CHARLESTON, W.Va. -- West Virginia's largest Internet provider is questioning whether the state Broadband Deployment Council should distribute $3.15 million in grants next week to make broadband service available to an estimated 2,600 homes in rural communities.
The $1,200-per-household cost is about $500 more than what a federal grant program spends to subsidize broadband expansion in rural areas. One Pocahontas County broadband project recommended for state funding would cost about $10,000 per household.
"Clearly West Virginia taxpayers have an interest in the prudent use of their funds," said Frontier Communications executive Dana Waldo, who also serves on the Broadband Council. "Cost should be a concern."
Waldo also predicts the grants could discourage private investment. Telecommunication firms might choose not to expand broadband service on their own, if they believe the government plans to subsidize competitors, he said.
"State code cautions that the council should respect market forces and avoid duplicating or displacing existing service or getting involved in projects where companies will serve the market in the reasonably near future," said Waldo, senior vice president and general manager of Frontier's West Virginia operations.
But council member Lee Fisher, a Braxton County farmer, said Frontier's objections shouldn't stop the board from handing out grants to the company's competitors next week.
Fisher said West Virginia law requires the governor-appointed council to find ways to bring broadband to the state's most rural communities.
"People in rural parts of the state deserve that service," Fisher said. "The council was put in place to determine how to get service to these people."
Fisher noted state law and council rules don't set a per-household limit on broadband project costs. He said West Virginia's broadband construction costs top most states because so many people live in rural areas here.
"The per-household cost is always going to be higher because you don't have many urban areas, and you don't have as many households to put into the bottom of the equation," Fisher said Monday. "You just don't have as many people in West Virginia."
The Broadband Deployment Council never attached any stipulations about project costs when it solicited grant applications from telecommunications firms and nonprofit organizations.
"Cost per household is obviously something you look at, but the council, from the beginning, made it clear that anybody was open to apply," Fisher said.
A Broadband Deployment Council grant review committee has recommended that board members distribute $3.15 million for 14 projects -- a dozen of which would provide Internet to rural households via wireless towers. The other two projects would offer broadband through telephone wirelines.
Wheeling-based StratusWave Communications, Buckhannon-based 3Wlogic and Spruce Knob-Seneca Rocks Telephone Inc. have applied for grants.
The projects' costs range from $740 to $10,000 per household.
The council, which meets Dec. 12, also is expected to award $923,000 for four projects designed to increase demand for high-speed Internet in rural areas.