What was the basis for Senate Bill 140? Follow the money to higher speed internet in rural Alaska favoring cable fiber, not satellite speeds

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Although Senate Bill 140 is now a comprehensive education package with provisions for student transportation, correspondence schools, charter schools, teacher bonuses, help for deaf and hard-of-hearing children, and basic funding for school districts, it started out as a simple bill: Higher speed internet for schools in rural Alaska.

The text of the original bill is simple, and just 56 words:

“Each fiscal year, a district in which one or more schools qualify for a discounted rate for Internet services under the federal universal services program is eligible to receive an amount for each school that is equal to the amount needed to bring the applicant’s share to 100 megabits of download a second of the Internet services.”

What those 56b words mean is that rural schools with internet speeds of under 100 megabits of download time will be eligible for massive federal-state grants. Before, those grants were for rural schools that were only at 25 megabits.

But then, because it was an education bill, it got the Christmas-tree treatment in the House, which has a Republican majority that wanted to tackle a number of education issues, not the least of which is dealing with funding for schools. With a new majority in charge, now was the time to act on a variety of education priorities. The bill is now 19 pages long.

A look at the underlying bill doesn’t reveal much, until one looks at who may benefit: The bill’s prime sponsor is Sen. Lyman Hoffman, who is the paid board president of Bethel Native Corporation, a for-profit village corporation that, during the last round of rural fiber-optic grants, was a big player and made millions of dollars. He’s also co-chair of Senate Finance. He’s also on the Statewide Broadband Advisory Board.

Bethel Native Corporation in 2022 was awarded a $42.4 million grant from the National Telecommunications and Information Administration Tribal Broadband Connectivity Program to lay a 405-mile fiber optic network from Dillingham to Bethel.

“The project, to be completed in partnership with Alaska telecommunications provider GCI, will bring urban-level 2 gig internet service to consumers in Bethel and Yukon-Kuskokwim (Y-K) communities along the fiber route,” said the announcement in 2022, when the grant was awarded to BNC.

The BNC/GCI fiber project will follow a submarine route from Dillingham, where it will join an eventual Nushagak Electric & Telephone Cooperative long-haul fiber project, to the mouth of the Kuskokwim River, then follow an overland route the remainder of the way to Bethel. GCI was to be upgrading its local access network in Bethel and installing fiber to homes in Platinum, Eek, Napaskiak and Oscarville.

Bethel Native Corporation is a Hoffman family enterprise. Sen. Hoffman’s niece-in-law, Ana Hoffman is the CEO. Members of his family — a brother, a sister, and first cousins all make up the board of directors. There are only two or three members of the board not related to the Hoffmans in some way. The for-profit company has subsidiaries involved in the fiber-optic expansion business, such as AIRRAQ.

Read more about GCI’s partnership with AIRRAQ.

If SB 140 passes, school districts all across rural Alaska will be paying hundreds of thousands of dollars each to “last mile” companies like GCI to provide the higher-speed internet service. That cost will get passed along to the state of Alaska, as schools clamber for more money to pay for higher speeds.

“The Alaska School Broadband Assistance Grant (BAG) program was created to assist schools to increase internet download speeds. Established in 2014 by the Alaska State Legislature, this grant originally allowed schools to reach download speeds of 10 Mbps. In 2020, the State Legislature revised the statute to help schools reach 25 Mbps download speeds. SB 140 seeks to increase the download speeds to 100 Mbps,” wrote Sen. Hoffman in his sponsor statement last year.

In other words, the section now buried in 19 pages of other legislation is a gift to companies like GCI.

“New and improved technologies and increases to internet services have allowed for more and faster delivery of internet services. Because the cost of internet in some rural districts has decreased, the annual internet costs have fallen below benchmarks established by state law. To allow school districts to utilize these advances, SB 140 will increase the minimum requirement of Mbps from 25 to 100 which will increase the amount of Broadband Assistance Grants (BAG) to help school districts reach increased download speeds. Increasing the funding available through the BAG program in future years will allow schools to leverage more E-Rate funds to bring Alaskan schools in line with national standards for broadband connectivity,” Hoffman wrote.

