North Florida Herald (Florida) - by Derek Gilliam & Kaitlin Mulhere

When one thinks of rural areas, the images of woods, farms and pick-up trucks might come to mind. Generally, high speed Internet does not.

Yet in February of 2010, residents of rural areas in North Florida, including Gilchrist and Columbia counties, were promised a reliable high speed broadband network within three years, thanks to a $30 million grant that was part of President Barack Obama's stimulus plan.

It was a promise that carried with it many related promises -- economic growth in the form of job creation and new businesses, access to improved health and education facilities, and if nothing else, a chance to be on par in the digital world with urban counterparts.

Fast forward a year-and-a-half and those promises are, if not in jeopardy, then seriously behind schedule.

The grant project to bring high speed Internet to North Florida has been plagued by problems, culminating most recently in the grant money being frozen by the federal government.

At least one board member of the North Florida Broadband Authority, the governmental entity created to complete the project, said that current management is under investigation from the Department of Commerce Office of the Inspector General -- a claim the office would neither confirm nor deny.

According to the baseline schedule of the project, the network should have 3,274 route miles completed. According to the latest project update from current management, zero miles have been completed.

In February of 2010, the broadband authority was awarded $30,142,676 from the National Telecommunications and Information Administration (NTIA) as part of the Broadband Technology Opportunities Program.

From the $30 million, the project has used about $7 million.

At a meeting in July, representatives from the NTIA, the federal agency overseeing the project, said that the project was between six and eight months behind schedule and that the broadband authority was under agency review.

Because of the role Internet plays in everyday life, from businesses instantly being able to communicate internationally to schools using the Internet as a resource for students to complete assignments, rural areas without high speed Internet are being left behind in a digital divide.

If the backbone for broadband Internet access isn't constructed, these areas will continue to lag behind areas where broadband Internet bandwidth is plentiful, said Dustin Jurman, the chief executive officer of Rapid Systems.

Robert Sheets, the general manager of the project and CEO of Government Services Group, which oversees administration of the project, said the broadband network has been the centerpiece of plans to diversify the economy in the region.

"This project is the most critical economic development project this region will see in 20 years," Sheets said.

The North Florida Broadband Authority

The North Florida Broadband Authority (NFBA) is composed of 15 counties and eight cities in an area designated as a Rural Area of Critical Economic Concern. These areas are characterized by high unemployment and poverty levels, a lack of diverse economic development and underperforming schools.

Each local government within the broadband authority has a representative on the Board of Directors. Gilchrist County Commissioner Tommy Langford and the information technology director for Columbia County, Todd Manning, both sit on the Board.

The purpose of the NFBA is to construct the "middle mile" of a high speed Internet network. The middle mile refers to the infrastructure that allows the Internet to flow into an area.

The project's goal is to make a series of towers with the potential to bring high speed Internet to the area. Internet companies can then tap into the network and sell the Internet to individual customers.

"What that grant really is doing is starting to build a broadband utility from scratch, not just deploying the network," Sheets said.

Rapid Systems and GSG

Part of the federal administration's concern with the project stems from allegations of waste and disagreements between Government Services Group (GSG), the company hired to manage the NFBA, and contractors hired to build the network.

Even before the federal government suspended funds, one of the engineering companies contracted to build the network, Rapid Systems, reported not being paid for work completed.

Rapid Systems personnel said non-payment was punishment for disagreements with management about how to deploy the network.

Government Services Group denied that non-payment was punitive actions against any company involved in the project.

Additionally, GSG maintains that these allegations of waste stem from one representative of the NFBA.

At a meeting in April of this year, Christopher Thurow, Bradford County's representative, said GSG was incompetent, among other allegations.

He said that GSG was withholding information from the board, that GSG was intentionally slowing the project down and that GSG had not answered his questions concerning the budget.

Rapid Systems, the engineering company, also had concerns with management revolving around non-payment for work they felt had been completed and GSG's idea of having another engineering company checking Rapid Systems' work.

