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W.Va. broadband project nearly finished

$43M of $126.3M in federal stimulus money remains unspent

By Eric Eyre, The Charleston Gazette

CHARLESTON, W.Va. -- A $126.3 million federal stimulus project designed to expand high-speed Internet across West Virginia is nearly finished, but more than $43.3 million remains unspent, according to a report released last week.

State officials reported that Frontier Communications has installed 583 miles of fiber-optic cable to schools, libraries and other public facilities with only seven miles left to install.

Frontier also has finished all but six miles of an 85-mile project that will provide a fiber connection between West Virginia University and the National Radio Astronomy Observatory at Green Bank in Pocahontas County.

Frontier is due about $45 million for the two projects, but had been paid only $9.6 million as of Friday -- even though the fiber construction is 98 percent finished, according to the report.

Frontier is turning in invoices, but state officials overseeing the massive broadband expansion project haven't signed off on the bulk of payments, according to administrators familiar with Frontier's billing.

"The Office of Technology is in the process of working with the grant implementation team to ensure accuracy and documentation of all invoices and payments," said Diane Holley-Brown, a spokeswoman for that office.

A Frontier spokesman declined comment last week, referring questions to the state officials overseeing the federal stimulus project.

Last November, state Homeland Security Director Jimmy Gianato notified the federal government that West Virginia expected to have $9 million left over from the $126.3 million project. At the time, the Office of Technology solicited ideas from companies about how to spend the extra money.

Last week, state officials revised their estimate, predicting that $4 million will remain unspent.

With the stimulus funds, Frontier is bringing high-speed fiber to 630 "community anchor institutions" -- schools, libraries, jails, 911 centers, health clinics, county courthouses, planning agencies and other government facilities.

Frontier has finished installing fiber to all but 15 of those sites, according to the report.

Holley-Brown said Frontier doesn't bill the state until the company finishes fiber construction at each location.

The company also hasn't submitted any invoices for the Green Bank observatory project, even though it has completed four of five segments.

"A large proportion of the Frontier fiber builds has been invoiced, and some of those are being processed for payment," Holley-Brown said. "However, . . . they do not submit the invoice until all work on that specific build is completed."

West Virginia had an initial Feb. 13 deadline to spend the $126.3 million or risk having to return any leftover funds. However, state officials requested -- and received -- an extension from the federal government. The stimulus funds now must be spent by September.

In West Virginia's application for the stimulus funds, state officials said Frontier would build 900 miles of fiber. The project was scaled back after the state discovered that many sites scheduled to receive high-speed fiber already had it.

Last year, a consulting firm hired by Gov. Earl Ray Tomblin's administration issued a memo that criticized Frontier for "inadequate project documentation" that fails to comply with federal grant rules. Tomblin's office kept the memo under wraps for months.

The consultants -- ICF International of Vienna, Va. -- called on Frontier to take "corrective actions" and advised state officials not to reimburse Frontier for "current invoices and design."

Last month, Tomblin aides said they met with Frontier executives, and the company now submits proper invoices and documentation. The state also has "a process in place" to ensure that Frontier doesn't over-bill, according to Tomblin's office.

Frontier executives have called ICF's report "worthless."

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