The Denver District Court has rejected Elevate Fiber’s attempt to have an initial Broadband Deployment Board grant reinstated for high-speed service to west Hotchkiss.

The decision, issued in late November and announced Jan. 7, favors TDS Telecom of Delta County and brings to an end nine months of appeals by Delta-Montrose Electric Association on behalf of Elevate, its wholly owned subsidiary.

“We respect the court’s decision, but the result is bad for rural broadband deployment in Colorado,” Kent Blackwell, chief technology officer for DMEA and Elevate, said in a provided statement.

“The court acknowledged many issues with how this grant was reversed, but ultimately, decided to defer to the broadband board as the governmental agency. In the end, it’s the citizens of west Hotchkiss who lose.”

The state had previously awarded two grants, totaling $4.1 million, to Elevate to fund high-speed internet projects in northeast Delta, southeast Crawford and west Hotchkiss/west Spring Creek.

But last spring, the state rescinded the portion of the grant awarded for the Hotchkiss project, after TDS Telecom successfully appealed the award, on the basis that its parent company, Delta County Tele-Comm Inc., is the incumbent local exchange carrier and broadband provider.

TDS said Elevate was not going into an “unserved” area, as was required for the grant funding, which is intended for areas where high-speed internet service is lacking, and in areas where such service is not already supported by federal funding.

TDS was already receiving federal funds to install broadband in the area and, the company said, some homes in west Hotchkiss were already receiving adequate broadband.

The Broadband Deployment Board found west Hotchkiss had access to service levels of at least 25/3 megabits per second. DMEA was eyeing 1 gig service for the project area and contended TDS customers there were not receiving services of at least that level.

The board in rescinding the grant denied DMEA $961,381 for west Hotchkiss, but left intact other requests, including $738,618 for west Spring Creek.

DMEA took the state’s decision concerning west Hotchkiss to court.

The Denver District Court found that the broadband board did not violate state law when it considered the evidence presented on appeal concerning post-application developments.

DMEA and the Broadband Deployment Board differed on the application of the statutory language “at the time of the application.”

The board held that the language applies to “overbuilding” — providing a broadband network to households that, at time of application, have access to such a network or have received federal support to provide such access, and account for 20 percent or more of the total households to be served. The board said the language regarding the time of application does not also apply to “unserved” areas, and the district court declined to limit the board’s consideration of the overbuilding provision.

The legislative intent is clear, the November ruling said, also calling DMEA’s argument “contrary to public policy.”

The broadband board had sufficient evidence to grant TDS’ appeal and rescind the grant and did not violate the Colorado Administrative Procedure Act by doing so, the court found.

The court also deferred to the broadband board’s discretion on accepting internet speed tests for west Hotchkiss. It also did not agree there was inconsistent data concerning the percentage of homes served and accordingly, the board “did not commit reversible error.”

The board’s decision did not have to be supported by all available evidence, but only by sufficient evidence, which the court determined had in fact occurred.

The district court’s ruling concludes with a finding that the broadband board was not arbitrary and capricious in its decision.

“There is an opportunity to appeal, but at this point we think it might be more productive to direct our energy and resources to legislative solutions that ensure rural Colorado gets the broadband access that is vital for work, education and telemedicine,” said Blackwell.

“It (the ruling) is unfortunate,” DMEA board president Bill Patterson said. “We’re not going to stop deploying our fiber optic network out to everybody, but it’s another delay in the process.”

Katharhynn Heidelberg is the Montrose Daily Press assistant editor and senior writer. Follow her on Twitter, @kathMDP.

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