In 2023, 151 Alaskan schools in 27 school districts benefited from the school BAG awards, many of them in the Bethel Native Corporation work zone.

Because of Hoffman is co-chair of the Senate Finance Committee, and because he is a member of the majority, little attention has been paid to the original bill and whether he has a financial conflict of interest, with Bethel Native Corporation deeply involved in fiber-optic internet. The mainstream media has ignored this section of SB 140 and who gets the money.

And Sen. Hoffman doesn’t seem to care what else is in SB 140 — he just wants it passed immediately.

The way megabits are paid for in Alaska is unique. The schools could already get the higher speeds, but in Alaska, broadband companies have a system where they get paid for every single megabit that goes through their lines. The amount they get paid per megabit is astronomical, compared to the Lower 48. This could be seen as a megabit hostage taking — they could release those megabits but will only do so if paid for them.

All the while, none of this funding goes to a cheaper and faster alternative: Satellite-based internet such as Starlink, which is designed for places like rural Alaska. Must Read Alaska has learned that in one far-west village in Alaska, teachers are not using the fiber-optic cable internet, but are bringing their Starlink dishes to work with them, setting them up outside the building, and running a line inside to their class.

In Scammon Bay, GCI provides 10 Mbps, while Starlink, for a fraction of the cost, provides 50-220 mbps to homes, although they have different speeds for the school. GCI could offer faster internet at the school, because it gets paid more.

Residential rates in Scammon Bay.

During a recent bid to provide service to the Lower Yukon-Kuskokwim School District, Microcom won the bid using Starlink terminals over GCI. Microcom came in at about one-tenth of the price.

But SB 140 favors fiber optic for some companies, while others, already providing satellite internet at high speeds and low prices, are not part of the money trail from the federal and state governments.

42 COMMENTS

  1. Starlink is obviously the better option for internet to the bush. Cable is antiquated and should not be considered.

    • This is factually inaccurate. While Starlink may be a more viable option for some very remote locations, fiber optic networks are the gold standard for connectivity. Low Earth Orbit (LEO) satellites such as Starlink have slower speeds, more latency and cannot provide the bandwidth that fiber can. Satellites are impacted twice each year by “sun outages” where radiation from the sun directly behind the satellites “blinds” users’ antennas on the ground from receiving traffic from those satellites. LEO satellites have a life span of 7 – 10 years – those satellites will some day fall out of the sky. Fiber optic networks have a lifespan of 30 years or more and can be upgraded to handle more traffic. Using coax cable to distribute internet within a community such as Anchorage or even Kotzebue has speeds of 2.5 Gb or more. Try that with LEO satellites.

      • Rollo, If you were in Northwestern Alaska this last year you would have Starlink. Why? Because your high speed heavily subsidised cable got munched by deep sea ice in the Arctic Ocean. Elon’s little sat receivers started popping up everywhere.

      • Weird, how is it that the majority of constructions choose starlink for remote projects? The company I work for switch last year, and that’s $2,000 less per month GCI receives. Get with the now.

      • Truth be told, LEO satellites are bringing residents, schools and health clinics speeds far faster than any fiber provider is currently offering the villages. Latency is subjective and literally determined on a case-by-case basis. For example, latency from Kotzebue to Seattle (mathematically) is nearly 100 ms alone. And your 30 year useful life for fiber is quite generous since subsea fiber is not “upgradable”. You miss the point of the article – satellite is doing what fiber should be doing at a fraction of the cost – just ask the 20,000 residents currently choosing the affordable space-based broadband option over fiber. Or you can keep your head in the sand – either way.

      • I think that there is a big push for fiber optic because then the “internet body of things” can be successfully deployed across the state where ever fiber optic is laid. The internet body of things is going to forever change humanity’s lives and truly make them slaves to the globalist demons. This is what the globalists want and they are willing to put out big bucks to make us all slaves.

      • Geosynchronous satellites, not LEO satellites, are subject to so called sun outages.
        I love my Starlink. I’m getting 200 Mbps, less than 1% packets loss and as low as 35ms latencies.
        I can stream multiple TV video steams. I dropped my three times more expensive Dish network.

