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12/12/2013
Auditing final part of broadband project could answer questions...

The Herald Dispatch

West Virginia state audi­tors have delved into - and found problems with - two aspects of a $126.2 million project to expand availability of high-speed Internet in the state. Considering the continuing questions, charges and countercharges connected with the remaining part of the initiative, they might as well take a close look at it, too.

The state received federal stimu­lus money for the broadband initiative in 2010. The project involved laying hundreds of miles of fiber-optic cable, with access provided to community facilities such as schools, libraries and local government buildings; purchasing Internet routers to serve those "community anchor institutions"; and constructing communications towers.

The Legislative Auditor's Office has conducted audits on two parts of the project and uncovered problems in both. In separate reports, it concluded that the state spent about $15 million more than necessary on the Internet routers because they had much more capacity than was required and that the state bypassed purchasing laws when it paid about $38 million on communications towers.

The issue that lingers is whether more than necessary was spent on building the fiber-optic cable network, which Frontier Communications received the contract to do. That was the subject of a legislative interim meeting this week of the joint Committee on Technology.

State Chief Technology Officer Gale Given told the committee that Frontier estimated in the early stages of the project it would build 900 miles of fiber at an expected cost of $42 million. However, Given explained that Frontier trimmed down the number of miles of fiber to 675 so that it would not install the fiber in areas where it already was present, according to media reports on the committee meeting.

What lawmakers wonder is why Frontier says the project still cost the full $42 million and why the state plans to pay Frontier that much.

Those seem like fair questions.

Given said the state had estimated the project would cost about $47,000 per mile, but the cost has now turned into about $57,000 per mile, a 21 percent variance.

In explaining that gap, Frontier has cited various factors. One was running into some unexpected costs tied to the "mountainous terrain" on the 85-mile stretch of fiber built to the National Radio Astronomy Observatory in Greenbank. But state officials, including Given, noted in a letter earlier this year that stretch was always a part of the project. Frontier also said that it was required by the grant conditions to pay "prevailing wage," which it said increased labor costs by about $7.5 million. However, Given told the committee this week that she assumed prevailing wage costs were included in the initial estimate.

Lawmakers on the Committee on Technology complained that they have requested detailed engineering maps to verify exactly how many miles of fiber were built, but so far have not received them.

After the meeting, Legislative Auditor Aaron Allred declined to comment to The Charleston Gazette as to whether his office was reviewing the fiber project. We trust that either his office is doing so already or will soon undertake such an examination. It would be good to determine one way or another whether taxpayers got their money's worth.
 

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