West Virginia could wind up wasting millions of dollars in state funds to expand high-speed Internet if the state redefines adequate broadband speeds, a Frontier Communications executive told members of a state council Tuesday.
Dana Waldo, Frontier's West Virginia general manager, said the company has invested tens of millions of dollars to increase broadband availability to 158,000 additional households across the state since July 2010.
The proposed change in state law - reviewed by the state Broadband Deployment Council on Tuesday - would allow the state to subsidize other telecommunications providers that want to use state funds to bring faster broadband service to areas where Frontier already makes high-speed Internet available.
"If you take the [increased Internet download] speed recommendation, almost the entire state of West Virginia, except urban areas, will be considered unserved [and eligible for subsidies]," Waldo said at Tuesday's council meeting. "This business is best left in the hands of the private sector."
The proposed new minimum Internet speed necessary to qualify for state grants - 6 megabits - would require legislation.
In December, the council awarded $2 million in grants to wireless telecommunications firms for projects that bring Internet service to hundreds of households.
But the proposal to change minimum download and upload speeds could make competing companies eligible for council funding to build broadband in those same areas, Waldo said.
"You're going to have taxpayer funding chasing taxpayer funding for infrastructure," Waldo said.
The Broadband Deployment Council postponed a vote on the proposed legislation Tuesday. Council members will consider the Internet speed revision during a meeting next week. A council subcommittee suggested the change.
Earlier this week, the West Virginia Legislative Auditor released a report that concluded the state wasted up to $15 million in federal stimulus funds used to buy oversize Internet routers for hundreds of government facilities. The high-capacity devices were installed at sites with only a few Internet connections. The Broadband Deployment Council had no oversight on the stimulus-funded broadband expansion project.
Sen. Joe Manchin, who served as governor when the state purchased the routers in 2010, defended the decision, saying the devices were a "long-term investment."
"We were planning for future growth and wanted to be able to educate our children, create jobs, grow our economy and keep our communities safe well into the 21st century," Manchin said. "As governor and as senator, I've always believed ... it's important to look beyond the shortsighted goals of today and start building our state's future."
Also at Tuesday's Broadband Council meeting, a subcommittee proposed legislation that would allow the council to distribute state grant money designed to encourage people to subscribe to broadband throughout West Virginia.
Current law only permits the council to give broadband "demand promotion grants" in remote areas that don't have high-speed Internet.
It doesn't make sense to promote broadband in areas that don't have the service, council members said. Broadband marketing projects might generate interest in broadband, but they wouldn't be able to sign up if the high-speed service isn't available.
"With this change to the statute, we could offer demand-promotion grants anywhere in the state," said council Chairman Dan O'Hanlon.
In December, the Broadband Deployment Council declined to award grant money to a Pendleton County organization - called Future Generations - that wanted to promote high-speed Internet in Southern West Virginia. The group has blasted council members for the snub.
The Broadband Deployment Council has $1.6 million in leftover funds it hopes to distribute later this year.
Reach Eric Eyre at firstname.lastname@example.org or 304-348-4869.
Council members also considered a proposal Tuesday to ask state lawmakers for funding to hire an executive director and office assistant. The council now has no staff members, but pays a Pennsylvania-based consulting group, L.R. Kimball, for technical assistance.
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