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Thursday, December 3, 2020
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Governor, Senate Continue to Work on Broadband Concerns

Despite senators’ lingering objections over the government’s broadband financing bill, it appears the two sides might still be able to come to a middle ground on the $117 million "middle-mile" project.

The government has pulled in nearly $70 million in federal economic stimulus grant funding to pay for the various components of the project, and the bill — which has twice failed to pass muster with the Senate — authorizes the issuance of up to $42.5 million in gross receipts tax bonds to cover the required local match.

According to members of the governor’s financial team, the plan is to go after $32.2 in short-term financing, which will be repaid through the longer-term bond issue, which hinges on the completion of the government’s audited financials for fiscal year 2009 — the first full year, according to financial team head Nathan Simmonds, after the global economic collapse.

The Senate’s Committee on Economic Development, Technology and Agriculture voted Tuesday night to hold the bill until it can be amended, with some senators saying they were concerned that the bonds would pile on some extra debt the territory might not be able to afford.

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But financial team members have remained confident in the project’s ability to generate enough revenue to offset the debt service payments, which add up to $3.5 million annually. Simmonds said the government hopes to float $38.2 million in bonds but explained that the extra wiggle room in the authorization allows for the possibility of unfavorable conditions on the bond market.

As they became more comfortable with the numbers, however, senators said they were worried about the distribution of anticipated project revenues, and whether they would be used to continue the investment into the project or supplement the General Fund in light of the government’s current financial crisis.

"The good news is that at least a majority of my committee members are in support of what the government is trying to do," Committee Chair Sen. Shawn-Michael Malone said Wednesday. Malone said he and Sen. Carlton "Ital" Dowe are sponsors of amendments coming during another hearing scheduled for April 15.

Along with possibly mandating participation with local providers — who came out Tuesday night to ask that they not be cut out of the process as the government builds its network — senators will also be looking for more inclusion and oversight as the process moves forward, and could set stipulations on how portions of the project’s revenues are used.

"We’re thinking the interest earned on bond proceeds should go back to help the system," Malone said Wednesday.

During Tuesday’s meeting, Simmonds requested that senators go over the amendments with the financial team, since any new proposals could alter the conditions of the grant application, and ultimately affect the government’s federal grant awards.

But Malone seemed optimistic there would be a compromise, and a release from Government House Wednesday night said Gov. John deJongh Jr. continues to work with the senators to address their concerns.

DeJongh announced in the release that the V.I. Next Generation Network (viNGN) — a subsidiary of the Public Finance Authority set up to manage and oversee the build-out and operation of the network — had received the “all clear” from the federal government on an environmental assessment report that would allow the government to start laying cable on St. Thomas and St. Croix.

The broadband project proposes to build a core fiber ring — or "middle-mile" — network that links all four islands, and interconnects by submarine cable to Puerto, Miami and back. According to viNGN President Julito Francis, the network is called "middle-mile" because the government can only sell its bandwidth to providers, which it turn will sell an improved product to local end users at a lower cost.

In order to get going on the cables, however, viNGN needed a "finding of no significant impact" (FONSI) from the federal government, which makes sure there is no impact on the environment or local historical resources.

"Assessment teams sought out to determine specifics on whether this project would have any impact any roadways, existing undersea cables, wetlands, historical landmarks and duct work," deJongh, chair of the viNGN board, explained Wednesday. "After the assessment was completed, the teams held several meetings with the V.I. State Historic Preservation Office which, like the NTIA, signed off on the FONSI for viNGN.”

At a recent viNGN board meeting, Francis said it’s hoped this first phase of construction could begin simultaneously on St. Thomas and St. Croix by May 1.

On St. Croix, the fiber will run from Frederiksted to the Legislature building and go back to the Global Crossing site, where it will tie in with existing V.I. Water and Power Authority conduits. On St. Thomas, the fiber runs from the West Indian Co. Ltd. down to the V.I. Territorial Emergency Management Agency building. From there, new fiber will run down to the University of the Virgin Islands.

And now that the FONSI has come in, deJongh said the next step is getting the financing passed by the Senate.

"This bill, which when approved by the Senate — coupled with the FONSI issued to viNGN — will provide us a clear path to utilize $70 million dollars in funding to implement this state-of-the-art infrastructure that will put the U.S. Virgin Islands at that forefront of the technology corridor in the Caribbean and which will lead to real competition and price relief to our consumers," deJongh said in his statement Wednesday.

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