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W.Va. to disclose unspent funds from stimulus broadband project

CHARLESTON, W.Va. -- In the next week or two, West Virginia officials will determine how much money will be left over from a $126.3 million federal stimulus grant to expand high-speed Internet across the state, Broadband Deployment Council members learned Wednesday.

For months, Broadband Council members have pressed state officials to estimate the amount of unused funds that will be available after the broadband project is finished.

Telecommunication industry sources have said that $25 million to $50 million could be left over.

"There has to be a ton of money out there," said Lee Fisher, a West Virginia Broadband Council member.

At Wednesday's council meeting, John Dunlap, a state Office of Technology administrator, declined to estimate the expected amount of leftover stimulus funds. But Dunlap said a figure would be available within two weeks.

Fisher said it's imperative that Gov. Earl Ray Tomblin be told as soon as possible how much money will be left over, so the governor can petition federal officials to reallocate any unspent funds for other broadband expansion projects in West Virginia.

"The governor has the right to ask that this money be reprogrammed," Fisher said. "I would like to see the council get some of that money."

In 2010, West Virginia received a $126.3 million federal stimulus grant to install fiber-optic cable and bring high-speed broadband to more than 1,000 "community anchor institutions" -- mostly schools, libraries and health clinics.

The state has scaled back the project significantly. Fisher noted that the state's initial broadband project proposal was for 2,400 miles of fiber. The current plan calls for 567 miles of fiber.

So fiber installation costs alone should drop from about $60 million to $14.1 million -- a $39 million savings.

But Broadband Council Chairman Dan O'Hanlon said other project construction-related costs were higher than expected, which could drive down the amount of leftover stimulus funds.

"The environmental assessment costs were a lot more than anybody ever dreamed," O'Hanlon said Wednesday.

The state budgeted about $78 million for construction costs and $56 million for equipment under the federal economic stimulus grant.

So far, the state has spent $39.3 million in stimulus funds for equipment, but only $5 million for construction. 

Frontier Communications, which is installing the fiber, has been paid $330,000 out of the grant funds. Frontier government affairs manager Scott Cosco told Broadband Council members Wednesday that the company's billing on the statewide project was "current."  

In response, Fisher said it doesn't make sense that Frontier would have been paid only $330,000, considering the company already has already installed 343 miles of fiber, which would cost about $8.5 million. 

"If Frontier's billing is current, there has to be a lot of invoices sitting on somebody's desk in the state," Fisher said.

Asked about the invoices later Wednesday, Frontier spokesman Dan Page said, "We have provided the state invoices on an ongoing basis in accordance with the procedures we received from the grant implementation team."

The Broadband Council has requested that state officials give a report about any projected unspent stimulus funds at the group's next meeting July 25.

The state must complete all broadband expansion projects and spend the stimulus money by February or risk losing unused funds.

"If the governor is going to have any input, he needs to know how much money is unused," Fisher said. "I don't want things to drag along, and we have to give the money back."

Earlier this month, U.S. House Republicans asked the Department of Commerce's inspector general to investigate West Virginia's use of the $126.3 million stimulus grant.

The request followed a series of Charleston Gazette reports that raised questions about the state's decision to purchase more than 1,000 Internet routers at $22,600 each. The state is installing the routers primarily in rural schools and libraries, even though the "enterprise-class" devices were designed for universities, medical centers and large corporations. State officials have defended the $24 million purchase.

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


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