      • Interesting that you say that StarLink is slower . My son brought StarLink home from work and tested it . Literally took five minutes to setup . He’d never seen such internet service . Very fast and better than his hard wired provider has ever offered in Fairbanks and for multiple users Looking at the cost to put hardwired internet into a village of a hundred dwellings on the Colville River estimated at $300,000 per household . Better check your math . StarLink would supply thousands of people in rural Alaska for fraction of that cost . And the homes or cabins would not have to be in a town . Interesting as some of these folks would actually have phone service for the first time in their lives in very remote areas .

        It’s all about grift and graft as pointed out in article . Someone is getting rich through political connections as is always the case in Alaska . Follow the money

      • Try stringing it across thousands of miles of tundra with no road access… Besides, if you live in the Bush, you drive four-wheelers not Corvettes or low slung sports car… Like Urban America can.

  2. Thank you for pointing out how naked the graft is.

    The House Majority choosing SB140 as their vehicle for an omnibus education bill is a testament to how corrupt our legislative process has become.

    Hoffman was first elected in 1986. He has been serving in the Alaska Legislature ever since. No one else even comes close to four decades in the legislature.

    • Corruption in Native Corps as well. Its a joint venture of what should be criminal behavior. But everyone will look the other way as usual, so goes Alaska politics.

    • What part of “the traditional native subsistence way of life” is high-speed internet, or any internet at all?

      Where does this irrational and insane idea come from that people living out in the Bush deserve every amenity of modern urban life?

      • Reparations Jeff. Difference is the tribes in Alaska were nomadic. They weren’t chased out of their lands like the tribes in lower 48. Some how DC feels that these folks need the same federal money that poor tribes in lower 48 are entitled to and for good reason . They were treated horribly and warred upon . Not the case in Alaska . About the worse thing we did was bring deadly diseases to these folks and it was inadvertently.

  3. Corruption reigns supreme but barely a fraction of an inch behind Nepotism in rural Alaska.

    If I’ve never mentioned this before, Lyman Hoffman is a resident of Anchorage, so why does the Legislature allow him to be seated as a Senator??

  4. This is the quintessential example of government corruption by elected officials. It is just plain disgusting that the legislature allows this to happen. Senator Lyman Hoffman (D, Anchorage) should be ashamed of himself lining his pockets at the expense of other Alaskans’ PFDs.

    How many PFDs will it take to pay off Hoffman’s relatives, GCI, any other crony capitalists who have their hoofs in the Alaska State trough?

    This is the prime example of what’s wrong with Alaska.

    • No he thinks it’s an entitlement for him and his family . A form of reparations. No one ever leaves an elected position poor in our country or our great state for that matter .

      Peter Schweitzer written a new book on following the money in politics. It’s going to remove the shade on the folks we send to DC . Kind of like a sunrise to a Vampire . This ought to shed some light on these folks eating at the trough . Can’t wait !

      • I, for one, am a good deal poorer than when I was first elected. Maybe it was the $40,000+ in legal bills as a freshman, or the $250,000+ in legal bills during my last term, or the additional legal bills this term.

  5. Now wasn’t GCI & the Rasmuson Foundation wanting our PFD’s in the big POMV legislation blitz & that they ( Unions & Non Profits) would benefit??? Who is profiting now ? Who’s going to pay the tab? Follow the money, the root of all ****!

  6. Starlink is subsidized by the Federal through Space X. This article is negligent in explaining the difference between Dedicated Internet Access and Best Effort service which is order of magnitudes cheaper.

    • Or maybe Chief Eddie Hoffman made some deals with the demons in the early days to make sure his people were taken care of by the government and he could not foresee that the future would bring about a genocidal wave that would wipe out his people and force everyone to be survielled like mice in a box? The Hoffman family name has always been prominent in the Bethel area from what I understand, so what a better way to take over the interior by making friends with and manipulating the players in that area (i.e. Murkowski!)

