EAGLE-Net Operator Agreement Appropriate Next Step to Connect Colorado Schools, CEO Says
EAGLE-Net was transparent in its dealings with NTIA to choose Affiniti as its network operator, CEO Mike Ryan told the Colorado Legislative Audit Committee Monday. EAGLE-Net had told the committee in September that it was in the process of finding an operator. Affiniti met EAGLE-Net’s four objectives in that process: To provide day-to-day management; long-term sustainability; an open access, middle-mile broadband buildout to schools; and to invest $8 million in the company’s mission, said Ryan. Affiniti serves rural and underserved markets in education, healthcare, E-911 and government agencies, said Ryan. “Affiniti specializes in building and managing proprietary networks, and they are one of the largest WAN operators serving K-12 education in the country.”
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NTIA has been “fully aware” of EAGLE-Net’s selection process of Affiniti as its network operator, said Ryan in response to a question from state Sen. Steve King (R). “NTIA has had total transparency in this process,” said Ryan. Rep. Cory Gardner, R-Colo., submitted a letter to NTIA Oct. 29 questioning EAGLE-Net’s choice of Affiniti as its operator (CD Nov 1 p8). Ryan said NTIA is reviewing the letter. “I can’t speak for them,” said Ryan. EAGLE-Net General Counsel Ken Fellman said NTIA took Affiniti’s finances into consideration. “While they have not publicly responded, I know that this is an issue that they had before, and they appointed Affiniti as the operator,” he said.
The remaining $7.7 million from NTIA’s Broadband Technology Opportunities Program funds for the project will continue to be managed by EAGLE-Net, said Ryan. “We created an environment where EAGLE-Net employees will now become Affiniti employees, so the network stays with EAGLE-Net.” Under the agreement, Affiniti will pay $40,000 per month in EAGLE-Net operating expenses for 22 months, and $30,000 per month thereafter (http://bit.ly/1d764LP). Affiniti will provide $15 million over five years to connect schools to the Internet, said the operating agreement. More than $3.5 million will be used to connect underserved schools to EAGLE-Net’s network and more than $8 million will be used to expand the network to “success-based schools” along Interstate 25 over a five-year period. No more than $3.5 million will be used to connect the Silverton, Colo., school district by Dec. 31, 2014. The origins of the $15 million is “not EAGLE-Net’s concern,” and $7.7 million provided by BTOP will continue to be “fully transparent,” said Fellman. Affiniti’s parent company, Global Leveraged Capital, has “millions of dollars, so they do have access to it,” said Ryan.
EAGLE-Net has provided more than 150 documents and 100 MB of information on EAGLE-Net to the U.S. Department of Commerce Office of Inspector General, said Ryan. “OIG has indicated that their report will be out in December, and we don’t expect any surprises.”
EAGLE-Net’s agreement with Affiniti provides a “great environment” to face the challenge of connecting all Colorado schools with broadband, said Ryan. “For the first time, you have a group thinking about how to build out to all school districts in the state,” he said. “We will continue to work with rural providers and local telcos to get this project complete.” With a new agreement with Affiniti, EAGLE-Net can also continue to keep prices down, said Ryan. “We want to make sure that we are the lowest cost providers for schools.”