Taking hours to download a video or read a book online could become a thing of the past if the V.I. government succeeds in pulling in the federal grant it needs to begin building a comprehensive broadband network that will significantly enhance internet speed throughout the territory.
The Public Finance Authority took the first step Monday by approving a resolution authorizing the issuance of up to $20 million in new bonds to help finance the project. The government will be applying for a federal grant to cover most of the project costs — estimated at $55 to $60 million — but has to provide a 20- to 30-percent match, PFA head Julito Francis explained during a PFA board meeting on St. Thomas.
It doesn’t have to be all in cash, Francis added, saying that the bonds — backed by either gross receipts taxes or local rum revenues and subject to final approval by the Legislature — will be supplemented with in-kind services from the V.I. Water and Power Authority, which already has miles of fiber optic cable in the air and on the ground in both districts that can be used for the network.
When contacted Monday, WAPA Executive Director Hugo Hodge Jr. said the authority already has fiber optic cable in its above-ground utility lines, which helps retrieve data from its field equipment, and underground conduits — or pipes — that span about 15 miles on St. Croix and 10 miles on St. Thomas.
There are a few variables, however. The grant is competitive, so more than one entity will be vying for the same pool of funds. And at this point, there’s no way of knowing how much value the federal government will place on WAPA’s equipment, so to play it safe, the PFA is going after a 30-percent match, using the $20 million to cover the cost of issuing the bonds, debt service and working capital for construction of the network.
The PFA, through the Office of Economic Opportunity, will also be filing its application late this week or early next week, before the "onslaught" of other proposals start going out, Francis added.
The benefits of the project — which will create a fiber-optic ring through the territory, Puerto Rico and Miami — are tremendous, creating opportunities for expansion of the network to libraries, hospitals and government agencies, along with local organizations, such as the Boys and Girls Club, which will get money for training and new computers through the grant.
Local internet providers will also be able to buy access to the network and sell it back to their customers. For the home user, that means a service speed of10 megabits per second — or in layman’s terms, being able to download a book in the blink of an eye, Francis said. And when the network is complete, the territory will be the third-highest connection point in the Western Hemisphere, according to some of the project statistics.
Finance Commissioner Angel Dawson described the project, dubbed the V.I. Next Generation Network, as the "onramp to the (information) super highway" — an onramp that Francis said later has received much support from the local community.
Letters have flowed in from the Chamber of Commerce, Hotel Association members and several private businesses, Francis explained after the meeting.
"I mean, this will put us on par with the rest of the world," he added, saying that a recent broadband mapping initiative — for which the territory recently received a little less than $1.3 million in economic stimulus funds — revealed that the territory’s current bandwidth is less than half the national average.
Federal funds for the project have been made available through the American Recovery and Reinvestment Act under the U.S Commerce Department’s National Telecommunication and Information Administration’s Broadband Technology Opportunities Program.
In other news, PFA board members granted the V.I. Territorial Emergency Management Agency (VITEMA) a reprieve on an outstanding $517,000 cash advance that officials said Monday is needed to pay vendors working on the E-911 project.
About a year ago, PFA advanced VITEMA about $693,000 for the project from its discretionary fund, with the understanding that the money would be repaid through a future bond issue. Since then, VITEMA has received about $9 million for the project — including $8 million from a recent $87 million bond issue, for which VITEMA racked up about $384,000 in associated service costs.
That amount was never factored into the project’s budget — nor was about $190,000 in cost overruns, which VITEMA officials said prevented them from repaying the advance. At this point, giving back the $517,000 would put the project in deficit and take away money from vendors that have been waiting to be paid, Paul Arnold Jr. — project manager on the E-911 system — told PFA board members Monday.
While board members pondered the request, PFA board chairman Gov. John deJongh Jr. pointed out that VITEMA didn’t know it had to deduct the cost of issuing the bonds.
"If we don’t do it this way, we have no choice but to go to the Office of Management and Budget with a request for vendor payments," said deJongh, who has — along with members of his financial team — repeatedly discussed the government’s current cash-strapped financial position.
"Clearly we can’t have vendors out there who aren’t being paid," deJongh added before the board unanimously voted to "forgive" VITEMA’s loan.
Board members present during Monday’s meeting were Dawson, deJongh, OMB Director Debra Gottlieb and Pablo O’Neill.
Board members Roy D. Jackson and Keith O’Neale Jr. were absent.
