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PSC dismisses request for inquiry of Frontier’s Internet business

By Eric Eyre, Staff writer, The Charleston Gazette

The West Virginia Public Service Commission has rejected Citynet’s request for a full-scale investigation into Frontier Communications’ business practices, instead referring the dispute over Internet service to a special judge.

In a formal complaint, Citynet alleged that Frontier refused to lease unused fiber-optic cable to competing Internet carriers, a practice that stifled competition.

The PSC concluded "the dispute between Frontier and Citynet is not a general issue affecting public utilities that warrants a general investigation," according to a three-page order issued last week. Commissioners urged the two companies to "negotiate a resolution."

"Frontier is encouraged by the commission’s conclusion that a general investigation isn’t justified," said Frontier spokesman Dan Page. "As the PSC said, this is a business dispute … We’re ready to move ahead."

Citynet, a Bridgeport-based Internet provider, has said that Frontier’s "anti-competitive" practices could drive up Internet prices for consumers in West Virginia.

In 2003, Citynet and Verizon signed an "interconnection" agreement that allows Citynet to lease unused fiber from Verizon’s network. The PSC approved the deal.

In 2010, Frontier bought Verizon’s telephone landlines and fiber network in West Virginia, promising to keep its agreements with Citynet and other competitors.

But in recent years, Citynet alleges that Frontier and Verizon have rejected 24 of Citynet’s 25 requests to lease fiber, in violation of the PSC agreement. Frontier said it didn’t have any fiber available for lease to Citynet, which primarily serves businesses.

In last week’s order, commissioners noted Citynet has yet to request any documents or data from Frontier. An administrative law judge is expected to rule on the dispute by April 3.

"The commission is skeptical of the ability of Citynet to successfully prove its allegations at hearing without conducting any discovery in this proceeding," the PSC wrote.

Citynet CEO Jim Martin said the company may "renew [its] request for a general investigation once it is more clear that Frontier’s actions are negatively impacting the state of West Virginia as a whole, not just Citynet."

"While we are disappointed that the commission elected not to proceed with a general investigation of Frontier, we are pleased that all other significant matters raised in Citynet’s complaint have been referred by the commission to an administrative law judge for a trial on the merits," Martin said.

Citynet and Frontier have sparred for years.

Martin has alleged that Frontier used federal stimulus funds to build a statewide high-speed Internet network that solely benefits Frontier. Martin also has questioned whether Frontier inflated the number of miles of fiber-optic cable the company installed across the state.

Last December, Frontier General Manager Dana Waldo walked out of a public meeting at the state Capitol after he accused Martin of misleading state officials and defaming Frontier.

Page said Citynet has a "history of crying wolf" — and the complaint about Frontier filed with the PSC "is just the latest example."

"We’ve seen a trend over the years: Citynet tries to impede Frontier’s progress, consistently criticizes our company and government officials and agencies and then seeks public money for its own, narrowly focused projects," Page said. "Those tactics are as obvious as they are tiresome and unfair to West Virginia taxpayers."

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