Indiana strikes deal to lease out broadband infrastructure, expand rural internet access

Indiana struck a provisional deal with the private sector to lease out its broadband infrastructure in an effort to expand internet access in rural areas and bring in roughly $260 million in revenue for the state over the next 50 years.

Gov. Mike Pence announced the pending agreement with Ohio-based Agile Networks Tuesday, sketching out the terms of the deal to give the company access to the state’s communications infrastructure (including cell towers) over the next few decades.

“Indiana is a national leader in partnerships that deliver sound financial returns and long-term benefits to Hoosiers,” Pence said in a statement. “This agreement, if approved, will put underused assets into full play, enhance Indiana’s communication capabilities throughout the state, and fund the state’s bicentennial projects.”

Indeed, though the Indiana Finance Authority approved the deal Tuesday, the Legislature’s budget committee will also need to review the deal before it becomes official.

Yet, should it clear those hurdles, Agile would pay Indiana $50 million off the bat to manage and operate its broadband infrastructure, then pay roughly an additional $36 million to get access to the equipment over the next 25 years. The company would then have the option of renewing the deal for another 25 years, in which case it would pay the state another $10 million up front and roughly $164 million over the remainder of that term.

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“This expansion will enhance broadband service as Agile Networks’ open access model will give wireless carriers and providers the ability to easily enter new urban and rural markets,” Micah Vincent, director of the Indiana Office of Management and Budget, said in a statement. “The impact of significantly increasing broadband availability in underserved areas will facilitate economic development, increase educational learning and telemedicine opportunities, increase growth for rural businesses, advance agricultural technologies and provide reliable broadband for residents.”

State leaders especially highlight the value of this proposed deal in helping cut down on the cost for Agile to start offering broadband service in underserved areas.

With the Federal Communications Commission finding in its 2016 “Broadband Progress Report” that 17 percent of all Indiana residents and 52 percent of the state’s rural residents lack access to broadband — behind the national averages of 10 percent and 39 percent, respectively — officials believe the deal could prove significant to people without internet.

“This agreement will result in much-needed broadband to many rural communities across the state that are currently underserved, helping them develop and amplify the quality of life and quality of place critical to economic investment,” Lt. Gov. Eric Holcomb said in a statement. “Expanded broadband is an important tool for rural communities to attract, retain, and retrain talented Hoosiers and recruit quality employers.”