  7. @Rollo Tomasi your statement contains some factual inaccuracies too. Sun Outages happen to geostationary satellites. LEO constellations can have several satellites in view at any one time and they are moving rapidly, and so sun outages are a near impossibility. In the 7-10 year lifespan of a Starlink satellite there is likely to be a break or failure of your undersea fiber. What’s the cost of that repair compared to Elon launching 10 more satellites. Fiber might have a long lifespan, but failures happen and are very costly. Look that one up for me would ya?

  8. Cheers! @GOPoversight @dreamgbutterfly 🦋⚖️🏹 they’re thieves. No regard for ethics or integrity in science or work products. Thieves, what’s funny, they’ll give all the white dudes credit for their work while they rip off disabled native people. Understand the deprivation of rights under color of law that Hoffman is doing to enrich himself and his family. Meanwhile , I was a key person on the original broadband grant program for United Utilities before GCI bought it and gave their preferred natives credit, got the state to close the original broadband grant program to make it seem like the Worls from southeast Alaska started it all. My family lost everything through their actions at the Alaska Native tribal health compact and the telecom work. It’s time to change the laws to stop allowing them to steal based on native preference. Read Alaska Telecom Hx 101 here… ‘https://twitter.com/dreamgbutterfly/status/1760042113918443805?t=FDxvu4E-2cQHxgvwXwu0aA&s=19

  9. I would rather have the Federal Grant money stay in State with the Bethel Native Corporation than send the $$$$ to Elon Musk for his trip to Mars

    • I would rather there were no Federal grants. Fewer spendthrift programs, means fewer chances for corruption. And, maybe a positive good for our national deficits and debt.

    • Frank that’s dumbing thing I’ve heard . Elon Musk is a combination of Einstein and Henry Ford . He has spent a dollar for every hundred dollars the Govt has spent on the space race . That’s not even factoring in funds from 50 years ago . He almost flawlessly launching rockets every week . Using boosters over and over . His rocket efforts are privately funded . He’s really rubbing NASA’s nose it .

      Going to Mars for Elon Musk is a hobby interest of his . Like collecting coins for the rest of us .

  10. So, is David Eastman the villain or the hero here? I’ll stand behind anyone who works to tear down or keep pig troughs from being built. If that’s being an “ineffective” representative, I say bravo.

    Just yesterday two articles hit, one stating that the permanent fund is broke, another saying that they’re borrowing money for gambling, especially after the push to expand into pirate equities.

    Just how much bandwidth does the state have for more bloating?

  11. Verizon provides 5G internet in Phoenix for $35 a month, three year intro. smokes my GCI cable in prices and way less connection problems

    don’t blame GCI, bought out by Cox Communication. terrible service issues down south, customers fleeing fast. Malone needs to scalp us up north to prop up his dividends

  12. Possibly many Alaskans had hopes that Governor Dunleavy would know how to contain some of this. Finally, after two or more attempts, he has an AG who can keep his fly zipped – so far as we know – but I think he may be looking for the main chance instead of trying to improve Alaska. Most people I know that Click Bishop will be the next elected governor, and I don’t know how much of a corruption fighter he could be: He is a simple fellow.

  13. Can someone there please write article about GEC, Global Engagement Center: and its connection to spying on us on the internet?

  14. I wonder if they will swing by and run some fiber optic to the GCI fishing lodge on Lake Nerka outside of Dillingham where they take the big cats to be wined and dined. Same lodge of course where Ted Stevens met his end. Who would argue with the return on spending thousands on lobbyists to get hundreds of millions in subsidy for needless services? The Mafia would blush and the corporate/political back slapping that happens in Alaska and most intensely in the bush. Unfortunate that people like Stevens, Murkowski, Young, Hoffman only used Bush Alaska to line the pockets of their buddies. Hoffman takes it to a new level.

  15. I seem to recall a flap about members of a prominent Barrow family who profited from similar pork a few years back. Can’t recall the particulars, but I seem to remember there were penalties. Hmmm…

  16. There is more to this story.
    This was a grant awarded to the tribe, OTNC not BNC. many Hoffman’s on that board too run by a idiot stooge stolen away by BNC while tribal members get nothing in return but another huge bill. Worthy of a Federal Investigation but since the doctor came prob not. Follow the money

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