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West Virginia Scales Back State Broadband Network

State legislators have decided to rework the state's broadband network, opting for plan that will implement the high-speed Internet piece by piece.

by Eric Eyre, The Charleston Gazette, W.Va. / February 16, 2016

(TNS) -- In the face of fierce opposition from Frontier Communications and cable companies, state lawmakers have scrapped plans to build a 2,500-mile high-speed Internet network all at once in West Virginia and instead seek to construct the fiber network in segments.

State senators backed away from proposed legislation last week that would have created a $72 million state-funded network designed to bring Internet to rural communities. Lobbyists representing large Internet providers complained that the project would duplicate existing networks.

A completely reworked version of the bill (SB 315) would allow Internet companies to request grant and bond money to build individual fiber segments, provided the firms can show they could sign up a sufficient number of customers and have viable plans to retire their debt.

“It's a more intelligent way to do it, instead of putting us on the hook for 2,500 miles without commitments from providers to pay for it,” said Sen. Chris Walters, R-Putnam. “It will really help companies get bonds and grants easier to expand fiber in West Virginia.”

The scaled-back plan comes on the heels of a Federal Communication Commission report that ranks West Virginia 48th in the nation when it comes to people having access to high-speed broadband Internet service. More than 544,000 West Virginians — or about 30 percent of the state's population — don't have broadband service. Only Mississippi and Montana had worse broadband access rates.

“Our problem in this state are the rural markets — period,” said Jim Martin, CEO of Citynet, a Bridgeport-based Internet company. “What this bill does is it recognizes we don't have the infrastructure in the rural areas, and we need to build out to those rural markets to make the Internet affordable.”

At a legislative committee meeting last week, Martin held up a U.S. map of “middle-mile” broadband networks built with federal funds. Any Internet provider can connect to the “open-access” networks and serve customers. West Virginia is mostly blank on the map.

“West Virginia is a big black hole,” he said.

In recent weeks, lobbyists for larger Internet providers like Frontier and Suddenlink have blasted Walters' bill, saying the state can't afford to build an expansive fiber network and few firms would sign up to use it.

The large Internet providers noted that only 54 percent of West Virginians have access to public water, and 40 percent of residents have public sewer service, while 70 percent can subscribe to broadband Internet. Those figures show the private sector can expand Internet service in West Virginia without government help, said Mark Polen, executive director of the West Virginia Cable Association.

“That's a pretty good record to start with after just 15 years of investment,” said Polen, adding that broadband access has increased significantly across West Virginia in recent years.

Large Internet providers aren't sold on Walters' bill overhaul either. They've seen nothing in writing. The Senate Government Organization Committee passed the revised legislation Friday based solely on Walters' explanation. The bill goes to the full Senate this week.

“The bill was written on a concept,” Polen said. “We saw the movie before the book came out.”

In an interview with the Gazette-Mail, Walters said private Internet providers — or possibly cities or towns — could request grant and bond money through the West Virginia Water Development Authority, one of the few state agencies that issues bonds. The companies would have to submit business plans detailing the number of customers they expected to serve, project costs and how they would pay off their bonds.

“The individual segments will be built and bonds will be sought when viability is determined based on data provided by the project sponsor,” Walters said. “It would be done zone by zone. It's been successful in states all across the country.”

Gov. Earl Ray Tomblin hasn't stated his position on the legislation. The governor supports broadband expansion, but wants to see the bill's specifics, said Becky Neal, Tomblin's executive aide.

“The governor is concerned about anything that affects the budget,” Neal said. “Until the legislation is completed and comes across his desk, there is concern about the fiscal impact and putting the state coffers at risk.”

Senate members seem to support recent changes to Walters' bill. They've vowed to take steps to expand high-speed Internet, after fielding numerous complaints from constituents. Some lawmakers say they're getting almost as many calls about download speeds as potholes these days.

“I see this as a way to make the industry move forward a little faster,” said Sen. Kent Leonhardt, R-Monongalia. “You [Internet providers] could use this legislation to your advantage and to the advantage of West Virginia citizens at the same time so that we could get more-affordable and faster Internet.”

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

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