Could a 20-year state contract sink efforts to close Pennsylvania’s digital divide?

In 2019, the Commonwealth entered into a 20-year contract with an Ohio-based company to help expand access to broadband in underserved areas of Pennsylvania. Although this contract was originally billed as a way to help deploy high-speed internet throughout the state, it now appears that this contract is more of an albatross weighing down our efforts to close the digital divide – while lining the pockets of out-of-state interests with money that rightly belongs to Pennsylvania taxpayers.


A heavily redacted 585-page contract spells out the terms between the Pennsylvania Department of General Services (DGS) and Agile Network Builders out of Canton, Ohio. Agile’s contract with the state allows them to solicit interest among broadband companies in state-owned properties, like the towers no longer in use by the State Police.


The problem is that most broadband providers do not see a large enough customer base to make these investments worthwhile. Instead of exploring other avenues to help rural communities, the Wolf Administration allowed Agile to shift its focus to marketing state-owned assets in more populated (and profitable) areas throughout the Commonwealth.


When we initially heard about this contract during a Senate Communications and Technology Committee public hearing on September 23, 2019, DGS Secretary Topper confirmed that the contract does not have specific wording to deploy broadband to areas in need.


At that hearing, we discovered that the state is estimated to gain $5 million per year through this contract, totaling up to $100 million throughout the 20-year contract. What is not known is exactly how much this Ohio-based firm is set to gain.


As the middleman in that process, Agile stands to gain potentially tens of millions of dollars on the deal without ever bringing high-speed access to a single home in rural Pennsylvania. How on earth would anyone ever think this contract was a good idea for the people of our Commonwealth?


More troubling is the fact that we were told that there were three bids on this contract, but after requesting more information, we have only seen one – Agile’s.


Forest County Commissioners recently voiced their frustrations about how the state is hindering efforts to deploy broadband to rural households. The Wolf Administration was seeking to charge the county upwards of $350 per month per pole in order to deploy broadband using a handful of abandoned State Police towers. That money would flow directly out of the pockets of local taxpayers, and directly to the state and potentially Agile.  


The exorbitant fees coupled with outdated regulations make it nearly impossible for Forest County to invest federal Coronavirus Aid, Recovery and Economic Security (CARES) funding to deploy high-speed internet throughout the community by the end of the year, when the funding goes back to the state and likely disappears forever.


Forest County and York County are in a similar predicament. CARES funding for broadband deployment must be invested by the end of the year. Adding new hurdles and hoops from state agencies is counter-productive to a bipartisan effort to close the digital divide.


Furthermore, the contract is standing in the way of bipartisan efforts to allow electric cooperatives to utilize existing utility poles to place fiber-optic lines. Although we have legislation pending final consideration in the Senate to accomplish this goal (House Bill 2438), officials with the governor’s office and DGS are seeking a carveout for the state so these easements do not apply to state land – the same land Agile is marketing for profit.


Keep in mind that the state owns over 12 percent of all land in the Commonwealth, which is the fifth-highest percentage in the nation. Most of the state-owned land includes areas lacking access to high-speed internet and would benefit from House Bill 2438.


In fact, we believe legislation should be advanced to require any revenue raised from the Agile contract to go directly into a dedicated broadband deployment fund, as suggested in Senator Wayne Langerholc’s Senate Bill 835.


Our focus remains on ensuring our constituents can learn, work and receive critical services with the benefit of reliable high-speed internet, regardless of their ZIP code – not growing the profits of an out-of-state middleman.


Senator Kristin Phillips-Hill, a Republican from York County, chairs the Senate Communications and Technology Committee. Senator Scott Hutchinson, a Republican from Venango County, serves as the Vice Chair of the Senate Communications and Technology Committee.