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Time Warner-Charter merger delays Niagara-Orleans broadband project

LOCKPORT – The merger of two big telecommunications companies is delaying the efforts of local officials to start a rural broadband program in Niagara and Orleans counties.

The effort by the Niagara-Orleans Regional Alliance has to wait until Charter Communications, which is taking over Time Warner Cable, lets Albany know where it will install new state-of-the-art cable.

As a condition of state approval of the $78 billion merger, Charter had to agree to make service available to 145,000 homes in New York State that don’t already have it. That would bring digital cable TV and high-speed Internet to new customers, in line with Gov. Andrew M. Cuomo’s efforts to try to provide broadband everywhere in New York.

The leaders of the Niagara-Orleans effort, Niagara County Legislator David E. Godfrey of Wilson and Orleans County Legislator Lynne M. Johnson of Yates, found out that the state broadband office, which is accepting applications for funding for local broadband initiatives, was refusing for the time being to take grant applications from any area where Time Warner was a major player in the market.

“It absolutely makes sense,” Johnson said. “You don’t want to have funding released where all of a sudden Time Warner is building out.”

Godfrey said the deadline for the first round of funding was April 15, but the state was giving Charter 45 days from the completion of the merger with Time Warner to provide a list of the 145,000 addresses statewide where new service would be installed.

“That’s a business decision we’re not part of,” Godfrey said.

Charter spokesman Justin M. Venech said, “Our transaction with Time Warner Cable is still pending approval, and we do not have those details to share at this time.”

Venech said the company has four years from the close of the merger to complete the network expansion to the 145,000 homes.

Johnson said, “If it’s not in Orleans or Niagara County, we’ll be able to apply for Phase 2 of the funding, and that, I’ve been told by the broadband office, is looking at a June-July window. If that doesn’t work out for some reason, there will be a third and final round of grants in December or January.

“It’s frustrating at times because of the delays, but we promised our taxpayers we’d fight this fight until the end, and both of us are doing just that,” Johnson said.

The Niagara-Orleans program wants to seek grants through the state’s regional economic development councils. Godfrey said the state is making $5 million available in each region, which gives the alliance two chances – a chance at $10 million, in effect – because Niagara County is in the Western New York region while Orleans is part of the Finger Lakes region.

“We’re applying for all of it,” Godfrey said. But the funding request is complicated and competitive.

“It’s a reverse auction. You have to offer the most houses for the least amount of money,” he said.

The regional alliance has an agreement with Seneca Solutions, owned by the Seneca Nation of Indians, to provide the broadband service, using hardware from Resolute Partners, a Connecticut information technology company. Both county legislatures approved the contract last summer.

The plan was to use wireless technology to provide broadband service by placing antennas on structures more than 40 feet tall. The counties had compiled a list of such structures in a survey that also determined how many homes without broadband access there were in the two counties. In all, there were about 4,000 such households.

Godfrey said, “We only counted those who had absolutely no service. It’s probably four or five times that many if you count those that don’t meet the governor’s standard of 25 megawatts per second.”

Godfrey has said that Time Warner had long exaggerated the reach of its broadband service by claiming an entire census block had service if any customer within the block had such access. The reality was that the necessary cable often wasn’t laid throughout the census tract, so potential customers had no broadband access.

Godfrey said the goal remains making broadband available everywhere in both counties.

“Whether it’s Time Warner, whether it’s Charter, whether it’s a blended solution with the Senecas, our goal is to make sure that Niagara and Orleans counties are in the world of economic enabling to level the playing field with all the other areas that have that service,” Godfrey said.

Both counties also have Verizon as a possible broadband supplier.

Johnson said the Time Warner-Charter situation is just a delay, not an insurmountable obstacle, because the Niagara-Orleans effort has been a trendsetter.

She said, “We set the footprint for the data collections, and they’ve used that across the state. They’re very well aware of us. We’ve been very vocal in support of Western New York, and I believe they will take care of us.

“When, is the million-dollar question.”

The two-county initiative also has drawn the attention of the Kennedy School of Government at Harvard University, which has invited the alliance to compete for a $100,000 cash prize in its “Innovations in American Government” contest.

Niagara and Orleans have until Friday to apply for the prize. Lesser prizes will be presented to local governments that reach the finals of the competition, operated by the Kennedy School’s Ash Center for Democratic Governance and Innovation. “It recognizes programs that demonstrate creative and effective government at its best,” the application notice says.

Johnson said $100,000 would more than cover the expenses the counties have incurred in the broadband effort, including the detailed service survey. “There would be a net-zero impact on our taxpayers, which is what we promised all along,” she said.