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Broadband oversight proposed

CHARLESTON, W.Va. -- The state Public Service Commission already has a say in what West Virginians pay for water, sewer and electric service.

Could high-speed Internet join the list?

State legislators have introduced a bill (SB491) that would allow the PSC to regulate broadband expansion projects -- and the subsequent prices customers pay for their new Internet service.  

The legislation is designed to stop Frontier Communications and other large broadband providers from driving out competition. 

Sen. Dave Sypolt, R-Preston, said several start-up telecommunication companies in Mineral, Hardy and Hampshire counties have tried unsuccessfully to secure funding to expand broadband in the region.

 "Above and beyond lack of funding to expand, the smaller, non-incumbent companies fear predatory pricing aimed at reducing competition, should they make a major investment in their community," said Sybolt, who's sponsoring the bill along with Sens. Robert Beach, D-Monongalia and Bob Williams, D-Taylor. "[The bill] aims to level the playing field for broadband deployment between companies, and at least, puts on the table some talking points for consideration."

Frontier strongly opposes the bill, saying it's unnecessary. The federal government already regulates broadband.

 "Broadband is a fiercely competitive business," said Dan Page, Frontier's West Virginia spokesman. "The stiff competition among providers delivers customers value far more efficiently than government oversight."

Senate Majority Leader John Unger, D-Berkeley, said the PSC probably wasn't the best agency to regulate broadband.

"They're already challenged with water, sewer and electric," Unger said. "The problem is that broadband is an area like the Wild West. Nobody seems to have any oversight."

Frontier competitors, such as Bridgeport-based Citynet, presumably would benefit from the bill.

"We appreciate that the Legislature recognizes that there is a need for expanded broadband infrastructure in the state," said Jim Martin, Citynet's president. "Senate Bill 491 was just introduced, so we have not yet had a chance to review its content or determine its impact."

This summer, the state Broadband Deployment Council plans to start distributing more than $4 million in grant money for high-speed Internet expansion projects in West Virginia.

The bill warns that "incumbent carriers," such as Frontier, could take "defensive actions" and reduce prices temporarily to thwart competitors from securing a share of the grant money.

The Broadband Council is expected to award grants for projects in rural areas where broadband prices are typically high.

"Once competition is eliminated, the incumbents substantially increase their prices," the legislation states. "Incumbents will void grant applications for competitors," according to the bill.

The Public Service Commission could reduce that risk through regulation, according to the bill, which also prohibits companies from charging customers more than $10 per megabit of broadband speed.

State Broadband Council members said they didn't request the high-speed Internet regulation bill.

Lee Fisher, who serves on the council, said he hopes such proposals will spark discussion about broadband expansion in West Virginia.

"Most people think broadband connectivity is as vital as being able to make a phone call," said Fisher, who believes the state should establish a state agency to oversee broadband issues.

The PSC already monitors Frontier's broadband project spending in West Virginia.

In 2010, Frontier agreed to set up a $48 million into an escrow account to expand high speed Internet in West Virginia, provided the PSC approved Frontier's purchase of Verizon's landline business in Wes Virginia. The Public Service Commission signed off on the sale, and Frontier took over Verizon's telephone access lines July 1, 2010.

Frontier cannot withdraw any funds from the special account without Public Service Commission approval.

The PSC has rejected requests from the Communications Workers of America union and the PSC's Consumer Advocate Division to have a say in Frontier's future requests to tap the escrow account.

Under its agreement with the PSC, Frontier also must submit quarterly reports about the company's broadband expansion projects in West Virginia.

Frontier must make broadband available to 85 percent of customers within four years -- another condition the company agreed to before the sale.

Reach Eric Eyre at ericeyre@wvgazette.com or 304-348-4869.

 


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