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Statewide broadband project's fiber costs escalate

By Eric Eyre, The Charleston Gazette

CHARLESTON, W.Va. -- West Virginia is spending nearly three times more than it expected for every mile of fiber-optic cable being built as part of a statewide high-speed Internet expansion project funded by the federal stimulus, according to a report.

State officials estimated the fiber network for schools, libraries, health clinics and government buildings would cost $17,000 per mile. But the state is spending $47,500 per mile for fiber construction.

In the end, West Virginia will wind up with 25 percent less fiber than expected -- 675 miles instead of the 900-mile network initially promised. The project's cost, however, hasn't changed.

In an annual report posted online last week, state Homeland Security Director Jimmy Gianato blamed the rising fiber costs on "storms in late 2012" -- presumably Hurricane Sandy, which caused an estimated $14 million in damage across West Virginia. The state's report also cited environmental studies for the fiber construction's higher costs.

The previous year, state officials blamed fallout from the 2011 Japanese earthquake and tsunami for a sharp spike in fiber prices. Fiber became scarce amid the increase in demand, and West Virginia spent $50,000 for every mile of fiber that year, according to the 2011 annual report.

Frontier Communications has the contract with the state to install the fiber. Fiber construction typically costs about $20,000 per mile, according to industry studies.

Officials with Gov. Earl Ray Tomblin's administration would not immediately comment last week, but said they would answer questions about the fiber costs Monday afternoon. Gianato did not respond to a request for comment.

In 2010, West Virginia received a $126.3 million federal stimulus grant to bring high-speed fiber to more than 1,000 "community anchor institutions" -- schools, libraries, health centers, county courthouses, jails, 911 centers, planning agencies and other public facilities.

Federal and state officials initially announced that the state would build a 2,400-mile fiber network. But they later acknowledged the number was a "clerical error," and that a 900-mile network was in the works.

Months later, state officials discovered that many of the community facilities already had fiber. The state Office of Technology scrambled to find new sites that wanted high-speed fiber.

The state now plans to provide new fiber service to 630 sites -- about half of the 1,064 locations initially scheduled to receive the high-speed cable.

Earlier this month, Frontier finished installing 590 miles of fiber to the public facilities. The company also has completed 81 miles of an 85-mile fiber network that will connect West Virginia University to the National Radio Astronomy Observatory at Green Bank in Pocahontas County.

Even though fiber construction is nearly finished, $42.7 million of the $126.3 million remains unspent. State officials have said they have a backlog of Frontier invoices that haven't been processed. Frontier is due about $45 million for the project, but has been paid only about $10 million. Frontier declined to comment last week.

Also last week, state Chief Technology Officer Gale Given reiterated that grant funds would likely be leftover once construction is complete. She declined to estimate the amount of unspent funds. Previous estimates ranged from $4 million to $8 million.

The stimulus money earmarked for the broadband expansion project must be spent by Sept. 30, or the state will have to return unspent funds to the federal government.

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