Moneta-based internet service provider ZiTel will take over work on a broadband deployment project in Franklin, Henry and Patrick counties that was beset by years of delays.
Virginia’s Department of Housing and Community Development on Tuesday morning executed contract amendments with the project’s grant administrator, West Piedmont Planning District Commission, to replace RiverStreet Networks, which had contracted in 2022 and 2023 to deliver internet connections to those three counties, a DHCD spokeswoman said by email.
The contract was for 14,547 potential customers, but Riverstreet completed only 40 connections: 29 in Franklin County, 11 in Henry County and none in Patrick County. The housing department’s Office of Broadband determined last month that RiverStreet Networks, unable to acquire financing, was incapable of completing its broadband deployment work in Virginia, even as looming federal deadlines could cost the projects their unspent funds.
ZiTel, whose crews are completing a project in South Carolina, will begin work within about a month, said the company’s chief operating officer, Rodney Gray. He expected 10 ZiTel crews on the job simultaneously in all three counties after that.
“One of the things that we do differently … is we run our own construction company,” Gray said Tuesday afternoon. “We build most of this fiber ourselves with in-house employees. We own all the machinery and just build for ourselves.”
Appalachian Power is a partner in the projects and has completed a significant amount of utility pole placement, officials have said. Appalachian has also strung fiber-optic cable on those poles in what is termed the “middle mile” process. RiverStreet, which was to run the cable from there to locations in the “last mile” segment, had not done any work in nearly a year, county and state officials have said.
RiverStreet was removed from another West Piedmont project that covers Amelia, Bedford, Campbell, Charlotte, Nottoway and Pittsylvania counties, where the company completed connections to about 35% of 27,997 potential customers. In Campbell County, only 4% of the work is done, while nothing has been finished in Nottoway.
A separate project focused on Dinwiddie County alone has seen no work done for 5,009 locations. Yet another West Piedmont/RiverStreet project, in Pittsylvania County, has provided potential service to 854 out of 2,105 locations.
West Piedmont has put most of that region’s counties up for bid, while Bedford County opted to issue its own request for contract proposals.
The deadline for proposals to West Piedmont is Aug. 28, with most of those counties separately selecting providers, said Michael Armbrister, the planning district’s executive director. Bedford County’s proposals were due July 31, John Putney, the county’s broadband manager, has said.
The work in those counties, dubbed the West Piedmont East Broadband Project, was funded through a $33.5 million grant that the state administers via the Virginia Telecommunication Initiative, or VATI, which was largely funded by the pandemic-era American Rescue Plan Act. Another $59.4 million comes from match funding that RiverStreet and local government partners provided, according to West Piedmont.
Henry, Patrick and Franklin counties, collectively called the West Broadband Project, received an $87 million VATI grant, with $65.4 million in match funding from RiverStreet Networks and local governments.
The money must be spent before the federal government will reimburse its share, and RiverStreet officials have said that after they received the go-ahead for a more recent round of federal funding, they went searching for more financing. The broadband office, after issuing two notices to RiverStreet to provide corrective action plans, determined that new money was not coming the provider’s way.
ARPA funding came with a Dec. 31, 2026, deadline, after which the government would keep the money that hasn’t been accounted for. But the Department of Treasury has recently noted that it would offer extensions to some projects. Gray, the ZiTel officer, said that the West Broadband Project received extensions to June 30, 2027, on the 2022 contract and to Dec. 31, 2027, on the 2023 contract.
“It’s a very daunting task,” Gray said. “Yeah, I’m not going to lie to you, it is one of those things that’s going to keep me up at night to get this done. But ZiTel, we have made a reputation with ourselves with DHCD in the state of Virginia that we get done what we say we’re going to do.
“We started this company back in 2017, and we took our first so-called bites of the apple from the grants. … We took small bites to prove to people that we could get it done, and then we took bigger bites as we went on.”
Del. Wren Williams, R-Patrick County, represents a district that includes part of Henry County as well. Williams said he was “very disappointed” in RiverStreet’s inability to finish the project so close to the deadline.
Broadband access “is hugely important for our area, for our retirees, for the role of health that we’re trying to do with video and other conferencing, that type of stuff connecting us to the more urban areas,” Williams said. “And it’s very frustrating when we see other communities right next door or right across the street or right across the county line getting broadband piped into their homes, and yet we’ve been promised broadband to every home by RiverStreet and others.”
He said he was excited to see West Piedmont and county officials quickly pivot to a new provider.
“If we lost that federal money, truly the projects were gone and really they would never come back again,” he said. “We would not get that money. It just doesn’t come back like that. There was a particular push [in Congress], bipartisan motion, and it was able to be passed, and I don’t think you would get that same thing today as easily. So, very important that … we’re able to take care of this, because this is big.”
Meanwhile, RiverStreet owes unspent money back to state coffers. Armbrister did not reply to an email asking how much it owes, but repayment is overdue as of Aug. 1, according to the DHCD.
The company is under another corrective action plan, this time for its $44 million Broadband Equity Access and Deployment program award. The deadline for its response is Aug. 15, according to DHCD.