Jurman, Rapid Systems' CEO, said he felt that an additional engineering company was being brought on to the project only to leverage Rapid Systems. He was inferring that the threat of using another engineering company was being used by GSG to stop Rapid Systems from complaining about GSG.

In the responses to questions posed by NTIA, the federal agency in charge, GSG stated that they would not benefit from slowing down the project as GSG has a fixed rate contract.

Also, GSG denied withholding information and noted that no other representative had made similar complaints.

As to Thurow's statement that GSG had not answered his budget questions, GSG responded that Pat Lien, the GSG project manager, had made numerous trips to Bradford County to meet with Thurow.

Regarding Rapid Systems' issues with non-payment, GSG pointed to inadequate documentation, not following payment procedures, not following terms of contract and demanding immediate payment once invoices had been submitted.

As to GSG providing conflicting information to Rapid Systems, GSG stated that Rapid Systems began work without "formal authorization" from all the required authorities.

Government Services Group also stated in responses to NTIA that Rapids Systems' concern about bringing on another engineer was confusing, and GSG found no basis for their concern.

Government Services Group also stated that these issues were addressed by removing Thurow from his position as the Operations Committee chairman, creating a "special master" to hear any complaints regarding payments to vendors, implementing a non-interference policy to ensure individual board members do not interfere with the project and developing clearer work authorizations for vendors.

Rapid Systems' general contractor contract was terminated at a Sept. 14 board meeting with only Thurow voting not to terminate the contract.

According to Thurow, GSG said at the Sept. 14 meeting that the NTIA wanted Rapid Systems removed from the project.

Thurow asked to have written documentation presented to back up this claim. Thurow said GSG could not present this information.

Thurow said he was contacted by Chris Holt, the NFBA's federal program officer with the NTIA. Holt informed Thurow the NTIA never said they wanted Rapid Systems removed.

Adding to the confusion, a design review was written about Rapid Systems' work for the NFBA. The design review was amended before being presented to the full board at the Sept. 14 regular meeting.

The report noted many deficiencies in Rapid Systems' work.

Jacobs Engineering, whose representative refused to be interviewed for this story, wrote the design review. Jurman, of Rapid Systems, said that the other engineering company was relying on information supplied by GSG and that Rapid Systems was given 24 hours notice of the report and no chance to respond before the report was presented to the Operations Committee on Sept. 8.

After the Sept. 8 Operations Committee meeting, Jurman supplied documentation to Jacobs, and before the Sept. 14 meeting, the design review was amended. Nevertheless, the NFBA voted to end its contract with Rapid Systems.

FRBA and Capital Solutions

In addition to being involved with the NFBA, Government Services Group also was involved in another Broadband Technology and Opportunities Program grant project called the Florida Rural Broadband Alliance (FRBA).

The project received a $23 million grant from the NTIA and was managed by GSG, with Rapid Systems completing the implementation of the network.

However, GSG's contract with FRBA was terminated in June.

Rick Marcum, current chairman of FRBA, said GSG was removed from the project because the board wasn't happy with progress. He said that multiple meetings were canceled and the project was behind schedule.

"We felt like we needed to move in a different direction," he said.

Government Services Group has since filed a lawsuit against FRBA for breach of contract.

Rapid Systems was retained as project engineer.

Marcum also said that FRBA had concerns about the relationship between Capital Solutions Tallahassee and Government Services Group.

Capital Solutions was subcontracted by GSG to oversee the administration of grant money for FRBA. Capital Solutions also was approved by the NFBA to oversee grant compliance.

The broadband alliance expressed concern about a potential conflict of interest between Capital Solutions and GSG.

Lisa Blair is president and CEO of Capital Solutions, but she is also listed as president and CEO of Meridian Community Services Group. Robert Sheets owns 25 percent of that company.

Under Agency Review

Apprehensions with the fact that the project is substantially behind schedule, as well as concerns with the project management, caused the federal agency in charge to begin to monitor the NFBA's progress more closely over the past six months.

