June 10, 2010, appeared in The Times of NW Indiana
by Josh Lederman

CHICAGO — Illinois received just one of 68 awards of federal money to extend high-speed internet to rural areas in the first round of funding decisions, according to a report released Wednesday. The award provides $22.8 million in grants and loans to extend fiber-optic networking through 24 southern Illinois counties, including Jackson, Williamson and Marion.

The U.S. Department of Agriculture has completed the first of two rounds of project approvals for the $2.5 billion appropriated by the Recovery Act, also known as the stimulus package, for expanding rural access to broadband internet. Wednesday’s report shows that The Rural Utilities Service’s Broadband Initiatives Program has so far awarded $1.068 billion to projects in 31 states and American Samoa, according to the report.

Source: U.S. Department of Agriculture

In Illinois, applicant Norlight Telecommunications, Inc. was awarded an $8.54 million loan and $14.2 million grant to provide more than 1600 miles of cable to deliver high-speed Ethernet services and build up “backbone” infrastructure capabilities to backhaul data to rural areas. An additional $5.7 million will be contributed by Norlight, according to the award summary.

“We would like it that we would have the same services that people in Naperville take for granted–at the same price,” said Christopher Merrett, director of Illinois Institute for Rural Affairs in Macomb. Merrett said the situation is parallel to that of electricity, where it costs more per person to bring service to less densely populated areas.

Yet the project, called the Rural High-Speed Ethernet Network – Southern Illinois, may have been put on hold by Norlight, according to sources familiar with the award who asked not to be named.

Representatives from Norlight did not respond to repeated attempts for comment. The company’s application for the project stated that Norlight would not draw on any federal funds “until sufficient Service Agreement customer commitments are received to reach necessary penetration levels.” Their application claimed the project would create 74,890 hours of work for technicians and contribute to the economic development of the 24-county area that includes the towns of Carbondale, Cairo and Mt. Vernon.

A spokesman for U.S. Rep. Jerry Costello, D-Belleville, who had touted the award when it was announced, said he had not heard anything about the funds being turned back. A coordinator for the Rural Utilities Service, a division of the U.S. Department of Agriculture, said that an award had been made and no further information was available, but that funds can be re-pooled for other projects at its discretion.

While Illinois’ share of the national pot was modest – the average award size was $33.3 million – the state fared better than many others. Nineteen states received no funding at all and two did not receive independent awards but will benefit from interstate projects.

The Illinois application for funding was championed by Connect SI, a partnership of network providers, local governments and healthcare agencies that promote increased broadband infrastructure for southern Illinois. The group performed utilization mapping of underserved areas that Norlight used in drafting their application, said Connect SI Executive Director Kathy Lively.

Southern Illinois also submitted applications for projects under the second round of funding. The application process for the second round closed Tuesday according to the USDA, and announcements will be made no earlier than July. The government must assign all the funds by September 30.

Meanwhile, Illinois companies are also vying for grants and loans from a separate broadband infrastructure project being administered by the Department of Commerce. That program involves $4.7 billion of Recovery Act funds.