BY ANDREW FAISON/CONTRIBUTING WRITER
andrew.faison@tidewaternews.com

WASHINGTON, D.C.—The federal government has ordered a South Hill company to stop working on a wireless, high-speed Internet system for 15 south-central Virginia counties, including Southampton and Isle of Wight counties.

The National Telecommunications & Information Administration also has asked Buggs Island Telephone Cooperative for its latest financial records and staffing plan to ensure it will provide the service, said agency spokeswoman Heather Phillips.

“We found that the grantee was not making adequate progress in meeting its milestones, in part due to technology issues it is still working out,” Phillips said.

Buggs Island received an $18.9 million federal stimulus grant to build the system and has spent $15.1 million, according to a quarterly report filed on Sept. 30 with NTIA when the project was 80 percent complete.

The agency could terminate the grant completely after 60 days.

Repeated phone calls to Buggs Island were unreturned.

Buggs Island was expected to launch the service on Sept. 15, but the company indicated its equipment has continued to interfere with a cellular phone company’s equipment.

Buggs Island also received $3.9 million from the Virginia Tobacco Indemnification and Community Revitalization Commission for the $23 million system.

Southampton County Administrator Mike Johnson had heard the grant might be suspended.

“At this point I do not have the details because I have not been in contact with the company,” Johnson said.

Buggs Island plans to charge a minimum residential service fee of $37.95 a month for 1.5 megabits per second; the maximum will cost $54.95 at 4 megabits per second. Included in the fee is a $3 monthly equipment rental.

In addition, the company planned to provide the same level of service to businesses at a cost of $48 a month and pay up to $84.95 a month for 4 megabits.

Up to 10 megabits per second will be available for businesses.

It would cost $119.99 for homes and businesses to hook up to the system, and users would be required to sign a two-year contract.