Stimulus Funds Spur Investment In Alaska's Internet Connectivity

(MoneyWatch)  There has been a great deal of criticism of the waste or weird projects involved with the "Stimulus" bill passed in March by Congress. That does not mean that many of the companies or projects receiving funding are not worthy or good use of the funds. There are times and places where due to conditions such as in Alaska require the Government to step up and fund infrastructure projects. Due to its small population and large area it would be hard for a private company to do some projects and do it at a profit. The Federal and state governments are able to provide the necessary funding to aid in completing projects.

One piece of the American Recovery and Reinvestment Act (ARRA) was money set aside to improve rural and distant parts of the United States internet connectivity. In September we had written about Echostar applying for ARRA funds to support their purchase and launch of satellites to provide more coverage of the U.S. A criticism of this was that many of these types of projects seemed to be to fund planned expansions or programs where traditional capital was not available.

In Alaska Kodiak Kenai Cable Company (KKCC) put together a group to extend a fiber optic cable along the West Coast of the State to reach Northern communities. This Northern Fiber Optic Link project's goal is to link schools, communities, Native American tribes and local government entities with better levels of internet. It is relying on private financing and then a loan from the government as well as some grants. Because of the limited population, the cost involved in building a cable system that can stand the conditions and the cost of installing an undersea cable one hundred percent private financing was not available.

The program seems to illustrate the desires of the Federal Government in passing the ARRA as it will lead directly to several thousand jobs from twenty-three different states. Part of these will be from the high unemployment areas of Alaska such as the Native Americans tribes. The current estimate is about 5,900 jobs of which Texas will have the most at 891. The total cost of the manufacture and installation will be $345 million meaning that each job will require about $29,000 to create.

The undersea cable will be manufactured by Tyco Telecom as the only U.S. company able to do this. The rules of the Federal funds require the use of American manufactured cable and only Tyco is able to do this. The project will require over 22,000 km of cable when it is finally complete. Ideally if the program starts on time it will be finished by the end of 2011.

In today's economic world secure, stable access to high speed internet for schools, businesses and government is almost essential. This project will provide that for Alaska. Of course like all such projects it must be able to do so on schedule and at the most efficient cost.

Map courtesy of the KKCC.