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Dispute over overlapping broadband grants is now heading for court

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Dispute over overlapping broadband grants is now heading for court

Jun 11, 2024 | 6:45 am ET
By Paul Hammel
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Dispute over overlapping broadband grants is now heading for court
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(John Lamb/Getty Images)

LINCOLN — A dispute over overlapping grants to expand broadband — amid a multimillion-dollar effort to bring high-speed internet to every corner of Nebraska — is headed to court.

The internet provider Pinpoint Communications has sued the Gage County Board for its recent decision to deny the company a permit to lay fiber optic cable. 

The board had rejected a permit May 1 for the company on the grounds that it was a waste of taxpayer funds to provide a government grant to an area that had already received government funds to  deploy broadband service.

The lawsuit, filed May 30 in Gage County District Court, alleges that the county board overstepped its authority in denying the utility permit — a permit that is typically approved without discussion — and “invaded the jurisdiction” of the Nebraska Public Service Commission, which has jurisdiction over telecommunications issues. 

The “overlap” of government funding involves 11 residences just northeast of Beatrice, and perhaps $200,000 or so in grants to serve that area.

Another provider hired

Gage County had hired another internet provider, NextLink, to extend broadband to 95 unserved and underserved sites in rural Gage County as part of an innovative county program. The southeast Nebraska county was utilizing $4 million of its federal American Rescue Plan Act to pay for the work.

Meanwhile, Pinpoint had obtained a $535,000 grant via the state’s Broadband Bridge program that was approved by the Public Service Commission.

Ironically, the lawsuit by Pinpoint was filed one day after the company won approval from the Gage County Board for a pared-back right-of-way permit to lay cable except in the area of the 11 contested sites.

The lawsuit is the latest salvo in an ongoing flap over a so-called “overbuild” of broadband internet.

The state and federal governments have embarked on aggressive programs to expand high-speed internet services — fast enough to support business growth — to rural areas that have previously lacked such service or have slow internet speeds. 

For instance, the federal BEAD program will deploy $405 million to the state to pay internet providers to expand broadband to rural areas where it doesn’t make financial sense, without the grant money, to serve. The state received $80 million in ARPA funds for high-speed internet expansion, and the Broadband Bridge Act, approved by the State Legislature, has doled out about $70 million over the past three years. 

Emily Haxby, a member of the Gage County Board who had led the broadband project there, tried unsuccessfully to persuade the PSC to avoid the overlapping grants. Later, the PSC denied a formal challenge to the duplicative grant, ruling it was filed too late, missing a deadline.

Seeking clarification of county’s authority

Tom Shoemaker, president of Pinpoint, said Gage County shouldn’t be allowed to reject a right-of-way permit just because of “unhappiness” with the PSC.

“Their role is just to approve and deny these permits based on public use … not on their unhappiness with the PSC process,” Shoemaker said. 

His company sued, he said, because there needs to be clarification of a county board’s authority as more grants are awarded for broadband deployment. The BEAD grants are expected to be awarded later this year.

In its lawsuit, Pinpoint maintained that the Gage County Board lacks the power to reject such a right-of-way permit and that Pinpoint was treated differently than past applicants for such permit.

“(The county board) acted contrary to the public good because they denied at least 11 households access to broadband coverage,” states the Pinpoint lawsuit, filed by Lincoln attorney Sheila Bentzen.

Haxby, when contacted, said she could not comment about a pending lawsuit. Gage County Attorney Roger Harris did not return a message.

In rejecting the Pinpoint application, Haxby and other members of the board said it was within the county’s jurisdiction to decide who should and shouldn’t utilize county right of way. 

Besides avoiding a funding overlap, which the grants don’t allow, board members said that the county’s project would get broadband service to the 11 locations much less expensively than the Pinpoint project, and that the money saved could be used elsewhere in the state.

High-speed internet cables, via the county’s project, have reportedly already been laid to the 11 contested locations.