Lawmakers demand answers about Frontier's broadband billing

January 5, 2014

By Eric Eyre, Sunday Gazette-Mail

CHARLESTON, W.Va. -- West Virginia lawmakers want answers about multimillion-dollar cost overruns that have dogged a statewide high-speed Internet expansion project paid for by the federal stimulus.

Frontier Communications charged the state about $62,000 per mile to run fiber-optic cable to public facilities across the state.

On Sunday night, legislators cited a Bill & Melinda Gates Foundation study that estimates fiber construction at $17,000 a mile in rural areas. Also, a recent McDowell County fiber installation project cost $30,000 per mile.

"I still have some unanswered questions about why we're paying $62,000 a mile," said Sen. Bob Williams, D-Taylor, at a joint House-Senate interim committee meeting Sunday. "I have a hard time understanding why we're paying twice -- perhaps three times as much -- as the going rate for fiber being installed with this project."

The state initially asked Frontier to build 900 miles of fiber to speed up Internet connections at schools, libraries and other public facilities. The state budgeted $42 million for fiber construction.

State officials scaled back the project to 675 miles, but Frontier wound up billing the state for $42 million.

Gale Given, West Virginia government's chief technology officer, said Frontier charged the state 22 percent more than expected. The state paid Frontier $2.5 million extra to bring fiber inside many public buildings, she said.

Given said she trusts the National Telecommunication and Information Administration, the federal agency overseeing West Virginia's broadband project, to audit Frontier's charges.

"With NTIA, I have to trust they're looking at these things to make sure those monies were spent properly," Given said. "They were their dollars."

Mark McKenzie, Frontier's chief engineer on the project, told lawmakers that West Virginia's rugged terrain drove up fiber construction costs. Frontier typically spends $45,000 to $50,000 a mile to install fiber, he said.

"There were a variety of things in the field that drove up those costs," McKenzie said.

He said legal and audit fees, and a federal requirement to pay prevailing wages to workers also increased costs.

Also Sunday night:

* Given told state lawmakers she remains "hopeful" that federal officials will give the state an extension to complete the high-speed Internet expansion project. The state will have to return $2.5 million in leftover stimulus funds if the feds don't grant the extension. The deadline for completing the project was Dec. 31.

The state plans to distribute the $2.5 million to Citynet, a Bridgeport company that hopes to install equipment that will connect West Virginia to the national Internet "backbone" in Columbus and Pittsburgh.

"Right now," I don't have a sense of what's going to happen," Given said. "I'm still hopeful, but I have nothing to base that on."

* State lawmakers reiterated a longstanding request that Frontier release engineering maps that detail fiber construction. McKenzie said the company would talk to Given about turning over the maps. Williams said the maps would "ensure what we're being bill for is actually what we received."

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