At the end of July, the project was placed under agency review and representatives from the NTIA flew down to Florida to investigate the project, including Broadband Technology Opportunities Program Director Tony Wilhelm.

Wilhelm said it is not entirely uncommon for projects using federal grant money to be put under agency review, as there are a lot of rules, requirements and agencies overlooking the projects.

Being under agency review means that the Board's ability to spend grant money is also under review. In order to draw money, the Board has to submit paperwork to the NTIA for approval.

When the Board submitted a funds draw request for $6.8 million, the NTIA only approved $1.6 million of the request and told the Board to resubmit its request for money with only the approved spending.

"NTIA approved prudent expenses under the assumption that allowing a portion of the drawdown would assist NFBA with its ongoing vendor relations," Wilhelm wrote to Board Chairman Stephen Fulford in an e-mail on Aug. 17.

According to that string of e-mails, Fulford did not resubmit the form immediately because he was concerned why the administration had approved some vendors to be paid but not others. He also wanted input from the other members of the Board of Directors.

Yet on Aug. 18 - just one day later -- the NTIA sent a new letter to Fulford and the Board in the form of a Corrective Action Plan that outlined the actions the NFBA Board of Directors needed to take in order to correct the project's deficiencies.

Most importantly, the NTIA told the Board that access to the project's grant money would be suspended until the Board submitted a response outlining the Board's intended plans to get the project back on schedule.

On Sept. 7, GSG, the company managing the broadband authority, submitted a response on behalf of the Board of Directors.

As of Sept. 9, the Board was waiting for a response from the NTIA.

"NFBA has experienced a number of external and internal delays on its project and, as a result, NTIA has serious concerns regarding the project's long-term viability and, in the short-term, its ability to implement and deploy the proposed project during the grant award period," the NTIA letter that accompanied the Corrective Action Plan stated.

Behind Schedule

The delays referred to by the NTIA have caused the NFBA project to fall eight months behind its baseline projections - projections that staff members created at the end of 2009 when applying for the grant.

In response to a questionnaire from the federal administration, GSG explained that some of the delay can be attributed to the fact that the baseline plan was "developed based on a different design by planners that are no longer associated with the project."

In addition, GSG wrote that the project is only one month behind NFBA's Master Plan - a plan that was created by GSG.

Staff from GSG asserted that the project was still on schedule to begin making revenue in November of this year, as outlined in the business model, although that could be in jeopardy due to the grant money's current suspended status.

While there were a number of factors that caused the project to fall behind schedule, three major factors stand out, Sheets said.

One, the Board had to replace its original project engineer in July of 2010 because the firm was not able to provide the staff necessary to complete the required 100 tower site assessments. Rapid Systems, the current project engineer, was placed under contract a few weeks later, Sheets said.

Rapid Systems had to redesign the network, delaying the project about three months, according the questionnaire.

The project lost another three months when GSG began working with the departments of Commerce and Labor to establish legal wages under the Davis-Bacon Act. The act states that all laborers employed on a federally funded project must be paid no less than what other workers on similar projects in that area are paid.

Project management had to secure separate wage determinations for each of its 15 member counties. The staff also had challenges creating new job classifications for telecommunications jobs that did not fall under other categories.

Without the wage decisions, the Board could not even advertise for construction and contracting jobs.

Finally, the project fell about five months behind while it waited for the federal agency overseeing the grant to approve the Board's request for a waiver for operating leases. The Board could make lease agreements with tower sites, but until the NTIA granted the waiver, the broadband authority could not pay the tower companies and thus, could not get access to the sites to begin work.

Still, the grant's current status threatens to delay the project even further.

"People are still working," Sheets said on Aug. 31 "But this is going to basically bring us to a halt."

Sheets said the project has been slowed for at least 6 weeks; first while the NTIA was reviewing the project and requesting answers and documents to help in the examination, and now with the money on hold.

"It makes one of their concerns even more difficult to respond to and that's ‘what are you doing to meet the requirements of the grant in terms of deployment and sustainability,'" Sheets said.

