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11/17/2010
West Virginia Broadband Council to Hear Broadband Grant Dispute on December 15th, 2010

by Eric Eyre, The Charleston Gazette (1/17/2010).

Citynet President Jim Martin urged West Virginia Broadband Council members Wednesday to scrutinize and suspend a $126.3 million federal stimulus grant being used to expand high-speed Internet across the state.

"This state is making a huge mistake with this grant," said Martin, who alleges that the state is wasting taxpayer money and building a broadband network that solely benefits Frontier Communications. "It's important for the council to start questioning what's going on."

Council members voted unanimously to allow executives from Citynet and Frontier, the state's grant partner, to speak Dec. 15 about how the state is spending the stimulus funds. Each side will get 20 minutes at the meeting.

Council members also have asked the state Attorney General's Office to examine state law and issue an opinion on the Broadband Council's powers. Assistant Attorney General Greg Skinner plans to respond by the council's Dec. 15 meeting.

Council members disagree over whether they have the power to suspend the $126 million grant.

Council member Mike Friloux, a Citynet executive who lives in Oklahoma, said the council needs to know its authority over grant spending.

"The council hasn't had the ability to question what the state is doing," Friloux said during Wednesday's meeting in Charleston. "Do we have the authority to say, 'We want this stopped'?"

In March, the state received a $126 million grant to expand broadband to schools, health-care facilities, police and fire departments, 911 dispatch centers and libraries.

In several press releases, state officials have asserted that the project would affect 700,000 households and 110,000 businesses across the state.

Martin has repeatedly criticized the statement, saying that $126 million wasn't being used to bring broadband to a single home or business in West Virginia.

Council members said Wednesday that some politicians have misinterpreted the statement.

However, state officials stand by the assertion that the stimulus funds would help thousands of West Virginians.

"It provides access for other applications like education, health care, and for everybody that uses 911," said Jimmy Gianato, sate homeland security chief.

Gianato also criticized a Citynet report released earlier this week that included Gianato's e-mails. Citynet obtained the e-mails after filing multiple requests under the state Freedom of Information Act.

Citynet alleged that Gianato and Commerce Secretary Kelley Goes weren't spending the stimulus funds as the grant intended.

Gianato said Citynet drew false conclusions and inappropriately pieced the e-mails together to give a false impression that state officials were wasting grant funds.

Gianato said he talks once a week with officials at the National Telecommunications Information Administration, which oversees broadband funding.

"The NTIA has told us they have no issues with the grant," Gianato said. "We're doing exactly what we said we would do in the grant application. We're doing everything the NTIA told us to do."

In September, Martin sent a letter to the federal agency, asking that it suspend the $126.3 million grant. The NTIA hasn't responded.

"We need to allow the NTIA to address the protest before we move forward," said Scott Cosco, government relations director for Frontier's West Virginia office.

Martin wants the state to build a "middle-mile" broadband network that Citynet and other telecommunications companies could tap into. He said neighboring states are using stimulus funds to build such a network.

Instead, West Virginia is creating a network that shuts out Frontier's competitors, he told Broadband Council members Wednesday.

"This grant is about funding Frontier," Martin said. "Without competition, we will never see true broadband in this state."

Also Wednesday, council consultants delivered an update on their plans to map broadband availability in West Virginia. Telecommunications companies have reported that they're capable of providing broadband to about 80 percent of households across the state.

Reach Eric Eyre at ericeyre@wvgazette.com or 304-348-4869.

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