(Dominion Post (Morgantown, WV) Via Acquire Media NewsEdge) Nov. 28--Bridgeport-based Internet service provider Citynet contends the state is misspending a $126 million federal stimulus broadband grant by promoting a business monopoly with no benefit to residents or commerce.
It wants the grant suspended and redirected.
The state has "clarified" that the grant won't benefit the 700,000 households it originally claimed, but still maintains the grant is a good thing.
Citynet has appealed to the National Telecommunications and Information Administration (NTIA). Meanwhile, it and Frontier -- which will receive an estimated $30 million from the grant to expand its Internet infrastructure -- are marshaling their arguments for a Dec. 15 presentation to the state Broadband Deployment Council.
According to state and NTIA documents, the Broadband Infrastructure Project will add about 2,400 miles of Internet fiber optics, via Frontier, "to directly connect more than 1,000 anchor institutions, including public safety agencies, public libraries, schools, government offices. ... The project intends to spur affordable broadband service impacting more than 700,000 households, 110,000 businesses and 1,500 anchor institutions, by allowing local Internet service providers to connect to the project's open network."
The grant's goal is to aid unserved and underserved rural areas, the doc- uments say. In an October 2009 letter to the NTIA, former Gov. Joe Manchin said these are places "the private sector has not gone and will not go" because of geographic obstacles, but if the project funds the "initial infrastructure" private providers will be more likely to offer service.
In letters to the NTIA, Citynet President and CEO James R.J. Martin II said the state's plan poses a number of problems:
It won't benefit 700,000 households or 110,000 businesses, only the 1,500 anchor institutions. Former state Commerce Secretary Kelley Goes admitted this to the Broadband Council recently.
The plan is focused only on state agencies and won't create any jobs.
Because the money goes toward an existing contract with Frontier to extend service to the agencies, it won't leverage private sector investment or create an open network. Frontier's fees for access to its system are so high -- $10,000 a month in Philippi compared to $300 a month in Pittsburgh -- the grant, in effect, prices its smaller competitors out of the market.
The plan takes a wrong approach to Internet infrastructure. It claims to be "middle mile" but is really "last mile." Last mile refers to the last leg of wiring connecting a user to the system. Middle mile refers to the infrastructure backbone of a system.
Citynet illustrates its point with two maps. One shows the state-Frontier plan -- little red dots all over the state reflecting "isolated fiber extensions" to schools and such. The other shows Citynet's idea -- a web of blue lines that would be the backbone to extend service to the state's unserved and underserved areas.
Underserved means areas where at least half of all households lack broadband, or where fewer than 40 percent subscribe to broadband, or where no service provider advertises broadband speeds of at least 3 megabits per second (mbps), according to the NTIA.
Frontier's definition of high speed isn't high. According to maps by consultant L.R. Kimball, much of the state has broadband access at speeds of 768 kilobits per second (.768 mbps, the minimum broadband speed). Slightly more has access to speeds up to 3 mbps. Only about half the state has access to 6 mbps speeds.
Various sources report watching a streaming Netflix movie calls for a minimum 1.5 kpbs; 3 kpbs is acceptable, though the quality can be poor. For high-definition movies, a few said even 10 mbps is problematic.
West Virginia ranks 33rd among the 50 states for connection speed, averaging 4.6 megabits per second (mbps), according to a report released by the Communication Workers of America; the national average is 5.1 mbps.
Martin sums it up, "The grant will primarily benefit Frontier Communications and in the end cost the state of West Virginia more money for state entities to access highspeed Internet.The grant funds will also impede competition in the state for residents and businesses, which will increase cost and impair quality."
Martin said, after the state channels this funding to Frontier, "what happens when the contract stops? Will the state rebid it?
"No one's going to be able to compete because they can't make the capital investment Frontier got for free."
Frontier, officials respond
The NTIA said Friday it has received Citynet's complaints and a letter from the state, and is preparing a response. Frontier and Citynet both applied for stimulus grants, which were denied. Citynet proposed a $34.5 Internet backbone project. Frontier's $40.6 million proposal refers to anchor institutions.
In August, Ken Arndt, Frontier's Southeast Region president, told a legislative committee that Frontier plans to spend $310 million in the next three years to install 2,429 miles of fiber-optic cable and expand broadband access to areas without it.
This year, he said, Frontier plans to add 190 switching offices to provide service to 50,000 households. In 2011, it will add 500 sites, extending service to another 100,000 households. Frontier is aiming for 85 percent household access in three years. Frontier even has a program to provide free computers to some of the 35 percent of state households that don't have one, just so they can get on the Internet.
While Manchin and Goes -- both champions for the stimulus grant -- are both gone from state government, others are standing by it.
U.S. Sen. Jay Rockefeller, DW.Va., who chairs the Committee on Commerce, Science and Transportation, has been a broadband advocate and also championed the grant.
"Building West Virginia's technology infrastructure and making sure every corner of our state has dependable, advanced Internet service has long been a priority for Sen. Rockefeller," spokeswoman Briana Warner said.
Gov. Earl Ray Tomblin said, "I fully support the $126 million in broadband grant funding that was awarded to the state by the NTIA earlier this year. ...
"Broadband will continue to be a significant portion of expanding the state's infrastructure and I am confident that state officials will continue to work diligently to ensure that this broadband project is carried out in accordance with all grant requirements."
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