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Funding Wasted on Unused Fiber in West Virginia

At least $1.1 million in unused fiber was either built to closing schools or county education buildings that receive their internet service through a different connection. Some of that fiber was used for less than a year; much of it has never been used at all.

(TNS) -- WEIRTON, W.Va. -- By December 2009, Hancock County school officials knew they would close three of the aging elementary schools in Weirton, the old steel town near the northern tip of West Virginia.

Liberty, Broadview and Weirton Heights elementary schools were all more than 55 years old, and the county school system was already planning for the new Weirton Elementary School that would be built along Pennsylvania Avenue.

But more than two years later, state officials paid Frontier Communications $74,387 in federal funds to build roughly 9,000 feet of fiberoptic cable to the old, brick-cased buildings. All three were set to close in less than a year. All three already had wireless internet connections.

Now, those schools are demolished, gone with the $21,356 in building technology upgrades Frontier billed the federal government for, through the state.

Earlier this week, fireworks left behind from a recent Fourth of July celebration were the only things left in the dry, grassy field where Broadview used to be.

The trees and driveway that made up the front entrance of Liberty are all that remain of that school property, and where Weirton Heights had stood for 89 years, a no-trespassing sign was taped over an old realty advertisement at the center of the vacant lot.

The spools of rubber-coated fiber that Frontier installed hung from the nearby utility poles, the ends of the cables dangling in the air.

The cable strung to the three demolished schools is not the only example of wasted fiber built with the $41.5 million given to Frontier by the state as part of a $4 billion federal grant program to improve broadband throughout the country.

A Gazette-Mail investigation has found at least $1.1 million in unused fiber that was either built to closing schools or county education buildings that receive their internet service through a different connection.

Some of that fiber was used for less than a year; much of it has never been used at all.

It's not the first time that waste has been found in West Virginia's spending of the $126 million federal grant, which the state received in 2010 as part of President Barack Obama's stimulus plan.

An independent audit, which was commissioned by the state but later shut down and publicly withheld by Gov. Earl Ray Tomblin's office, found that Frontier was using the federal funds to create an “unintended monopoly.”

Previous Gazette-Mail investigations, state legislative audits and a federal investigator general report have already shown the state wasted millions of dollars on high-end routers that either sat in storage unused or were delivered to small libraries and state agencies that had no need for equipment that size.

A recently unsealed federal lawsuit filed by Citynet, a Bridgeport-based internet company, has also alleged that Frontier and state officials defrauded the U.S. government by paying Frontier for installing fiber that didn't meet the federal grant guidelines and for inflating invoices with $4.5 million of indirect costs.

Frontier has denied all of the allegations and audit findings, but declined an interview for this story because of the ongoing lawsuit.

“Frontier stands by the broadband work it performed for the people of West Virginia,” said Andy Malinoski, Frontier's communications manager, “and like the Department of Justice and the Department of Commerce, rejects the stale and erroneous allegations in Citynet's complaint.”

State officials from the Office of Technology, Department of Education and Division of Homeland Security and Emergency Management -- which had a hand in planning the fiber projects -- declined interviews for this story or did not respond to requests for comment.

Gov. Earl Ray Tomblin, whose administration inherited the $126 million broadband grant from former governor and current U.S. Sen. Joe Manchin, also declined to comment, citing the ongoing litigation.

All of this comes at a time when West Virginia continues to trail much of the nation in most broadband connectivity statistics, even though it got one of the largest federal grants in the country.

It also coincides with recent attempts by state lawmakers to fund a program that would help internet and cable companies build open-access fiber routes to underserved areas of West Virginia -- proposals that Frontier has lobbied against, proposals that have failed.

The scattered lines and small dots that span from the Northern Panhandle to McDowell County represent the fiber routes that Frontier and state officials had initially proposed to build with the federal grant money.

There are more than 1,064 routes on the state map, which was developed by the Division of Homeland Security and Emergency Management's geographic information system, or GIS, staff around 2012. Almost none of them connect.

The proposed fiber is shown going to schools, hospitals, libraries and police stations, but Frontier built less than two thirds of those extensions, according to state invoices and Citynet's federal lawsuit.

By the time Frontier and state officials recognized that hundreds of the proposed “community anchor” locations already had high-speed connections, the deadline to spend the grant money was running out. The state ultimately had to return $2.5 million to the federal government.

The state does not have updated maps to show which routes were actually constructed by Frontier, but invoices, Department of Education data and responses from other internet providers show that at least $1.1 million of the constructed fiber has served little to no purpose.

In Grant County, Frontier built more than 20,000 feet of fiber to Dorcas Elementary School. But according to county planning documents and the project invoice, the rural elementary school was already being phased out by the time Frontier billed the federal government $109,561.

In Nicholas County, Frontier charged $95,519 for building roughly 6,000 feet of fiber to five schools. None of that fiber is being used, because Lumos, another internet service provider, controls the contract for those county schools.

