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Telecom Co-op Suing Rival For $20 Million

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FCC

Millions of dollars are at stake in a lawsuit pitting rival South Dakota telecommunications cooperatives against each other.

The plaintiff is Venture Communications in Highmore. The cooperative serves parts of central and eastern South Dakota.

Its territory overlaps with James Valley Telecommunications in Groton, and James Valley’s subsidiary, Northern Valley Communications.

Venture competes with James Valley and Northern Valley for grants and loans from the federal government's Connect America Fund. The federal money helps extend high-speed internet to customers who don’t have it.

And that’s the source of the conflict.

Venture Communications alleges that James Valley and Northern Valley intentionally misrepresented information on a form submitted to the federal government. James Valley and Northern Valley allegedly said they provide sufficient levels of high-speed internet in an area where they actually don’t.

That alleged misrepresentation prevented Venture from receiving federal funds to extend high-speed internet into the same area, according to the lawsuit. Venture alleges that it lost out on $20 million in federal funding over a decade. That’s the amount Venture is seeking in the lawsuit.

The lawsuit alleges the actions by James Valley and Northern Valley were “intentional, deliberate and malicious.”

James Valley and Northern Valley deny the allegations. They asked a judge to dismiss the lawsuit. The judge is dismissing two of Venture’s counts but allowing two others to continue.

An attorney for James Valley and Northern Valley provided SDPB with a written statement. It says the providers “have little doubt that once the facts are fully known the court will agree that Venture’s remaining claims are equally meritless."

Venture’s attorneys did not respond to messages.

-Seth Tupper is SDPB's business and economic development reporter.

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