meantime, Pratt reports, locals who live in rural Greene and Columbia counties can still get broadband -- by paying about $2,000 to Mid-Hudson to get it installed:

[P]otential customers are being asked to come up with rather large lump sums—in my case $1,870 plus tax—for the privilege of then giving Mid-Hudson about $1,000-$2,000 each year in subscription fees, depending on what services one orders ... Others in my neighborhood have been quoted figures ranging from $2,000 to $2,600 for getting hooked up. Meanwhile, with an estimated 20,000 subscribers, MHC’s annual revenues are variously reported as between $20 and $50 million.