The company responsible for managing the fiber-optic middle mile broadband network connecting 123 communities in Massachusetts has filed for bankruptcy. KCST USA Inc., formerly Axia NGNetworks USA, filed Wednesday in U.S. Bankruptcy Court in Worcester. In the filing, the company states that it has operated the networks “at a substantial loss from its inception.”
The company contends that the Massachusetts Technology Collaborative, which owns and oversaw the construction of the fiber-optic infrastructure, did not deliver on commitments made in the network operating agreement and related “ramp-up plan,” according to court documents. The collaborative, which oversees the Massachusetts Broadband Institute (MBI), said in a statement it would ensure that service would be uninterrupted to MassBroadband 123 customers during the bankruptcy proceedings.
The middle-mile broadband has approximately 1,200 miles of fiber-optic network in west and north central Massachusetts, covering more than one-third of the state geographically. KCST provides wholesale service to local retail internet service providers that offer broadband services to public safety entities, schools, libraries, medical facilities and town halls, according to MBI. In 2014 and 2015, KCST reported a net loss of more than $3 million each year.
For the seven months ending July 2016, the company reported a loss of nearly $2.4 million. The court filing states that KCST projects approximately $2.9 million in annual revenues, against approximately $5.7 million in annual operating expenses, leaving an operating deficit of approximately $2.8 million. Attorneys for KCST did not immediately return a call for comment Thursday.
KCST and the collaborative entered into a network operator agreement in March 2011, which made KCST responsible for “all aspects of management of the 123 Network, including sales and support services.” The collaborative maintained responsibility for the design and construction of the network. The two companies’ relationship has been fraught since 2014 when the collaborative filed a suit against KCST in July 2014 in Suffolk County Superior Court, for “anticipatory repudiation under the (agreement) and related relief …” according to filings. In a statement, the collaborative called the news of the bankruptcy filing “sudden” but said it was pleased that KCST intended to continue to operate the network while in bankruptcy.
Calling KCST’s financial problems “solely its responsibility,” the statement continued, “Axia/KCST’s obligation to continue operation of the Network has been guaranteed by the large Canadian network operator Axia NetMedia Corporation, which continues to be responsible for ensuring continued uninterrupted service.
“MBI intends to continue to hold both Axia parties accountable under their contracts, and to ensure that MassBroadband 123 will continue to provide quality broadband service to customers across Western and North Central Massachusetts.”
KCST has been able to receive “a postpetition loan” in the amount of $860,000 to fund operations for a 13-week period while it “explores whether a modification to make the network viable can be achieved,” the filing reads.
“Unless such a modification can be achieved, the Debtor will not be able to continue operating the network and will need to reject the network operator agreement.”
A hearing is scheduled for Friday in Springfield.
NYS Senator Phil Boyle (R-C-I, Suffolk County) today announced that a state-awarded project will bring high-speed broadband to the Town of Babylon’s Barrier Beaches.
Bay Shore, NY – March 1, 2017 – New York State Senator Phil Boyle (R-C-I, Suffolk County) today announced that a state-awarded project will bring high-speed broadband to the Town of Babylon’s1 Barrier Beaches. The New NY Broadband Program’s Round II Grants2 recently awarded $867,281 to Altice N.V., and leveraged $216,821 in privately matched funds, for a total public-private investment of just over $1 million to bring Captree Island, Oak Island, Oak Beach, Gilgo Beach3, and West Gilgo Beach into the digital world. Senator Boyle said, “This is a big victory for the Babylon Barrier Island Communities which currently lack wireline connectivity. As Chairman of the Senate’s Committee on Commerce, Economic Development, and Small Business, I know that economic growth in our region is reliant upon an infrastructure system that prioritizes connectivity and broadband accessibility. We have pushed very hard for high-speed broadband for our Barrier Island Communities and I’m thrilled that Altice N.V. has been awarded this grant and will soon install the infrastructure needed to bring high-speed broadband to these unserved areas.”
