An audit of the Kentucky Communications Network Authority (KCNA), which manages the taxpayer boondoggle Kentucky Wired middle-mile broadband network, will move forward.
Republican lawmakers in Kentucky overrode a veto from Gov. Andy Beshear (D) that would have removed the $750,000 funding for the comprehensive audit in Senate Bill 25.
Beshear, the son of former governor Steve Beshear under whose administration the Kentucky Wired project began, vetoed the appropriation in the state budget for the special audit, saying that “there are much higher priorities for the Budget Reserve Trust Fund.”
Critics of the money-hemorrhaging Kentucky Wired say the examination is overdue. Andrew McNeill, president of the Kentucky Forum for Rights, Economics & Education, posted on X that “Andy Beshear knows this new audit is going to be ugly. With the veto override, it’s happening. And ugly is an understatement of what will be revealed.”=
Former State Auditor Mike Harmon examined Kentucky Wired in 2018, calling the project a massive “bait-and-switch on the taxpayers,” with Kentucky residents on the hook for up to $1.5 billion in costs.
Changes in the Kentucky Wired plans, which encompasses 3,200 miles of fiber across all 120 counties, shifted costs from private partners to taxpayers. Australian-based Macquarie Infrastructure Developments LLC and its contractors were initially supposed to bear most of the debt burden, but state officials decided to create the nonprofit corporation Kentucky Wired Infrastructure Company to take advantage of tax-exempt bonds. Unfortunately for Kentucky taxpayers, that plan will likely only make them pay more. From ignoring warning related to access to pole attachments to depending too heavily on the work of private partners and not conducting their own cost-benefit analysis, Harmon uncovered a series of mistakes by state officials.
The executive order that in 2015 created the KCNA to manage Kentucky Wired is also misleading, according to the initial audit. The order claimed the public-private partnership formed to build the broadband network “leverages private sector funding for most of the construction cost of the project” and that private-sector partners “bear the construction and operational performance risk of the project” while the state would maintain ownership of the network.
Allison Ball, who served as treasurer in Kentucky from 2016 to 2024, was elected as auditor last year. It’s not yet known when the audit of KCNA will begin.
The Taxpayers Protection Alliance (TPA) warned Kentucky officials of the dangers of the project from the start. Not only do government networks have a poor track record, but middle-mile projects often duplicate existing infrastructure, wasting taxpayer money in the process.
In 2015, TPA President David Williams omnisciently asked state leaders to “pump the brakes a little bit here and make sure there aren’t any kind of weird things in this contract that would really expose taxpayers to more handouts.” TPA also pointed out in 2017 that red tape in terms of access to rights of way and poles was increasing costs.
TPA noted last year that lawmakers tucked into the Kentucky Senate budget $211 million for fiscal year 2025-26 to pay off the principal balance of Kentucky Economic Development Finance Authority senior revenue bonds for Kentucky Wired.
Kentucky will receive $1.08 billion from the federal Broadband, Equity, Access and Deployment (BEAD) program. Beshear previously said Kentucky Wired will be integrated into BEAD-funded projects in an Interior Journal article, noting that the network “has been burdened with overspending and years of delays.”
While it is unfortunate that Kentucky taxpayers will have to fork over three-quarters-of-a-million dollars for a deep examination of KCNA, hopefully that audit will root out more of the waste, fraud and abuse that has sadly been a staple of Kentucky Wired.
