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State broadband request still on target: Official says rejection of Frontier stimulus bid doesn't affect state's effort
Feb 08, 2010 (Charleston Daily Mail - McClatchy-Tribune Information Services via COMTEX) --
CHARLESTON, W.Va. -- The rejection of Frontier Communication's request for $55.1 million in federal stimulus money for West Virginia broadband projects has no direct impact on the state's application for $126.3 million, a senior state executive said.
Last Tuesday, the state Public Service Commission's Consumer Advocate Division filed a notice pointing out that both of Frontier's applications for federal stimulus broadband money have been denied.
No decision has apparently been made on the state's application. The National Telecommunications and Internet Administration's online database simply says the state's application has been received.
The state wants to use stimulus money to add to its existing microwave network in a way that would "provide a backbone to community anchors, including: schools, libraries, hospitals, public safety agencies and jails." The state's project would include 12 new towers and 900 miles of new fiber-optic cable.
In many instances, Frontier's projects would have dovetailed with the state's to provide the last mile of service to individual users. However, "The rejection of Frontier's application does not directly impact the state's application," said West Virginia Secretary of Commerce Kelley Goes.
"The state's application was crafted in two parts -- completing emergency services communication build-out through the tower project and connecting up state critical access facilities (education, health care related, emergency services, government services, etc.) to adequate bandwidth under the existing state. . .contract," Goes said. "The application stands on its own.
"What will impact the application is the amount of funding -- if any -- that is received and how that funding is directed by NTIA," she added.
Frontier Communications has said it plans to greatly expand the availability of broadband in West Virginia if it is allowed to buy Verizon's wire line business in the state. That case is pending at the Public Service Commission, which held hearings last month.
Steve Crosby, Frontier's spokesman, said the company is looking at the second-round stimulus funding rules and "evaluating a possible submittal for the next round of funding."
"This doesn't at all change our commitment to the state of West Virginia," Crosby said. "Clearly we're ready to build out the plan we articulated at the PSC hearings. Once the PSC approves us and the transaction is approved, we're ready to go."
The commission's Consumer Advocate Division opposes the Verizon-Frontier deal. Deputy Consumer Advocate Patrick Pearlman noted that Frontier's stimulus applications were a material issue in the case and "approval of the proposed transaction was urged by Frontier, in part, to enable the company to obtain federal stimulus funding for broadband deployment.
"The commission's record accordingly should be supplemented to allow the commission and parties to take notice of the NTIA's final action on Frontier's grant applications. . .," Pearlman wrote.
The Communications Workers of America, which represents many Verizon and Frontier workers, vigorously opposes the deal. The union argues Frontier is biting off more than it can chew and won't have the financial strength to maintain and improve Verizon's West Virginia network after the transaction.
The West Virginia Chamber of Commerce has called the deal "a winning opportunity." The chamber has said Frontier has shown elsewhere that it can make broadband available to rural areas.
As for the broadband stimulus funding, more than 2,200 applicants asked for a total of $28 billion in the first round. The federal government has just $7.2 billion to distribute. The federal agencies that are administering the money have revised the rules for a second round of funding. March 15 is the deadline for second-round applications.
Numerous West Virginia companies and nonprofits submitted applications for first-round funding. Citynet sought $34.5 million to build competitively priced access to the Internet backbone. That application was denied.
"We are obviously disappointed with the results of round one, said Jim Martin, Citynet's president and chief executive officer. "However we are more than excited about fulfilling requirements for round two and feel very strongly that our application for round two will be a winner."
Other West Virginia-related round-one applications listed in the NTIA's database and their status as of Friday:
--Kanawha County Public Library, to bring broadband to Marmet, $2.2 million requested; application received.
--Zito Media Communication II, Coudersport, Pa., southeastern Ohio and northern West Virginia fiber ring project, $12.6 million requested; not funded.
--WorkForce West Virginia, one-stop public computer center modernization, $2.1 million requested; application received.
--Future Generations Graduate School, Franklin, equipping fire and rescue squads with technology and training to serve communities, $6 million requested; application received.
--Hardy Telecommunications, build middle-mile fiber-optic network in Hardy County, $2 million requested; application received.
--Regional Optical Comm. Inc., Princeton, to build a middle-mile fiber network to connect 11 counties, $42 million requested; not funded.
--Un Wired Web, Ripley, improve and expand wireless broadband service in Jackson County, $660,200 requested; not funded.
--Jetbroadband WV, Pineville, upgrade network in McDowell County, $2.8 million loan, $2.8 million grant requested; application received.
--Vital Communications Group, Bellhaven, N.C., upgrade and consolidate existing facility with head ends in Ronceverte and Apple Grove; $14.2 million requested; application received.
--Gateway Telecom, Wheeling, doing business as StratusWave Communications, to build and operate a wireless system, $1.4 million grant, $1.5 million loan requested; not funded.
--Clarendon Foundation, Las Vegas, Nev., build fiber and microwave system, $20.6 million requested; not funded.
--Telecom Capital Group, Richmond, Va., bring low-cost service to un- and under-served areas, $50 million grant, $12.5 million loan requested; application received.
--Clarendon Foundation, Las Vegas, Nev., provide netbook computers to libraries in Hampshire and Morgan counties, $8,000 requested; not funded.
--Lloyd Hoff Holding Corp., Millwood, to provide services in middle West Virginia, $997,000 grant, $4,000 loan requested; application received.
Contact writer George Hohmann at business@dailymail.com or 304-348-4836.
To see more of the Charleston Daily Mail, or to subscribe to the newspaper, go
to http://www.dailymail.com. Copyright (c) 2010, Charleston Daily Mail, W.Va.
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