Bedford County says it wants out of a federally funded project that internet service provider RiverStreet Networks has failed to complete.
County officials sent letters to the state’s broadband authority and to the ISP two days after RiverStreet requested that the state extend a corrective action plan deadline that was due June 8.
RiverStreet teamed up in 2022 and 2023 with the Martinsville-based West Piedmont Planning District Commission to receive federal funding on contracts to deliver broadband to 50,805 potential locations in 12 counties. But it has reached only 11,773 of them.
The money must be spent, and work shown to have progressed, by year’s end in order for the partners to receive full reimbursement on $120 million across six grants.
RiverStreet has said that it ran out of investment dollars and is trying to get more money.
Bedford County Administrator Robert Hiss, in a June 10 letter to Chandler Vaughan, acting director of the state’s broadband office, said the county voices “extreme objection” to any further extension for RiverStreet, and it is “strenuously requesting” to separate from the project. He copied the letter to General Assembly members who represent the county: Sen. Mark Peake, R-Lynchburg; Del. Tim Griffin, R-Bedford County; and Del. Eric Zehr, R-Campbell County.
“RSN had ample time to complete this project and/or show its ability to complete it,” Hiss wrote. “Our broadband leadership team has met with RSN executives on multiple occasions and has heard the same story repeatedly. They have financial challenges and without additional money, they cannot fulfil their obligation. This is not a recent phenomenon.”
In a separate letter dated the same day, Bedford County Attorney Patrick Skelley II wrote to RiverStreet Networks CEO and President Eric Cramer and the project’s grant administrator, West Piedmont Planning District Commission Executive Director Michael Armbrister, noting that the ISPs contractual deadline with the county has expired, with “no assurances that RSN will complete its work in Bedford County in the foreseeable future, if ever.”
Skelley’s letter requests a mediator to assign the work to another company and to determine what RiverStreet owes the county “for losses and costs associated with RSN’s breach of its duties.”
The Bedford County contract calls for RiverStreet to offer internet service at 2,253 locations, but it had 954 remaining, according to West Piedmont. The company’s project completion deadline was Oct. 8, 2025.
Messages sent to West Piedmont’s Armbrister and RiverStreet’s Cramer and Greg Coltrain were not answered on Monday.
The broadband office, which is part of the Department of Housing and Community Development, has issued two corrective action plans to RiverStreet and West Piedmont since April. The first required comprehensive action plans for all the projects, including updated budget documents that identify sources of lending and equity, along with information on the funding status; resource management plans detailing construction crews and executed contracts; and construction plan production dates for each county.
West Piedmont and RiverStreet responded, but DHCD determined that it still lacked sufficient capital funding information. In a second corrective action plan letter dated May 8, the department requested documentation “that all outstanding capital sources are secured, including the identity of the lender, equity provider, etc.,” and it requested “to meet with representatives from the source of capital prior to finalization of funding being secured.”
On its deadline, June 8, RiverStreet and West Piedmont asked for another extension. By that time, Bedford County officials had seen enough.
“In Bedford County, there are multiple ISPs who have the financial and logistical ability to finish this project in [a] timely manner,” Hiss wrote. “Unlike RSN, these ISPs also have a track record of managing their funds to complete a project. … We welcome conversations about how this can occur both financially and in practice. As our agreement with RSN and West Piedmont PDC states, ‘time is of the essence.’ We take that phrase seriously and want to work with an ISP who shares that same commitment.”
RiverStreet’s two biggest partnerships with West Piedmont are the West Broadband Project of Patrick, Henry and Franklin counties, and the East Broadband Project, covering Amelia, Bedford, Campbell, Charlotte, Nottoway and Pittsylvania counties. The money came in two rounds of funding, in 2022 and 2023, from the pandemic-era American Rescue Plan Act.
They also combined for two other ARPA grants, a second one in Pittsylvania County and one in Dinwiddie County.
The West project was funded through a $33.5 million grant that the state administers via the Virginia Telecommunication Initiative, largely funded by ARPA. Another $59.4 million comes from match funding that RiverStreet and local government partners provided, according to West Piedmont.
The East Broadband Project received an $87 million VATI grant, with $65.4 million in match funding from RiverStreet Networks and local governments.
It was a later federal grant that set RiverStreet back, Coltrain, RiverStreet’s vice president of business development, said at a Patrick County Board of Supervisors meeting on May 26. The company received $44 million in promised funding from the Broadband Equity, Access and Deployment Act, popularly known as BEAD. That money covered new areas, some of which overlap with Patrick, Henry, Amelia and Dinwiddie counties.
In Patrick County, the company has not completed any of the 8,381 fiber locations it had contracted to complete there in 2022 and 2023.
In a recent letter to its VATI partner localities, the company wrote that “growth” from the new funding “required a full redesign and refinancing of our plans to meet several updated federal requirements.” RiverStreet added that “because these new build areas overlap with our existing infrastructure, legal and financing protocols require finalized contracts before we can break ground.”
That amounts to a lot of incomplete work, according to a document that West Piedmont provided to Cardinal News recently.
RiverStreet has completed work to 40 of 16,633 serviceable locations in the three West Project counties, Franklin, Henry and Patrick, from the 2022 and 2023 contracts. In the East Broadband Project, 9,785 of 27,997 locations are serviceable.
Dinwiddie County has seen no work done for 5,009 locations. The second Pittsylvania project has provided potential service to 854 out of 2,105 locations.
Only East projects Charlotte County, with 315 remaining, and Bedford County had seen more than half the work done, the West Piedmont document shows.
RiverStreet is the only one of 19 ISPs working with federal grant funding in the commonwealth that is currently under a corrective action plan, according to housing department documents. Four of its projects were listed as high risk to be unfinished, according to the Virginia Telecommunication Initiative quarterly report released in April.
Hiss’ letter cited a 2024 report from the state’s Joint Legislative Audit and Review Commission, addressing broadband deployment in the state. He cited three recommendations from that report to DHCD, including to strengthen oversight and monitor provider performance and to provide greater flexibility to ensure completion.
“The County is not requesting a new project,” Hiss wrote. “The County is not requesting additional funding. The County is not requesting expanded grant obligations. Instead, the County seeks approval to complete the same project, using the same public investment, for the same residents, through a provider capable of delivering results.”
While it is possible that Housing and Community Development’s broadband office will remove the company from all six grant projects, its officials have yet to respond to either the extension request or Bedford County’s letter. Vaughan, the acting director, didn’t reply to a message on Monday.
