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State wants Gigabit Squared to return $2 million grant

Updated: April 29, 2014 6:37AM



The state is fighting to take back $2 million in grant money it awarded a company that promised to install ultra-high speed Internet access throughout the South Side.

Gigabit Squared, a Cincinnati-based company that last May touted the high-speed project in nine South Side communities, “has lied repeatedly” about its intentions and may have spent only $250,000 of the grant money for legitimate purposes, said David Roeder, spokesman for the Illinois Department of Commerce and Economic Opportunity, which issued the grant.

On Oct. 16, 2012, Gov. Pat Quinn announced the $2 million in Illinois Jobs Now! capital funding as a seed investment to Gigabit Squared as part of a statewide competition to set up ultra-high speed broadband networks across Illinois.

The state agency has tried since January to get the money returned, Roeder told the Chicago Sun-Times on Thursday.

He said Gigabit Squared failed to give the state the information it needed to trace how the money was spent, and “we have no patience with this abuse of the public’s trust.”

The state sent a letter to Gigabit Squared on Thursday asking whether they want to seek an informal hearing on the dispute. The company has until April 10 to respond.

Gigabit Squared issued a statement Thursday, saying in part: “Gigabit Squared’s new leadership team has a proactive, open, and honest dialoague with the State of Illinois to move towards a positive resolution of the project. This has included access to the company, its records, leadership, and meeting every deadline provided as part of the State’s normal review process.

“We are particularly puzzled by the comments regarding our delaying the process which is contrary to both verbal and written comments from the State indicating its appreciation for our openness and cooperation during this process,” the statement said.

Gigabit Squared told the Sun-Times last May of its plans for a digital transformation of the South Side, with $150 million in projects that would have included a data center, a job training center and ultra-high speed Internet connections to bring Chicago’s fastest fiber and wireless broadband capacity to 100,000 residents and 11,000 schools, businesses, hospitals and clinics. The goal was to build more than 150 miles of underground fiber with a backbone that runs from Cermak Road on the north to 99th Street/Interstate 94 on the south, and from the Dan Ryan Expy. on the west to the lakeshore on the east.

Chicago isn’t the first city where Gigabit Squared has stumbled. The company’s plan to provide high-speed broadband to underserved neighborhoods in Seattle went bust in January. GeekWire reported that Gigabit Squared left a $52,250 unpaid bill to the city of Seattle for uncompensated work that the city’s staff and engineers had done on the project.

Meanwhile, a South Side neighborhood group determined to get ultra-high speed Web access in Woodlawn has started work on a demonstration project aimed at starting up in late April.

The first phase of the project will cover an area in North Woodlawn bounded by 61st to 65th streets, and from King Drive to Cottage Grove, said Pierre A. Clark, the IT professional leading the effort.

The goal is to switch on the first phase by April 29, said Clark, who runs the Woodlawn Broadband Expansion Partnership and the Southside Broadband Expansion Collaborative spearheading the effort.

The second and third phases will move east across Cottage Grove to Stony Island and extend to 67th Street on the south. The second phase startup goal is June 1. No date has been set for the third phase.

Clark said the project has the backing of router giant Cisco Systems and its cloud networking group, formerly called Meraki, to provide the connectivity “plumbing” for an eventual communitywide network.

Two of the community group’s engineers with Key Link Technologies, a south suburban engineering design firm, have started testing the Cisco access points at the Blue 1647 innovation center at 1647 S. Blue Island Ave. in Pilsen. The team hopes to put the first access point and network operations center in a business incubator started by Sunshine Enterprises and slated to open this summer at 501 E. 61st St.

Other supporters of the project include Globetrotters Engineering Corp., headquartered in Chicago, which does network mapping, and the New America Foundation, whose open-source software is designed to enable community-based and locally governed technology solutions.

The ultimate goal is to showcase Woodlawn as the “proof of concept” community in expanding to a Wi-Fi and fiber-optic network covering nine communities — Douglas, Grand Boulevard, Greater Grand Crossing, Hyde Park, Kenwood, Oakland, South Shore, Washington Park and the rest of Woodlawn.

The project engineers hope to set up applications for telemedicine, online banking and financial literacy, and neighborhood safety and communications.

Clark said the community groups — not Gigabit Squared — started lobbying for the broadband access in 2011 and intends to see it completed.

“We have been transparent in what we’re doing, where we are doing it and when we are doing it,” Clark said, adding that the community groups welcome working with the state to see it through.

Email: sguy@suntimes.com

Twitter: @sandraguy



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