Nevada Internet Project Shut Down: Taxpayer Money Missing

USDA Halts $27 Million broadband Grant in Nevada Amidst Misuse of Funds allegations

By Archyde News Service

April 4, 2025

A federal broadband project intended to bridge the digital divide in rural Nevada has been derailed following allegations of notable financial mismanagement.The U.S. Department of Agriculture (USDA) has terminated its funding commitment to Uprise Fiber, a Reno-based internet provider, effectively halting a $27 million grant aimed at expanding high-speed internet access in Lovelock and Pershing County. this action is directly linked to the disappearance of $9.1 million in Nevada taxpayer money initially allocated to Uprise by the Nevada Department of Transportation (NDOT) for the same Lovelock fiber optic cable project.

the initial $9.1 million from NDOT was crucial, acting as matching funds to secure the larger $27 million USDA grant through the federal ReConnect program. This program, a cornerstone of efforts to bring broadband to underserved rural communities across America, requires grant recipients to demonstrate financial commitment and stability.

According to a USDA spokesperson, the decision to terminate the funding followed an intensive audit conducted between March 3-14. The spokesperson stated, “USDA is terminating funding commitments to Uprise Fiber after an inquiry into the project.”

Key Violations Uncovered

The audit revealed several critical contract violations that led to the USDA’s decision. These violations, according to the USDA, included:

• Failure to Meet Matching Funds Requirement: This suggests Uprise may not have adequately demonstrated its financial stake in the project beyond the initial $9.1 million from NDOT.
• Duplicated Real Property Purchase: this indicates a possible instance of double-billing or misrepresentation of expenses related to land acquisition for the project.
• Inflated Equipment Costs: The USDA alleges that Uprise purchased construction equipment at a substantially lower cost than what was submitted to the Rural Utilities Service (RUS) for matching consideration.

The RUS,a USDA agency,oversees the ReConnect program and mandates that contractors contribute a portion of the project’s cost to qualify for federal funding. Uprise utilized the $9.1 million from NDOT to fulfill this requirement.

The USDA spokesperson clarified that the termination was specific to Uprise’s case and does not reflect a change in the agency’s broader approach to cost efficiency in broadband projects. “this determination does not have any relation to national initiatives on cost efficiency,” the spokesperson affirmed.

USDA is committed to continuing to work with Lovelock, Pershing County and the state of Nevada in their pursuit of reaching all Nevadans with high-speed internet.

USDA Spokesperson

Legal Battles and Missing Funds

The situation has escalated into a complex legal battle playing out in Washoe County District Court. CommNV, a contractor hired by Uprise to perform trench work on the Lovelock project, has filed a lawsuit against Uprise for non-payment.

Adding another layer of intrigue, Uprise sought a protective order to prevent CommNV from accessing Bank of America records. The company argued that releasing these records would place an undue burden on the bank. However, these records are believed to hold critical information about the flow of the $9.1 million NDOT money after it was transferred from a “pledged account” used to secure the USDA grant. Reports indicate that many of these transactions show the money being transferred to Stephen Kromer,Uprise’s CEO,but its subsequent destination remains unclear.

Uprise argued in court filings that the transactions in question do not mention CommNV and therefore do not substantiate CommNV’s claim to any outstanding payments for work on the project.

NDOT, in its response to CommNV’s lawsuit, claims limited knowledge of the dispute between Uprise and CommNV and denies that CommNV is entitled to payment from the funds NDOT provided to Uprise. As of now, NDOT has not initiated legal action against Uprise to recover the $9.1 million or determine its whereabouts.

Uprise and its attorney have not responded to requests for comment on the unfolding situation. The legal complexities raise significant questions about accountability and the future of broadband expansion in rural nevada.

(Correction: the protection order was for Bank of America records.)

Implications for Rural Broadband in the U.S.

The Uprise Fiber case serves as a stark reminder of the challenges and potential pitfalls in deploying broadband infrastructure in rural America. while federal programs like ReConnect are vital for bridging the digital divide, they also require rigorous oversight and accountability to ensure that taxpayer dollars are used effectively and responsibly.

this incident could lead to increased scrutiny of broadband grant applications and stricter monitoring of funded projects by federal and state agencies. It also underscores the importance of thorough due diligence in selecting contractors and implementing robust financial controls to prevent misuse of funds.

for rural communities like Lovelock,the loss of the Uprise Fiber project represents a significant setback in their efforts to gain access to reliable,high-speed internet. High-speed internet is no longer a luxury; it is a necessity for education, healthcare, economic growth, and overall quality of life. The residents of Lovelock and Pershing county now face an uncertain future as they await a resolution to the legal and financial issues surrounding the failed project.

The Broader Context: Challenges in Rural Broadband Deployment

The Uprise Fiber situation highlights common obstacles in expanding broadband access to rural areas. These challenges include:

• High Infrastructure Costs: Laying fiber optic cables or establishing wireless networks in sparsely populated areas is significantly more expensive per subscriber than in urban centers.
• limited Competition: Rural markets frequently enough lack the competition that drives innovation and affordability in urban areas.
• Regulatory Hurdles: Obtaining permits and navigating environmental regulations can delay projects and increase costs.
• Workforce Shortages: Finding qualified technicians and engineers to install and maintain broadband infrastructure in rural areas can be challenging.

