Status Update on MassBroadband123 Operations

As you may be aware, the operator of the MassBroadband 123 network, KCST, Inc., formerly Axia NGNetworks, USA, Inc. (“Axia”), commenced a chapter 11 bankruptcy case on March 22, 2017 with the U.S. Bankruptcy Court, District of Massachusetts, Case No. 17-40501. 

Axia continues to operate the MassBroadband 123 network under contract with the Massachusetts Technology Park Collaboration, d/b/a Massachusetts Technology Collaborative (MTC or MassTech). Axia has obtained a loan from its parent company, Axia Net Media Corporation, to fund operating costs for an initial period while Axia determines whether it will continue to operate the network in the long-term.

MassTech and the Commonwealth continues its work to identify an appropriate long-term solution to this situation, and are committed to ensuring the network's continued operation and protecting the vital services being delivered over MassBroadband 123.

Below are some key milestones in the ongoing legal proceedings:

  • April 25, 2018: The United States Court of Appeals for the First Circuit affirmed a previous decision made by U.S. District Court that AxiaNetMedia continue its obligations under the Guaranty Agreement that it signed with the Massachusetts Technology Collaborative in 2011. Click here to download an audio file of the US Court of Appeals hearing or here to read the Court's judgement and its corresponding order.
  • January 24, 2018: The U.S. District Court affirmed it's order from September 22, 2017, requesting that Axia NetMedia provide the Massachusetts Technology Collaborative with an "Information Access Connection," which provides a critical gateway into the network's operations. MassTech & MBI welcome this finding, as it provides the Commonwealth with an additional safeguard that will ensure MassBroadband 123 continues to deliver its essential services to our customers across the region. Download a copy of the ruling here.
  • September 27, 2017: The U.S. Bankruptcy Court authorized the Network Operator (KCST USA) to use cash generated from operations to continue to operate beyond September 30th using cash generated from operations to supplement its debtor-in-possession financing.
  • May 18, 2017: The U.S. District Court for the District of Massachusetts issued a Preliminary Injunction requiring Axia NetMedia Corporation to ensure the continued operation of the MassBroadband 123 middle mile network under a Guaranty Agreement that it signed with MassTech in 2011. The MBI and MassTech are pleased with this development, as it once again confirms the obligation of the parent organization, Axia NetMedia, to ensure continued operation and funding of the network while its Massachusetts affiliate KCST/Axia, which was awarded a contract to manage and operate that Network in 2011, is in bankruptcy.
  • April 25, 2017: The U.S. District Court for the District of Massachusetts, at the request of MassTech, granted a Temporary Restraining Order against AxiaNetMedia and its subsidiary KCST USA requiring those firms to "perform its obligations under the parties' Guaranty Agreement" with MassTech. Read the full ruling here.
  • March 31, 2017: MassTech launched a public procurement to "obtain responses from qualified companies interested in taking over responsibility for operating the approximately 1,200 mile fiber optic MassBroadband 123 network." From that request for proposals, which closed on May 1, 2017, MassTech received proposals from 7 respondents. These initial responses show that there’s solid interest in managing the network and continuing the delivery of these critical broadband connections to Western and North-Central Massachusetts.
  • March 22, 2017: KCST, Inc., formerly Axia NGNetworks, USA, Inc. (“Axia”), commenced a chapter 11 bankruptcy case on March 22, 2017 with the U.S. Bankruptcy Court, District of Massachusetts, Case No. 17-40501.

MassTech will continue to work to find an equitable long term solution with Axia, including the potential for arbitration, per the terms of the existing contract. In parallel, MassTech will continue to explore all available measures to ensure that there are no interruptions in service on the MassBroadband 123 network, which includes the open procurement to identify qualified network operators (highlighted above), as well as the establishment of contingency plans for a smooth transition to an alternative operator. In addition, MassTech has contracted with Holyoke Gas & Electric (HG+E) as an emergency network operator if necessary.

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QUESTIONS: If you have any questions about your relationship with Axia or service on MassBroadband 123, please contact Brian Noyes at (508) 870-0312 X:293 or noyes(at)masstech.org. We will continue to update this posting as we have additional information.

(Updated April 26, 2018)