McConnell: Legislative oversight at ETV saves money

July 30, 2009 by senatormcconnell

A year and a half ago, Sen. Luke Rankin and I were accused of “squandering our state’s chance to build a state-of-the-art WiMAX broadband system.” Some editorial and op-ed writers claimed we were either indifferent or foolish when we chose not to bless a single-source deal between ETV and a broadband provider. Despite accusations and the reckless spreading of misinformation by newspaper editors and op-ed writers, we stayed the course to ensure that the taxpayers got the best return on their investment in ETV’s assets, which can be leased to private companies for the provision of broadband services.

The Legislature created the EBS Commission, a group of private business persons with the expertise necessary to take full advantage of the potential created when the FCC restructured the spectrum licensed to ETV. We instructed the commission to obtain bids using a competitive process and to ensure that the state’s assets were not made available to subsidize a private company’s competitive service offerings. We were accused of protecting local telephone companies’ profits, putting politics ahead of science and squandering an opportunity to make South Carolina a leader in advanced broadband services.

These critics repeatedly asserted that ETV could lose its licenses unless we had a plan in place by February of this year to convert them into a WiMAX wireless cloud that covers the entire state. Had we followed them, the state would have left millions on the table.

The FCC’s rules did not in fact require ETV to build out a WiMAX network. After discussions with FCC staff, we were assured that we had time to do the due diligence needed to optimize the potential use of ETV’s assets and to eliminate any risk of losing the licenses. ETV only had to notify the FCC by April 21, 2009, that it would move its channels to their newly assigned places on the spectrum. ETV has until April 2011 to complete its transition without prior approval.

If we had not put legislative restrictions on ETV’s ability to lease its spectrum, the agency could have obligated its licensed spectrum for 30 years at what we believed were bargain basement prices. ETV claimed to have someone waiting in the wings to lease its spectrum, and it did. ETV was offered $67.5 million for a 30-year lease of its spectrum.

Legislative oversight stopped ETV and doubled the revenues to the state.

Fast forward to last month. Instead of the $67.5 million offered by one company in 2006, that company and another provider have submitted a joint bid of $143 million. The EBS Commission considered eight bids that had been submitted and recommended that the Joint Bond Review Committee approve this new bid. A subcommittee of the Joint Bond Review Committee is taking a thorough look at the bid to determine whether it will recommend approval of the bid to the Budget and Control Board.

Once the bid is approved by the Budget and Control Board, the companies can begin installing the necessary equipment to transition the frequencies from analog signals to digital signals and provide wireless broadband to the citizens of the state. South Carolina has broadband available to the vast majority of its citizens through wireline and wireless facilities. Instead of squandering an opportunity, through oversight of an agency, we optimized the opportunity to bring broadband to more citizens of the state and brought in an additional $75.5 million for the state.

Mr. McConnell, a Charleston Republican, is president pro tempore of the S.C. Senate and chairman of the Senate Judiciary Committee.