Overcoming these challenges requires a multifaceted approach that includes government subsidies, public-private partnerships, streamlined regulations, and workforce development initiatives. The Uprise Fiber case serves as a cautionary tale, emphasizing the need for vigilance and accountability to ensure that broadband projects deliver on their promise to connect rural America.

Potential Solutions and Future Steps

Despite the setback with Uprise Fiber,the USDA has expressed its commitment to supporting broadband expansion in Nevada. Potential avenues for moving forward include:

• Re-allocating Funds: The USDA could redirect the $27 million grant to other qualified internet service providers with a proven track record of prosperous project implementation and financial management.
• Seeking New Proposals: The agency could issue a new request for proposals (RFP) specifically targeting broadband projects in Lovelock and pershing County.
• State-Level Initiatives: The state of Nevada could explore alternative funding mechanisms and partnerships to support broadband deployment in underserved areas.

Ultimately, the success of rural broadband initiatives depends on collaboration, transparency, and a shared commitment to connecting all Americans to the digital economy.

Key Players	Role	Status
Uprise Fiber	Internet Provider, Grant Recipient	Funding Terminated, under Investigation
U.S. Department of Agriculture (USDA)	Grant Provider, Oversight Agency	Terminated Funding, Conducting Review
Nevada Department of Transportation (NDOT)	provided Initial Funding	Not Pursuing Legal Action (Yet)
CommNV	Contractor	Suing Uprise for Non-Payment
Stephen Kromer	Uprise CEO	Money Transferred to Him, Under Scrutiny

What are the potential consequences of the Uprise Fiber case for future broadband grant applications and projects nationwide?

Archyde Interview: broadband Funding Fallout in Nevada with IT Project Manager, Sarah Chen

Archyde News, April 5, 2025

Following the USDA’s decision to halt a $27 million broadband grant in Nevada, Archyde News spoke with Sarah Chen, an IT Project Manager specializing in infrastructure deployments, to get an expert outlook on the implications and challenges of rural broadband projects.

Understanding the Nevada Broadband Debacle

Archyde News: Sarah, thanks for joining us. Can you give us an overview of what happened with Uprise Fiber and the USDA grant?

Sarah Chen: Certainly. Essentially, a project meant to bring high-speed internet to rural Nevada, notably in Lovelock and Pershing County, has ground to a halt. The USDA terminated its funding of $27 million after an audit revealed several concerning violations, including misuse of funds and failure to meet certain financial requirements. This followed the earlier disappearance of $9.1 million from Nevada taxpayer money initially allocated to Uprise by the Nevada Department of Transportation.

Key Issues: Misuse of Funds and Contract Violations

Archyde News: The article highlighted several specific violations. From your expertise,what’s the significance of these points?

Sarah Chen: The violations are incredibly significant. The failure to meet matching funds requirements suggests a severe lack of financial planning and commitment. duplicated real property purchases and inflated equipment costs are red flags for potential fraud or at the very least, incredibly poor financial management. These are critical when ensuring the financial stability of a broadband project. Without these safeguards, projects are vulnerable.

Archyde News: The article mentions that $9.1 million that was intended to be used as matching funds went missing .Where do you think the money ended up?

Sarah Chen: Without any further details, it’s challenging to say where the money ended up. It is significant to investigate the paper trail of these funds as they were intended for the project.Bank records and auditing must be done.

Implications and Future of Rural broadband

Archyde News: This situation has serious implications for rural broadband initiatives. What are the broader consequences?

Sarah Chen: the Uprise Fiber case serves as a cautionary tale. It highlights the importance of robust oversight, due diligence, and financial accountability. It could lead to increased scrutiny of future broadband grant applications and projects nationwide.Further, rural communities often lack competition, which means that these projects need to be monitored very carefully. Reliable high-speed internet is a modern necessity, not a luxury. And, unluckily, the Uprise setback is a major one for Lovelock and Pershing County.

Archyde News: What do you think are the biggest challenges in deploying broadband in rural areas, and how can these pitfalls be addressed?

Sarah chen: High infrastructure costs, regulatory hurdles, and limited competition are real challenges. overcoming these requires a multifaceted approach: government subsidies, smart public-private partnerships, streamlined permitting processes, and, crucially, strong project management. The key is strong project management that incorporates financial controls.

Looking Ahead: Potential Solutions

Archyde News: The USDA has expressed a commitment to supporting broadband expansion in Nevada. What are some potential next steps?

Sarah Chen: The USDA has options. They could reallocate the funds to other qualified providers. They could issue a new RFP specifically for projects in those affected counties. The state can explore option funding mechanisms. The priority must be finding solutions that connect Nevadans and that ensures an accountable process is in place by the provider.

Archyde News: Do you believe this incident will change the federal government’s approach to funding broadband projects in the future?

Sarah Chen: I think it will absolutely necessitate a reevaluation of current due diligence practices and oversight procedures. The goal, after all, is to foster development, not to stymie it with over-regulation. However, there has to be more aggressive oversight then before.

Archyde News: What advice would you give to other internet providers looking to tackle rural broadband challenges with federal assistance?

Sarah Chen: Thorough planning, rigorous financial controls, and transparency are absolutely critical.Ensure that there is a strong understanding, from the start, of the requirements to comply with federal guidelines.

Archyde News: Sarah, thank you so much for sharing your insights.

Sarah Chen: My pleasure.

Share Your Thoughts

What measures do you think are most crucial now for securing these broadband projects? Share your thoughts and ideas in the comments.