Instead of using the grant-funded fiber, which was intended to be accessible and affordable for any internet company, Lumos officials say they built their own connections to Zela, Dixie, Beaver, Mount Nebo and Glade Creek elementary schools.

The same situation has played out in Upshur County.

While Frontier collected $915,783 for building fiber to 10 schools in that county, Suddenlink officials say they are using their own corporate-financed fiber to provide internet to the county school system.

In fact, state data shows that Frontier has never controlled the fiber service contract on any of the Upshur County schools, meaning nearly $1 million in federal grant funding was spent on fiber that has yet to be used.

This seems to match the findings of the independent audit that was commissioned by the state and later shut down by Gov. Tomblin's office.

Frontier's efforts were successful in upgrading the connections for hundreds of schools, health centers and State Police offices, but the draft audit findings said those fiber connections “effectively create an unusable network except for Frontier.”

The map of West Virginia's proposed fiber connections also stands in contrast to other federally financed projects that were built under the Broadband Technologies Opportunity Program.

Groups in Maine, Illinois and Missouri-- among others -- used the funding to build long fiber highway systems that connected distant and rural communities, allowing internet service companies to enter rural markets and build their own fiber out from the “middle-mile” system to compete for customers.

In Pennsylvania, the Keystone Initiative for Network Based Education and Research used $99 million in federal money to build a middle-mile system that spanned from one corner of the state to other, connecting more than 2,000 schools, health care facilities and other public institutions.

But the map of proposed projects in West Virginia shows that almost none of the routes connect without going through Frontier's corporate fiber, on which the company sets the connection cost for its competitors.

Many of the fiber routes span only from the public building to the roadway and down the street several thousand feet.

In Citynet's lawsuit, filed under the False Claims Act, the company alleges that what Frontier actually built was a last-mile system -- small extensions off of its own existing network.

One of the last reports filed with the federal government shows that no provider, other than Frontier, had accessed the grant-funded fiber as of July 2014, even though seven outside groups had inquired about signing an interconnection agreement.

The Gazette Mail has found no examples of other internet providers using the fiber since that report was filed, and Frontier's spokesperson would not say whether any other broadband providers paid to access the fiber.

“I provided our official statement and have nothing else to add,” Malinoski said.

Rusty Irvin, the CEO of Stratuswave Communications, a broadband company in the Northern Panhandle, can see two states from his ninth-floor office in downtown Wheeling.

From that vantage point, the Ohio River is the only thing that delineates the century-old homes and office buildings along each bank of the Ohio-West Virginia border.

But on the Ohio side, Stratuswave can pay a competitive price to jump onto an open-access fiber highway that connects nearly every county in that state. In West Virginia, Irvin says, no such competitive fiber routes exist -- even with the fiber that Frontier built.

When West Virginia received the grant in 2010, Irvin thought the federal stimulus project would be good for his business. He already had wireless internet contracts with all of the schools in the Northern Panhandle.

If the state built an expansive middle-mile system that connected those schools to other parts of the state, Irvin thought, he would be able to access that network and provide high-speed fiber connections to the county school systems he already served.

But when he started to hear what the state had planned, he became concerned that the grant funding would be used in a way that would give Frontier an unfair advantage.

He sent a letter to Kelley Goes, the West Virginia Secretary of Commerce at the time, voicing his concerns. His staff later met in Charleston with Ted Mattern, then the West Virginia superintendent of schools. And when that didn't work, he wrote to Sen. Jeff Kessler, D-Marshall, who was state Senate president at the time.

“We have serious concerns that Frontier has created exclusionary policies within their organization to prevent other carriers from gaining access to the fiber network currently under construction and funded by the [National Telecommunications Information Administration] grant (i.e., taxpayer dollars),” Irvin told to Kessler, before asking for a formal investigation.

Irvin's pleas and protests didn't work.

Frontier used federal money to build fiber to every school that Stratuswave had been serving wirelessly -- including the three now-demolished elementary schools in Weirton. He requested access to some of that fiber in the hope of continuing Stratuswave's contracts with the six county school systems.

But Frontier denied Stratuswave's requests because the grant-funded fiber didn't go where he needed it. The routes didn't connect from school to school, let alone the whole way back to Morgantown, where the state's education data for schools in the northern half of West Virginia is gathered.

Over the next year, one county school system after another broke their agreements with Stratuswave, even though they had several years left on their contracts.

Stratuswave lost roughly 20 percent of its revenue, Irvin said. To add insult to economic injury, the company had to continue paying thousands of dollars a month to rent fiberoptic channels back to Morgantown that it was no longer using.

The business has survived. It's still providing internet service in the northern part of West Virginia. But Irvin isn't convinced that Frontier or the state used the federal money as the law intended.

“It's the taxpayers, at the end of the day, that didn't benefit,” Irvin said.

©2016 The Charleston Gazette (Charleston, W.Va.). Distributed by Tribune Content Agency, LLC.