Providing broadband will enable Town Beach and State Park attendees to access vital services. High-speed broadband will also greatly enhance emergency service communications and response for fire and rescue services that provide coverage to the Barrier Island Beach Communities. In 2015, Governor Cuomo and the Legislature partnered on the creation of a $500 million New NY Broadband Program to provide companies with an economic incentive to extend broadband to unserved and underserved areas of the state. This program is recognized as the largest and most ambitious state investment in broadband in the nation.
Awardees must complete their projects by December 31, 2018.
When we sold our house recently, our buyer asked all the usual questions. How old was the boiler, what were the local schools like and how much did it cost to heat the place? Then he inquired about an issue probably more important to ease of everyday living than any of the above – how fast was the broadband speed? I answered him honestly. I rely on the internet to make my living, and I have two very tech-savvy children, so I pulled out all the stops over the years to make sure that our internet was fast as humanly possible. This involved a byzantine arrangement of cables and receivers and boosters which gave the signal every chance it could get.
Without it, we would have struggled to receive anything fast enough to load up Google in the living room, never mind “live stream” YouTube clips or films. I’m not surprised then to hear that as few as 10 per cent of British people are receiving the broadband speeds advertised by providers such as BT, Sky and TalkTalk. This means that anything up to 15 million households suffer frustratingly slow access – if they can get access at all – to the internet, email, and video-streaming services such as Netflix and the BBC’s iPlayer. It’s all down to the grand claims made in those exciting advertisements which promise the world at our fingertips and deliver a blue circle on our screen in an endless loop instead.
Urged on by complaints from consumer group Which?, the Advertising Standards Authority (ASA) found that companies can promote broadband packages by promising customers download speeds of “up to” 10 or 20 megabits per second (Mbps). However, few of us realise that this claim is allowed even if just 10 per cent of customers can technically achieve this speed. Obviously, most people who sign up to a service offering “up to 10mbps” expect to receive just that. However, the ASA found that a staggering nine out of 10 may not. Would we accept this level of service from anything else? If our washing machine only worked at a tenth of its capacity, or we could watch just 90 per cent of programmes on our televisions, would this be OK? I think not.
That’s why we can’t afford to simply shrug our shoulders and accept rubbish broadband as an inevitable fact of 21st century life. It is absolutely vital. Not just for domestic harmony and happy children, but for conducting all manner of personal administration, and most crucially for the growth of business and commerce. I know people wanting to relocate their operations from London who have vetoed a whole list of provincial towns and villages because they simply can’t get the broadband they need to work efficiently. In our region this is especially important.
Study after study has shown that poor provision of broadband is having a hugely detrimental effect on the economy. There was even a claim by Sheffield Chamber of Commerce earlier this year that broadband speeds in Yorkshire’s second-biggest city were lagging behind those across Europe, offering less than half the speed of villages in Poland and Romania. The reasons behind all of this are as murky and mind-boggling as the (online, of course) instructions for setting up a new router. We’ve been promised ultra-fast broadband around Sheffield for years now, but the roll-out has been beset by delays and funding problems. Super Fast South Yorkshire, the ?28m project to roll out fibre broadband across Sheffield, Barnsley, Doncaster and Rotherham now says it plans to have fibre access to 98 per cent of homes and businesses by 2018/9.
I wish them luck with that. However, meanwhile, those in charge of infrastructure and the internet service providers have a lot of work to do to keep paying customers happy and online. We must not be held as hostages to advertisements which hide the tedious reality in clever words, celebrity voice-overs and glossy promotional campaigns.
Companies which persist must be held to account. The ASA is entirely right to do its worst. However, there is a role, too, for government to play. Not just in ensuring that there is clear chain of Ministerial command in charge of broadband provision across the country, but in taking on the fact that the vast majority of the British population cannot rely 100 per cent on the internet. I know we have a “digital Minister”, Matt Hancock, the Conservative MP for West Suffolk. But poor and patchy provision seems to have been totally overlooked by every Government department which insists on directing individuals towards doing their business in a virtual world. Whether it’s council tax or income tax returns, child benefit claims or television licences, unless you have access to the internet you might as well be living in another galaxy.
This alienates millions of might not even own a laptop or tablet, never mind pay a monthly fortune out to an internet Service Provider. Therefore, I would like those who are driving this online revolution forward to accept that there is a massive disconnect between what they would like to happen and what is actually happening. Or not.