In an e-mail to representatives of the NTIA on Aug. 16, Fulford warned the NTIA that rejecting some of the Board's requests for spending would stop deployment, hurt the Board's schedule and damage the network's market credibility.

"These delays are directly preventing us from meeting the milestones that the NTIA just chastised us for during your visit," Fulford wrote. "These delays cannot be blamed on the NFBA; we have responded immediately to every request that we have received..."

Regardless of who or what lies behind the delays, Sheets said it is still the NFBA and GSG's responsibility to meet all the same deadlines.

"At the end of the day, it's the grantee that's responsible for getting the job done, and we take that responsibility seriously."

What's next for the NFBA?

As the NFBA waits for the NTIA's response to the Corrective Action Plan, the Board and staff members are looking forward to moving on with the project.

Once access to the grant money is restored, there are plans to spend millions of dollars in a few months to get the network back on schedule.

Most importantly, GSG is concerned with maintaining positive relationships with customers who are already waiting to be connected to the network, Sheets said, referring to about 30 facilities that have written letters of support for the project.

Two years ago, when this project was just getting started, the goal was to create a middle mile broadband network to cover 9,100 square miles. Within those miles sit more than 150,000 households, 25,000 businesses and 1,500 critical facilities including hospitals and police and fire stations.

Regardless of the delays, drama and requirements of the NTIA, the project's end goal, and the benefits it will bring to the people of North Florida, remain on the minds of those involved with the project.

At the July 27 board meeting, Walter McKenzie, the board representative from White Springs, reiterated how much he wants to see this network successfully built and operated.

"We need this like we need oxygen to survive," he said.

Jeff Hendry, executive director of the North Florida Economic Development Partnership, said the broadband network will attract new businesses to the area and allow already existing businesses to expand.

"Businesses that can't communicate with their headquarter office or coordinate shipping or payment, it's a deal-breaker in many instances," he said. "If a business is looking at our area, you've got to have a world class telecommunications structure."

Equally important, the network will improve quality of life for those living in the area through better access to education and healthcare, Hendry said.

"I believe this is the single most important infrastructure that's going to be brought to this area since rural electricity in the 1930s."

How does project plan to bring high speed Internet to the rural areas?

The network that the North Florida Broadband Authority is constructing will be beamed through the air in a high speed data stream. The data will be carried on a microwave spectrum licensed by the Federal Communications Commission.

The easiest way to think of a microwave spectrum is to think of radio. But unlike radio, microwave spectrums don't spread out over many miles. The microwaves act more like fiber optic cables carrying large amounts of information along a path.

The NFBA's network will be beamed through the air from towers in North Florida.

The towers will create a ring around the 15 counties in the NFBA.

Each tower is a point on a ring that allows the NFBA to interconnect to its customers.

Internet will be carried through the air above the heads of people living in the NFBA's service area, but the network will not be able to connect to individual homes without another company finishing off the "last mile" of the network.

A last mile network will require private companies to build out the network to residential and commercial areas.

The NFBA will then sell broadband Internet bandwidth to these private companies - essentially creating what will act like a utility.

The NFBA was awarded the grant money to build the network and link that network to anchor institutions such as police departments, hospitals, schools and local governments.

When the network is complete, it will have the capacity to produce speeds of up to 1 gigabyte per second.

Dustin Jurman, the chief executive officer of Rapid Systems, said these speeds are as fast as areas like Orlando and Tampa. The main reason the speeds are comparable to the speeds seen in those cites is because the network will be connected to Orlando and Tampa through what the high speed Internet industry calls long haul fiber.

Long haul fiber runs up both coasts of Florida and through Tampa and Orlando. Jurman described long haul fiber as the Amazon River of the Internet. So much data is being pushed along that network that tapping into that stream of data will push all other data at high speeds.

Once the last mile is constructed, the rural areas of North Florida will have the option to connect to high speed Internet, not only providing the people who already live in the area with faster Internet, but hopefully attracting businesses to the area.

