KentuckyWired: A $1.5 Billion Mistake Comes Full Circle

KentuckyWired continues to be problematic for Bluegrass State residents. A dispute has now arisen between the state and its handpicked provider, threatening to figuratively cut the cord for Kentucky broadband users across the state. The irony is hard to miss—after years of delays and billions in spending, Kentuckians are still facing the same connectivity uncertainty that this project was supposed to fix.

WDRB in Louisville recently reported that the Kentucky Communications Network Authority (KCNA) will terminate its contract with Accelecom, the private provider hired to manage the KentuckyWired border-to-border, middle-mile network. KCNA has alleged that Accelecom violated the terms of its agreement.

Accelecom is an offshoot of Macquarie Capital, the Australian-based company that partnered with the state to build KentuckyWired. The company became the exclusive wholesale partner in managing the half of KentuckyWired’s 288 strands of fiber available for commercial use in 2021.

In 2018, then—State Auditor Mike Harmon called KentuckyWired a massive “bait-and- switch on the taxpayers.” This is because the program shifted the burden of construction costs from private partners to the citizens of Kentucky. All in all, the project included 3,200 miles of fiber spanning all of the state’s 120 counties. The project’s total cost exceeded $1.5 billion, with Macquarie and its partners only having to fund about 2 percent of the project.

The project was delayed for years because of a number of reasons, including delayed access to utility poles for the fiber attachments. Harmon pointed out in his audit that this should have been an issue already accounted for in construction plans.

Accelecom then expanded into other southern states after getting the KentuckyWired contract. After its purchase of Georgia Public Web in 2022, Accelecom became a regional network extending from Kentucky through six contiguous states. In hindsight, Kentucky leaders all but handed over the keys to the kingdom, allowing a politically connected company to chase profits across state lines while neglecting its responsibilities at home.

Following the announcement from KCNA, Accelecom sent a letter to customers warning that their broadband services could be shut off.

KCNA did not directly address the nature of the terms that were violated. However, KCNA sent a statement to WDRB saying that the Franklin Circuit Court ordered Accelecom to provide a list of its customers to KCNA. In this way, the authority could provide thirty days’ notice to customers informing them they would be disconnected.

Accelecom CEO Brad Kilbey told WDRB in a statement that KCNA has not conducted its relationship with the company in good faith.

“We intend to prove that KCNA has repeatedly breached its contract with Accelecom, culminating in its unilateral decision to terminate the parties’ agreement and disconnect the customers it was created to serve,” Kilbey said.

John Gill, owner of wireless provider Kentucky Fi, told WDRB that last-mile internet businesses like his are now caught in limbo with the dispute.

“You can’t do this—it’s written into law,” he said. “We’re sorry you had problems with Accelecom, but to us, they’re just a salesman. Salesmen come and go. Get us another one, and we’ll be happy to work with them.”

The Taxpayers Protection Alliance and other groups warned Kentucky leaders that its project would be a waste of taxpayer money. Unfortunately, those warnings were continually ignored. Now, KentuckyWired is, and will continue to be, a virtual albatross around the necks of the state’s residents and taxpayers. Unless lawmakers stop kicking the can and start demanding accountability, KentuckyWired will remain not just a policy blunder, but a cautionary tale in broadband boondoggles.