Am. Samoa Rushes To Spend Grant For Broadband

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

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Funds must be used before end of September or sent back to Feds

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Sept. 22, 2015) – American Samoa TeleCommunications Authority acting executive director Alex Sene Jr., told lawmakers that the government owned entity has until the end of this month to spend all of the federal money awarded for the multi million dollar Broadband Linking the American Samoa Territory (BLAST) project or it will be returned to the federal grantor.

Sene’s statement was made during last week’s ASTCA fiscal year 2016 budget hearing, where a status report — requested by lawmakers — on the BLAST project was presented to the Fono Joint Budget Committee.

The US Department of Agriculture Rural Utility Service had awarded ASTCA a total of $91.03 million— $81.03 million in grant and $10 million in loan money—for the BLAST project. ASTCA’s status report of the project shows that as of Aug. 1, 2015 total expenditures stand at $88.35 million leaving a balance of $2.68 million.

Responding to questions from Rep. Vesi Talalelei Fautanu regarding the unspent balance during the budget hearing, Sene said ASTCA has not yet finished paying the bills for the project as the report was prepared while bills for the project were still coming in.

Sene also said that ASTCA has to use up all of the money for the project by the end of this month and any left over money will be returned to the federal grantor. He explained that ASTCA had also withheld 10% for some subcontractors for the project, until it is completed and once the 10% is released, that will bring down the balance.

He said ASTCA is hoping to bring down the leftover balance, or unused money, to less than $1 million.

"If this fund was given to us to spend, spend it," Vesi informed Sene, who responded that ASTCA continues to work with RUS on this project.

Rep. Faimealelei Anthony Allen pointed out that the BLAST main contractor to lay the cable, Michels Corp., has returned to the States, but the project is not yet completed. He and other lawmakers asked about the reason for the delay and how ASTCA plans to complete this phase of the project.

Sene explained that Michels was supposed to complete the project in accordance with the contract, but due to delays in shipping of materials from the U.S. earlier this year (due to the labor dispute at US west coast ports) ASTCA sought and received approval from RUS for ASTCA personnel to complete the fiber to home installation.

According to ASTCA’s budget, $3.25 million is allocated under "telephone & communications" expenditures — a decrease of $835,250 from the FY 2015’s total of $4.08 million. Explanation in the budget document states that the decrease is due to releasing services and utilizing O3b Network satellite as a main communication provider.

Rep. Larry Sanitoa asked if this proposed funding covers payment to the American Samoa Hawai’i Cable — the company that manages and operates the undersea fiber optic cable connecting American Samoa to Hawai’i and American Samoa to Samoa. He also asked if ASTCA has anything to do with ASH Cable, in which ASG is a minority shareholder.

Sene responded that the allocations cover ASH Cable’s DS3 lines as well as the O3b program. He pointed out that there are other circuits that will be transferred to O3b that will save money for ASTCA in the new fiscal year.

ASTCA board chairman, Roy J.D. Hall Jr., who appeared with Sene for the budget hearing, said ASTCA "has no active or past participation with the ASH Cable. We’re merely a commercial subscriber."

"And I would add also that while there is a saving with the switchover of some of the services under the O3b program, we still need to keep under contract with ASH Cable as a backup and for redundancy," he said. "So we’re still paying for ASH Cable."

Sene added that O3b has been turned on since April this year and most commercial and residential services are using O3b. Additionally, ASTCA has plans to expand its bandwidth due to demand of internet usage.

BLAST PROJECT BUDGET

The BLAST project report also provides a breakdown of expenditures as of Aug. 1:

The report also provides a brief explanation of the expenditures and other information. For example, "outside plant", which has the largest budget proposal of $52.05 million, including Michels Corp., American Samoa Power Authority power poles and Wireless Innovation Solution (for microwave radio link).

Although the current session is scheduled to end Oct. 1, some lawmakers plan to seek an updated financial report on the BLAST project in the coming weeks. They also plan to reach out to their constituents if ASTCA has imposed new fees for BLAST connectivity.

Of note is that one of the contractual conditions of ASTCA’s BLAST project grant funding is that ASTCA must improve broadband capacity up to 3 times greater than it currently offers, at the same price it presently charges or charged on the ‘old’ system.

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