Frontier: $690K to duplicate broadband network ‘not appropriate’
Over strong objections from Frontier Communications, a West Virginia state board plans to spend $690,000 to put fiber-optic cable in Randolph and Pocahontas counties, even though the project would duplicate an existing network owned by Frontier.
On Wednesday, the West Virginia Broadband Deployment Council voted 3-2 to award the money to West Virginia Network, or WVNET, a state agency that provides Internet service to schools, universities and other public facilities. WVNET would own the three-segment fiber network that would connect Snowshoe to Cass, Valley Head to Mill Creek, and Durbin to Green Bank.
Frontier already has high-speed fiber lines that connect those communities.
“To use taxpayer money to overbuild existing facilities is not appropriate, particularly in a state that has budget issues,” said Dana Waldo, who oversees Frontier’s West Virginia operations and sits on the Broadband Deployment Council. “What the outcome would be is to build fiber where existing fiber is already in place.”
However, council member Jim Martin said Frontier’s fiber isn’t “open access” — available at a significant discount to competing Internet providers, such as Martin’s company, Citynet.
Last year, the state used $8 million in federal stimulus money to run fiber between West Virginia University and the National Radio Astronomical Observatory at Green Bank. Internet providers can tap into segments built with stimulus funds in the region, but they must pay Frontier to use additional segments the company owns.
“Frontier is the only provider in the region, and there is no open access to that infrastructure,” Martin said. “You can’t really connect any of the dots [communities] together . . . . We can hopefully connect those rings and enable broadband expansion in the area.”
Earlier this year, the Broadband Deployment Council awarded more than $717,000 in state funds to Citynet for a project that would expand high-speed Internet at Snowshoe Mountain Resort. Frontier already provides broadband service at the resort.
On Wednesday, council members circumvented past practices for awarding grants and bypassed rules stipulated in state law. In past years, the council has solicited grant applications, scored proposals, reviewed projects and voted on awarding state funds.
At Wednesday’s meeting, Martin made a motion to award all of the council’s remaining funds — $690,000 — to build the duplicate fiber network in Pocahontas and Randolph counties. The specific project proposal wasn’t on the council’s agenda. WVNET hadn’t applied for the grant money.
The Broadband Council previously awarded grant funds only to “last-mile” broadband projects that made high-speed Internet available directly to homes and businesses.
“This proposal is obviously outside the bounds of what we set up as a council, in terms of grant funding,” Waldo said. “This goes against, at least, the spirit of what the council has been doing in the past.”
Later, Waldo made a motion to return the $690,000 to the state General Revenue Fund, but his proposal died because no one seconded his motion.
Only five members of the 15-member Broadband Deployment Council voted on the Pocahontas/Randolph fiber project. Eight members were present for Wednesday’s meeting.
Council Chairman Dan O’Hanlon, who also serves as WVNET’s executive director, and Jan Fox, a Marshall University administrator, recused themselves from the vote. Council member Charles Lorensen, who is Gov. Earl Ray Tomblin’s chief of staff, attended the meeting via telephone but did not vote. A Tomblin spokesman said Lorensen didn’t listen in during the entire meeting.
The council’s lawyer, who also called in to the meeting, said Wednesday’s vote stood because the Broadband Deployment Council had a quorum, with eight members attending in person or on the phone.
About 40 miles of fiber cable — at an estimated cost of $1.2 million — would be required to connect the six communities in Pocahontas and Randolph counties. The $690,000 would pay for about 23 miles of fiber. It’s unclear where WVNET would get the remaining $530,000 to complete the project.
The Broadband Council has no money left and is scheduled to disband Dec. 31.
Martin said the 40 miles of fiber would connect fiber segments built with federal stimulus funds in the region. The entire fiber network in Pocahontas and Randolph counties would be available for companies that compete against Frontier. Martin predicts the project will improve Internet service and drive down prices for consumers.
“It would be fantastic if we could connect all that together,” Martin said.
Late Wednesday afternoon, a source familiar with the council’s finances said the group may have substantially less than $690,000 in its accounts to distribute. The exact figure won’t be available until Thursday.
Also Wednesday, Waldo criticized a statewide “Broadband Strategic Plan” released this week. He said the plan seems to advocate government control of broadband service in West Virginia.
“The progress that’s been made in the state is because of the private sector,” Waldo said. “I am concerned that this plan is trying to take . . . control away from the private sector and place it in the hands of a bureaucracy.”
Reach Eric Eyre at email@example.com or 304-348-4869, or follow @EricEyre at Twitter.