The Key Players

National Telecommunications and Information Administration

The National Telecommunications and Information Administration (NTIA), an agency within the Department of Commerce, advises the president on the telecommunications industry and policies pertaining to the topic.

In 2009, the NTIA received $4.7 billion from the American Recovery and Reinvestment Act to support the deployment of broadband infrastructure and adoption of broadband services, as well as to keep track of broadband capability and availability throughout the country.

Enter the Broadband Technology Opportunities Program (BTOP), which provided grants to some 230 projects nationwide to either develop broadband infrastructure or improve Internet access.

In addition to increasing access to broadband technologies, the BTOP grants will foster economic growth and job creation. A spokesperson for the NTIA said the broadband grants program is on track, and the administration is pleased with the overall progress of the program.

Government Services Group, Inc.

Robert Sheets founded Government Services Group in 1997 with only a secretary and one co-worker. In 14 years, the group has grown a bit.

The company has worked with more than 160 clients in Florida from nearly every county in areas ranging from neighborhood improvements to transportation to public works and utilities.

Sheets, who is the CEO of GSG, said he has spent all his life working with local government. Before creating GSG, he spent 18 years working with the water, sewer and finance departments within local governments.

His company aims to provide services to local governments in three areas: shrinking revenue gaps, finding funding alternatives and helping localities manage services and utilities that they aren't running as well as they could.

"We find improvements that can be made that are consistent with that county's growth plans," Sheets said.

In 1999, GSG began work with what is still one of its largest clients - the Florida Governmental Utility Authority. The authority is a single purpose governmental body, created through interlocal agreements, that owns and operates water and sewage utility services for several counties in South Florida.

Government Services Group functions as a county manager for the authority but also oversees the system management, financial administration, capital program management and inspection services.

The authority provides water and wastewater for more than 80,000 people and recently signed a 50-year contract with the federal government to provide water for the MacDill Air Force Base in Tampa.

North Florida Economic Development Partnership

The North Florida Economic Development Partnership (NFEDP) is a joint venture of public and private entities intended to plan and oversee economic development programs in North Central Florida.

The partnership is comprised of local economic developers, county commissioners, workforce development boards, regional planning councils and private businesses.

The NFEDP was created after the 14-county region was named a Rural Area of Critical Economic Concern by former Governor Jeb Bush in 2003. According to the NFEDP Website, six members of the NFBA Board of Directors also represent their respective counties for the NFEDP.

In 2009, when the partnership began hearing whispers about stimulus money to improve broadband in underserved areas, the Board of Directors discussed at length what would give them the best opportunity to secure a grant for North Florida.

The NFEDP was intrigued by the idea of broadband service managed by a government utility authority.

Jeff Hendry, executive director of the NFEDP, had worked with the Florida Governmental Utility Authority before and thought it ran efficiently. He contacted GSG to ask if the model that the company developed with the Florida Governmental Utility Authority could be replicated for broadband.

After GSG beat out 106 consulting firms to win the job, the company worked on a feasibility study for broadband services in North Florida, as well as put together the grant application.

Most impressively, the NFEDP and GSG reached out to local governments in the area and worked together to create the NFBA through interlocal agreements in about 20 days.

The NFEDP is still actively involved in the NFBA project in the form of a $9,000 per month contract with the Board to provide community outreach for the network.

Rapid Systems

Rapid Systems, one of the engineering companies contracted to build the NFBA's high speed Internet network, is a leading regional Internet service provider, according to a case study conducted by Motorola.

Rapid Systems' headquarters is located in Tampa, which is a hotspot for wireless broadband Internet.

The company also was contracted to build another rural broadband network for another Broadband Technology Opportunities Program grant project.

The Florida Rural Broadband Alliance is a $23 million grant project to bring high speed internet to parts of the panhandle and south central Florida.

Before working on the FRBA and NFBA networks, Rapid System had success building a high speed Internet network in Hardee County.

Rapid Systems also has worked with NASA, the National Oceanic and Atmospheric Administration, and the National Undersea Research Center.