Unalakleet, Elim tribes sue USDA over awarding $70 million grant to Fastwyre despite rule-breaking grant applications

The tribal governments of Unalakleet and Elim have filed a lawsuit against the U.S. Department of Agriculture’s Rural Utilities Service and its administrator for not complying with its own rules when awarding grants worth nearly $70 million to Interior and Mukluk Telephone Companies, and their parent Fastwyre, for building out broadband infrastructure in the Nome Census Area.

The money was awarded in fiscal year 2023.

The lawsuit, filed in the U.S. District Court Alaska in Anchorage, states that as a condition to award any funds through the federal ReConnect Program, applicants must obtain tribal government resolutions that consent to broadband service infrastructure being built on tribal land.

Neither Interior nor Mukluk Telephone have done so, not for Elim, Unalakleet or any other federally recognized tribe in the Nome Census area.

Instead, the lawsuit alleges, they went to the board of Kawerak Inc. and claimed “to have plans for investing millions of dollars into the region for the benefit of Kawerak’s members – the Native Tribes within the Nome Census Area including Unalakleet and Elim.” But Kawerak, the lawsuit points out, is not a tribe, is not a sovereign entity and has no jurisdiction over tribal lands. Interior and Mukluk solicited from the board of Kawerak a letter of support and submitted it to the Rural Utilities Service with their application, “but never took the essential step of obtaining Tribal Resolutions from the Tribes actually affected by the proposals.”

This causes a significant wrinkle in the actual prospect of getting access to broadband and speedier internet service. With the award of the money to Interior and Mukluk, no other provider can now apply for federal funding to build out internet infrastructure.

According to ReConnect Program rules, the government cannot fund more than one project that serves any one given geographic area. Even if another provider were to obtain tribal

consent and would be the preferred partner to build out internet capabilities, the ReConnect program would not be permitted to fund such a project unless it cancels the awards given to Mukluk and Interior.

“Tribes such as Unalakleet and Elim have been forced to accept services from providers to which they did not consent – should Interior and Mukluk ever actually perform – and have been prevented from receiving services from providers to which they do consent, causing irreparable injuries for which monetary damages provide an inadequate remedy,” the court papers say.

In addition, the lawsuit cast doubt on the reliability of Fastwyre Broadband, the parent company of Interior and Mukluk Telephone. Fastwyre bought also TelAlaska. “Fastwyre has a history of delayed deployment of broadband services and employee lay-offs” the lawsuit states. It goes on to say that Fastwyre obtained multi-million dollar funding in an earlier round of ReConnect funding to construct broadband services in the Nome Census Area and has not completed this project, four years later.

“Even apart from the impropriety of the RUS awards, the lack of performance by Interior and Mukluk will prevent unserved Tribal communities such as Unalakleet and Elim from obtaining access to broadband service. Not only have Interior and Mukluk failed to serve Tribes like Unalakleet and Elim, they have prevented other ReConnect applicants from receiving funding in future rounds to do so,” the lawsuit says.

This also will impact another funding mechanism, called Broadband Equity, Access and Deployment, BEAD for short. This program provides billions of dollars to expand high speed internet access, but the amount of funding available depends on the number of unserved locations within a certain region. With Interior and Mukluk having been awarded federal funds, the Nome Census region is marked as “unserved but with projects pending.” This designation prevents other service providers to apply for BEAD funding, even with tribal resolutions.

According to the lawsuit, the Rural Utilities Service has been informed of the improprieties, they have not rescinded the awards given to Interior and Mukluk. The lawsuit asks the court to direct the RUS to cancel the awards to Interior and Mukluk, to return all funds to the pool of funds for future ReConnect rounds to be awarded to applicants who comply with the rules; and to compel RUS to recognize that Unalakleet and Elim are eligible for alternative federal funding under the BEAD program.