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07/28/2014
Broadband council likely can’t pay for expansion

By Eric Eyre, Staff writer, The Charleston Gazette

A project designed to create a state-owned fiber-optic network and bolster high-speed Internet service in Pocahontas and Randolph counties was in jeopardy late last week, after the West Virginia Broadband Deployment Council learned that it likely doesn't have the money to pay for the expansion.

Earlier in the week, council members voted 3-2 to spend the governor-appointed group's remaining funds and put fiber cable across the two counties, even though the project would duplicate an existing network owned by Frontier Communications. West Virginia Network, or WVNET, a state agency that provides Internet to schools, libraries and universities, would own the fiber network.

On Friday, however, state Department of Commerce officials told the Broadband Deployment Council not to distribute any leftover funds for the project.

State officials and a consultant discovered that the council has only $329,000 in its account — not the $690,000 estimated earlier in the week — and those remaining funds will likely be drained by consulting fees and legal expenses.

"We believe the council should not commit the funds to WVNET..." state GIS coordinator Tony Simental wrote in an email distributed Friday.

WVNET had planned to solicit bids for construction of a three-segment fiber network that would connect Snowshoe to Cass, Valley Head to Mill Creek, and Durbin to Green Bank.

Frontier already has high-speed fiber lines that connect those communities. But Frontier's critics have said the company's fiber isn't "open access" — available at a significant discount to competing Internet providers.

Only five members of the 15-member Broadband Deployment Council voted to approve the project Wednesday. Two members recused themselves, and a third member listening to the meeting on the telephone also didn't cast a vote.

Council member Elaine Harris, who voted against the project, said Friday she was blindsided by the proposal.

"We shouldn't have been voting on this," Harris said. "The nuts and bolts of this are not there."

Council members received nothing in writing about the 40-mile fiber project last week: No finance plan, no budget, no maps. WVNET never applied for the money.

The council's grant review subcommittee also never received anything about the project. In past years, the council solicited grant applications, scored proposals and reviewed projects — using a consultant and subcommittee — before voting to award funds.

Citynet CEO Jim Martin, a council member, presented the project to the council for the first time Wednesday, and board members voted to approve it minutes later. The council's agenda stated only, "Discussion/allocation of remaining Broadband Council funding."

"I'm a taxpayer, and as a member of that board I represent taxpayers, and the way that was conducted was clearly, clearly wrong," Harris said. "They thought they had $690,000, and they just wanted to wipe it out."

Martin said Broadband Deployment Council members had to act swiftly because the council is set to disband Dec. 31.

"There simply was not sufficient time to utilize the lengthy application and approval process for this project," Martin said. "As the majority of the council recognized, it was best to utilize the council's assets for the betterment of West Virginia rather than return the funds to the state."

Martin said Friday's disclosure that the council doesn't appear to have the money right now to pay for fiber construction in Pocahontas and Randolph counties wouldn't necessarily kill the project.

Previous grant recipients might return unused council funds, he said.

"It takes council action to kill it," Martin said. "Remember, the motion [and vote] was to provide all remaining money. If the current grants don't use their money, then it goes to this new project."

Harris said Martin should have stepped aside from the brief discussion and vote last week, saying Martin and his company, Citynet, stand to benefit financially from the fiber project in Randolph and Pocahontas counties. Martin said Citynet hasn't decided whether to bid on building the fiber network.

"It's a clear conflict of interest," Harris said. "Did Jim Martin recuse himself? No, and it's wrong."

Martin said he had "no reason" to step aside from last week's vote.

"The project approved by the council is for the benefit of all broadband providers, including Frontier," Martin said.

Harris works as a lobbyist for the Communications America, which represents hundreds of Frontier employees.

"I would suggest that Ms. Harris' assertions stem from bitterness over the potential for competition rather than any legitimate reason.

Earlier this year, the Broadband Deployment Council awarded more than $717,000 in state funds to Citynet for a project that would expand high-speed Internet at Snowshoe Mountain Resort. Citynet plans to connect that project to the WVNET fiber segments.

Martin stepped aside from the vote on the Snowshoe Mountain project. Harris said Martin should have done so again last week.

"He needs to take some lessons in ethics," she said. "What he's doing is wrong."
 

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