A federal bailout project to build broadband needs a bailout of its own

The announcement came out early on July 17. One of Boulder's (CO) entrepreneurial bright stars, the Zayo Group, had signed an agreement to help operate and provide technical support to a controversial, federally funded broadband network charged with bringing high-speed access to Colorado's rural schools, hospitals and libraries. Gov. John Hickenlooper (D-CO), in that same announcement, heralded the deal, saying the fast-growing Zayo, which had raised hundreds of millions in its first public offering just months earlier, would have the capital and expertise needed to help EAGLE-Net Alliance complete its network and bring service thousands of Coloradans who still live far on the other side of the digital divide. What no one addressed that day was a lawsuit, filed against EAGLE-Net just two days earlier, by the company Zayo was preparing to replace.

The suit alleges that EAGLE-Net failed to pay its former operator, Austin (TX)-based Affiniti Inc., and that it had also failed to inform Affiniti of several problems with EAGLE-Net's operations prior to Affiniti's own takeover of the network just 18 months earlier. It's unclear whether the lawsuit will affect Zayo's agreement with EAGLE-Net. Zayo and EAGLE-Net officials declined to comment on the suit. In some ways the Zayo announcement was deja vu. Affiniti came to Colorado in 2013 to assume EAGLE-Net's operations. EAGLE-Net's $100.6 million grant from the federal government had been suspended. The National Telecommunications Information Administration (NTIA), which oversees the grant program, had launched an audit of EAGLE-Net, and found compliance problems and issues with reporting and documentation. But despite those issues, and with the help of Affiniti, it was allowed it to resume building its network.