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Citynet Pitches Southern Virginia Broadband Model

By Eric Eyre, The Charleston Gazette (1/7/2011)

Citynet executives urged West Virginia business leaders and government officials Thursday to establish a statewide high-speed Internet expansion plan modeled after a Southern Virginia broadband network that has fostered competition and created jobs.

Since 2004, the South Boston, Va.-based Mid-Atlantic Broadband Cooperative has spent $50 million in state Tobacco Commission funds to build a wholesale open-access fiber-optic network across 20 Southern Virginia counties.

The project has helped to create thousands of jobs and had a $2 billion economic-development impact on the region, according to a federal government report.

"This is the future," said Mike Friloux, a Citynet executive who serves on the West Virginia Broadband Deployment Council. "This is how broadband is going to be solved in rural markets. They built it and demonstrated it works."

For months, Citynet executives have railed against the state's use of $126 million in federal stimulus funds to bring broadband to health-care facilities, schools, libraries and other public agencies. Citynet alleges that the project solely benefits Frontier Communications, which is building the network.

Federal officials have rejected Citynet's allegations and declined to suspend the grant.

"The federal government has spoken clearly on this subject, and Frontier intends to implement the state's plan," Frontier spokesman Dan Page said Thursday. "We look forward to expanding and improving broadband services to West Virginia."

Citynet executives continue to speak out against the broadband plan, saying that state officials should use the stimulus funds to build an open-access "middle-mile" network - similar to the one in Southern Virginia - that Citynet and other telecommunications companies could tap into.

On Thursday, Citynet executives introduced the Mid-Atlantic Broadband Cooperative's CEO, Tad Deriso, to state political and business leaders - including members of West Virginia's Broadband Deployment Council - in Charleston. Citynet hopes Deriso will help persuade state officials to build a broadband network modeled after the cooperative's project.

Deriso said the nonprofit was established in 2006 because the region lacked a high-bandwidth network that was needed to recruit companies and keep existing businesses.

The cooperative has 55 members - all telecommunications carriers - that pay fees for access to the 800-mile fiber-optic network. Members include Verizon and nTelos, two companies that also operate in West Virginia.

"Our only business is serving the carriers," Deriso said. "We build the interstate highway system. It's accessible to any telecommunications company that becomes a member of our cooperative."

The fiber-optic network stretches across 60 business and technology parks in Southern Virginia.

Some businesses that were charged $24,000 a month for broadband service before the cooperative started now pay $1,000 a month for broadband at much higher speeds, Deriso said.

A county school system in Southern Virginia also has realized similar savings, he said.

High-speed broadband prices for businesses are typically much higher in rural markets than in urban areas.

"When a business comes in, they pay what they would pay in Washington, D.C.," Deriso said.

The cooperative, which has 14 full-time employees, recently received $26 million in federal stimulus funds. The nonprofit plans to double the size of its fiber-optic network within the next two years.

The network's faster speeds and affordable prices help the region recruit large employers, such as data processing centers, Deriso said.

"At the end of the day, our focus is on the community," he said. "We are passionate about sustainable middle-mile networks."

Deriso said groups in other states have approached him about wanting to build a similar fiber-optic network. "We love showcasing that this does work and will work," he said.

Citynet said Deriso's meetings with West Virginia officials will help spread the message that the state should pursue a different broadband expansion strategy.

"We know other states are doing this," Friloux said. "We know these solutions work. This creative solution provides sustainability, durability, lower prices and competition."

Reach Eric Eyre at or 304-348-4869.

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