A consultant hired by Gov. Earl Ray Tomblin’s administration concludes that state officials used tens of millions of dollars in federal stimulus funds to help Frontier Communications build a fragmented high-speed Internet network that solely benefits the company.
The Charleston Gazette obtained the confidential report by ICF International, examining the $126 million statewide broadband expansion project. It concludes the project created an “unintended monopoly” for Frontier that has “no practical use for the public or competition.”
The state is using $40 million of the stimulus funds to pay Frontier to install more than 500 miles of fiber-optic cable statewide.
ICF, based in Vienna, Va., also accused Frontier of driving up costs by “gold-plating” facilities, or installing up to six times more strands of fiber than needed at schools, libraries and other public buildings.
People overseeing the project have defended the network as an affordable, high-speed system that could serve 700,000 homes and 110,000 businesses. But ICF concluded Frontier is building a “private” network that shuts out competitors and fails to connect public buildings to each other or to Frontier’s central offices.
Frontier called the report “worthless,” arguing a federal agency overseeing the broadband project dismissed similar accusations two years ago.
“The ICF report provides worthless, inaccurate and stale comments that merely repeat previously repudiated allegations,” said Dana Waldo, general manager of West Virginia operations. “It is totally incomprehensible that ICF failed to realize that the project’s federal oversight agency investigated such red herrings and soundly rejected them in November 2010.”
Waldo said Frontier has worked with federal and state officials throughout the project, which included numerous reviews and audits.
“We have complied with all of the projects guidelines and strictly followed both federal and state directives,” Waldo said.
But Lee Fisher, a member of the state’s Broadband Deployment Council, called the ICF findings “very serious.”
“There are statements in the report made about the misuse of public monies,” he said. “The state paid money to Frontier, but they apparently have no substantiation of what they did with it.”
The state also paid ICF $118,000 for the report, which the administration received last year but chose not to make public.
Chief of Staff Rob Alsop said he met with Frontier and questioned officials about the memo, which the company refuted.
The Gazette says that when it requested the report under the state Freedom of Information Act, Commerce Secretary Keith Burdette withheld it. He cited a legal exemption for the “internal memorandum” that he noted would be “embarrassing to some people.”
Burdette also said he disagreed with ICF’s conclusions.
The state auditor has also criticized the state’s project, concluding West Virginia wasted between $7.9 million and $15 million on oversized routers that cost $22,600 piece.
ICF said state officials now have few options for fixing the problem they created with Frontier.
Though competitors could build their own system and try to connect to Frontier’s fragmented network, the report concludes that “from any reasonable practical point of view, this is not feasible.”