In December, Vice President Joe Biden kicked off $7 billion in the American Recovery and Reinvestment Act broadband grants and loans, a fundamental component of the administration’s effort to jumpstart the economy by fueling the growth of new technologies.

Of those grants, the largest went to a partnership of more than a dozen companies in New York state for a project that will expand an existing fiber optic network and bring broadband to underserved rural communities across three states.

ION HoldCo LLC, a partnership majority owned by Sovernet Communications, along with 12 independent rural telephone companies in New York, received a federal broadband stimulus grant of $39.7 million to augment its existing 2,200-mile fiber network.

The project, the ION Upstate New York Rural Broadband Initiative, will be completed in partnership with the Development Authority of the North Country (DANC) and will enable high-speed Internet access to underserved communities throughout upstate New York, including Cooperstown, Elmira and Buffalo. It will also reach into Pennsylvania and as far north as Burlington, Vt.

An additional $9.9 million will be invested in the project by ION and DANC. The project will also receive a grant of 10 percent of the total project cost through the New York State Innovation Economy Matching Grant Program.

ION will construct 10 new segments of fiber optic, middle-mile broadband infrastructure, adding an additional 1,300-mile network across 70 rural communities. The expansion will bring broadband access to an estimated 250,000 households and 38,000 businesses.

Formal acceptance of the grant is scheduled for 2010 and the project is expected to take two years to complete.