WILLMAR-A project to bring broadband internet to north-central Kandiyohi County is in trouble.

County Administrator Larry Kleindl received notice late Thursday afternoon from Consolidated Telecommunications Co. CEO Kevin Larson that the Brainerd company intends to pull out of the project.

In a signed letter sent via email, Larson said the "lack of sufficient future broadband subscribers financially committed to the project" led the company's board of directors to decide not to accept a $4.9 million state grant that was a key piece of the $10 million project, which would also have included $5 million in county-backed tax abatement bonds.

"Proceeding with the project would not be financially responsible for our Cooperative," Larson wrote.

Kleindl said he was caught off-guard by the company's decision.

"We're very disappointed. We've worked very hard to make broadband in rural Kandiyohi County and rural Minnesota happen," Kleindl said. "We've operated in good faith from the beginning to the end. We are very disappointed with this letter."

The county's broadband task force has spent about three years working to bring high-speed internet to the county, including securing one of the largest border-to-border broadband grants from the state, holding numerous meetings, making phone calls and going door-to-door to sign up customers.

Members of this committee are "exhausted and heartbroken after today's news," said state Rep. Dave Baker of Willmar.

Despite the bleak announcement from Consolidated Telecommunications Co., Kleindl and Baker said they are not ready to give up and will pursue negotiations in hopes of still reaching a positive resolution.

"I'm trying to keep something on life support alive," Kleindl said, adding that he hoped a meeting to talk with CTC could happen today.

Baker also said he is "not willing to give up" and would be calling state officials to "see what options we might have yet."

Baker said the local committee has worked too hard to give up.

"It's distressing news but we're not giving up," Baker said. "We've come too far."

Caught by surprise

There was no doubt news of the Consolidated Telecommunications Co. decision to end the partnership and the project caught the county by surprise.

Just a couple hours earlier at a meeting of the Kandiyohi County and City of Willmar Economic Development Commission's Joint Powers Board, officials had expressed optimism the project would soon have the final go-ahead.

The EDC's Connie Schmoll had been scheduled to meet with the company Monday to talk about the next step in the process.

During an update to the EDC board, Schmoll said Consolidated Telecommunications Co. had been pleased that a big push to sign up 810 customers by the end of a two-week extension period was successful.

There was concern that 125 of those customers had not sent the $25 deposit by the deadline, but checks were still coming in.

"CTC was extremely excited and pleased about the response in the two-week deadline that we gave to our community," Schmoll said during comments around 2 p.m. Thursday. "They didn't expect that. They're pleased about it and they're excited. That's all I'm hearing from CTC right now."

But a couple hours later, Kleindl learned of the CTC board's decision.

"It was a shock," Kleindl said. "We weren't prepared for this."

Possible problems with the project included the state's decision to allow existing companies the right of first refusal for extending services to a region, which left low-populated, difficult-to-reach areas open to new contracts, Kleindl said.

There was also confusion about the refundable $25 deposit required of customers signing up for the project. Sign-up was already underway before the need for a deposit was made clear. The inability to make those payments online also created delays.

In the letter, Larson said Consolidated Telecommunications Co. and Kandiyohi County "jointly tried to secure the necessary commitment for nearly seven months" and that the company had invested $70,000 to secure customer commitments.

CTC thanked the county for its efforts to try to make the project a success. Reached by phone Friday afternoon, CTC had no additional comment.

Kleindl said the local broadband committee, the county board and volunteers "worked tirelessly" to make the project happen. "I want to extend our appreciation for all they have done," Kleindl said.

He said the county will keep trying to fill the county's unmet broadband internet needs to help agriculture, education, business and healthcare have a future in rural Kandiyohi County.

"We've worked too darn hard," he said. "We've put so much into this."

If the project does not advance, the $4.9 million state grant will stay with the state and likely go to another entity eager for state broadband funds.

People who sent in $25 deposits will have their money returned.