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02/29/2012
Bill has Internet service providers at odds

by Ry Rivard
Daily Mail Capitol Reporter

CHARLESTON, W.Va. - A bill aimed to expand the availability of high-speed Internet access in West Virginia has Citynet and Frontier again at odds, with unions and rural lawmakers also taking sides in the skirmish.

The bill, backed by Citynet, would give the state Water Development Authority the power to give grants or loans to telecommunication companies to build "middle mile" broadband projects, which are essentially trunk lines for the high-speed fiber optic cables that carry digital information.

Frontier supporters, including unions, are lining up to challenge the bill. They say the bill will allow Citynet to grab public money to compete with Frontier, which has cornered some segments of the market, in part because of a previous government grant.

The bill, which was quietly introduced two weeks ago, emerged as a point of contention beginning sometime Monday evening, spilling into a series of huddles with lawmakers and lobbyists on Tuesday.

House Majority Leader Brent Boggs, D-Braxton, told both sides to try to sort things out by today. Under legislative rules, the bill would need to pass the House today to be considered by the Senate before the end of the 60-day regular session, which ends March 10.

Citynet officials have long contended Frontier received tens of millions of dollars from a federal grant for a broadband project that will only benefit Frontier Communications because, once connected, state agencies and anyone else who wants to connect to Frontier's network will have to pay Frontier's going rates.

Frontier has repeatedly said it will abide by all federal requirements and the state's contract to fulfill the goals established by the federal government.

Citynet lobbyist Tom Susman said it would be unfortunate if the debate over the bill got framed as an extension of the Citynet, Frontier fight that began a few years ago. He said the state's economic future depends on broadband being widely and cheaply available in the state.

"People don't want to admit it, but in some ways this could be our new workers' compensation - if we don't get the prices down, it could be tough," Susman said, referring to an old workers comp system that once drove off or kept out businesses.

Delegate Mitch Carmichael, R-Jackson, is a Frontier employee. He tried to get the bill taken off the House agenda and said it would have a chilling effect on private investment.

"A private company has invested $300 million in private capital to provide middle mile and now you've got this proposed bill that allows private companies to receive public taxpayer monies to build another parallel network," Carmichael said.

Carmichael said the bill would hurt Frontier's union workforce.

"It will cost union jobs because the taxpayers will be funding non-union companies with public money," he said.

Frontier has a collective bargaining agreement with workers. Citynet does not.

Elaine Harris, who represents the local Communications Workers of America union, said the union has concerns with the bill.

Citynet President Jim Martin said the goal was simply to leverage public money to create an open access network. He compared the existing system to a monopolistic railroad - one that is now partially controlled by Frontier. But Martin said Frontier's network was not fast enough and his goal is to build a faster information highway anyone can use.

"They are trying to protect their markets because they know no one else will build to those markets," Martin said.

Chris Morris, another Citynet lobbyist, said the state needs to step in to help other companies build faster networks that can be used by other companies cheaply. The bill would reserve some part of the cable for the company that builds it and some for the state and also allow competing companies to send information across the cable cheaply.

"If we keep doing what we're doing, we'll keep getting what we've got," he said.

Right now, there is no money set aside for the bill. The bill also prohibits money earmarked for water or sewer projects to be used for broadband. Currently, the Water Development Authority handles only water and sewer grants and loans.

Larry Williams, D-Preston, said Frontier is not doing a good enough job with its existing assets and suggested that company alone could not be counted on to provide broadband to the whole state.

"I know Frontier is supposed to do it, but there is so much more left to do, I'd be surprised if they can do it in a timely manner," he said.

He said the bill was received in the House's caucus of rural lawmakers.

Delegate Daniel Hall, D-Wyoming, remains concerned the broadband projects could eventually take money from water and sewer projects.

"I don't think it's wise to say we'd support broadband when we've still got communities without water," Hall said.

The state needs about $3.6 billion to connect every West Virginian to a public water supply and public wastewater system and to deal with overflowing sewers.

Contact writer Ry Rivard at ry.rivard@dailymail.com or 304-348-1796. Follow him at www.twitter.com/ryrivard.

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