14 win a piece of Virginia's new broadband initiative

Virginia has tapped 14 companies, including satellite equipment and services giant Hughes, to bring broadband to every last nook and cranny of the commonwealth.

“You need a contract vehicle to get started in any agency,” said Tony Bardo, assistant vice president for government solutions at Hughes Network Systems LLC. “This affords us the first opportunity we’ve ever had to sell satellite services to government agencies in Virginia.”

The opportunity is a solid one. The statewide Broadband Internet Services acquisition is valued at about $50 million.

The Virginia Information Technologies Agency, which negotiated the five-year -- one base year and four one-year options -- acquisition, did not specify a value or ceiling for the Broadband Internet Services indefinite-delivery, indefinite-quantity contract.

The difficulty is that Virginia “hasn’t done anything like this before,” said VITA spokesperson Marcella Williamson. The purchase could be a new cost to an agency, town, school, or other state body, she said, or it could be that an existing contract for services expires and that budget would simply go to this contract rather than continue to be spent elsewhere.

But based on similar acquisitions done elsewhere, IT research firm Input Inc. estimates the acquisition “may approach $50 million.”

The acquisition offers cable modem services, digital subscriber lines, fiber to the premises, conventional private lines with dedicated data circuits, satellite services, and wireless fourth-generation (4G) standards or fixed wireless and radio with ground stations, such as Wi-Fi and WiMax.

VITA prenegotiated rates, but final costs will also take into account technology and region. Vendor selection is by ZIP code, with some contract-holders, such as Hughes, available to agencies in all Virginia ZIP Codes.

Such ubiquitous availability is meant to help bring broadband capabilities to areas statewide that are unserved or underserved, a source of complaints about the contract with Northrop Grumman Corp. to manage the state’s IT network. Northrop Grumman subcontracted broadband provision to Verizon Communications, currently Virginia government’s main provider.

In many areas, Hughes’ satellite technology complements rather than competes with Verizon’s fiber technology. Satellite communications “is at its best when it is the only way to enable communications to a remote location that doesn’t have traditional wireline or wireless network service options,” said IT consultancy Frost & Sullivan in its “World Satellite VSAT Markets” report in December.

Frost & Sullivan put Hughes’s share of the North American VSAT equipment market at 66 percent and its global slice at just over half. Hughes did have an advantage there — in the 1980s, the company invented the VSAT (very small aperture terminal), a two-way ground station. And North America, with its large distances, dispersed population and appetite for fast networks, has been the perfect market.

“The first opportunity is remote reach, rural reach for a variety of applications,” Bardo said. “It’s also great for telehealth. There have been some holes in remote health care outreach throughout the state,” he said. With this contract, he said, satellite communications “can connect patients with doctors that may be hundreds of miles away.”

The Virginia acquisition offers another venue for Hughes to demonstrate satellite’s capabilities for emergency backup systems “in more urban areas that have already been laced up with fiber,” Bardo said. Satellite can provide Virginia government agencies with Internet service as a path-diverse overlay to landlines. “I think we can offer some resiliency to the statewide network,” he said.

It’s a concept that is not new to Virginia technology officials. “VITA will work with Northrop Grumman to determine the feasibility of using some of these [new broadband] contracts to address our network redundancy challenges,” George Coulter, then Virginia CIO, said in March.

Verizon and Hughes have already forged a working relationship. Hughes is partnering with the prime contractors, including Verizon, on the General Services Administration’s Networx telecommunications acquisition.

Virginia technology officials needn’t go far to compare notes on Hughes implementations; the company is providing some emergency management services to Montgomery County, Md., and the Pennsylvania Emergency Management Authority, among other similar state deals.

Hughes has the biggest footprint among satellite services providers on the Virginia broadband acquisition, but both AmTech Inc. and Knight Sky LLC also will provide satellite services for some ZIP codes, VITA’s Williamson said.

The first year of the contract began in February 2010, but there remained “T’s to be crossed and I’s to be dotted,” Bardo said, so full-scale marketing to state, county, municipal government entities and state-funded colleges and universities is just beginning.

“That is not to say we’ve not been talking all along to potential customers in Virginia,” Bardo said. “There’s lots to be done in every state in terms of advocating the attributes of satellite broadband.”

The 14 winners are:

• Amtech Inc.
• Cavalier Telephone LLC.
• Citizens Telephone Cooperative Inc.
• Comcast Business Communications LLC.
• Cox Virginia Telecom Inc.
• E&E Enterprises Global Inc.
• Sunset Digital Communications Inc.
• Hughes Network Systems LLC.
• Jet Broadband Virginia LLC.
• Knight Sky LLC.
• Metrocast Communications Inc.
• NTelos Inc.
• Rockbridge Solutions Inc.
• GCR Telecommunications Inc.

Source: Virginia Information Technologies Agency