Flush With Cash, West Virginia Wants To Fix Its Internet. But How?
This story was originally published by Mountain State Spotlight. Get stories like this delivered to your email inbox once a week; sign up for the free newsletter at https://mountainstatespotlight.org/newsletter
More than a decade ago, West Virginia officials faced a gargantuan problem without enough money to fix it. They earmarked $5 million toward fixing the state’s slow, unreliable internet, then spent years bickering over how to spend it with little progress made on the problem.
But now, they’ll have another chance — with a lot more money and much, much higher stakes.
While the pandemic has exacerbated the impacts of West Virginia’s digital divide, it’s also loosened purse strings. Thanks to federal coronavirus relief, the state now has over $200 million earmarked for broadband expansion. That doesn’t count the additional billions that federal agencies and local governments could potentially spend to address the state’s broadband issues in coming years.
Now, West Virginia officials find themselves in an unfamiliar place when it comes to broadband: awash in cash, leaving legislators and other state officials scrambling to figure out how to spend it.
Unlike many of its peers who were experimenting with innovative ways to spur — and often supplement — private investment in broadband infrastructure, West Virginia doesn’t have a state grantmaking program.
“We have not developed a state program because we never had state funding,” explained Kelly Workman, a director at the state’s newly-formed Office of Broadband, at a meeting with state leaders earlier this month.
This influx of cash creates a “once-in-a-lifetime opportunity,” she said, and added that it was “imperative we get started immediately.”
But there’s no guarantee the money will fix the state’s connectivity issues. Robert Morris Jr., chairman of the state council that — in one iteration or another — has overseen the state’s broadband strategy for much of the last decade, warned his fellow council members at a recent meeting that just throwing money at the problem isn’t enough.
“There’s no doubt [the money] can be spent, but does it actually improve service?” he said.
A decade ago, West Virginia handed Frontier Communications a monopoly over its rural telephone service in exchange for a promise that the company would repair the state’s decaying copper wire phone network and use it to provide internet access to a vast majority of the state.
It was a horrible deal. Frontier sucked up profits — and, when its service begin to decline, more financial assistance — from the state. Instead of improving its service, the company invested in a series of calamitous coastal expansions that ultimately sent it into bankruptcy.
At one point, federal regulators demanded the state return millions of dollars that it had given to Frontier after the company admitted to wasting it. Frontier declined, and is still mired in litigation brought by a local competitor, CityNet.
The result is that West Virginia’s internet continues to lag behind the rest of the country, falling this year to 48th in rankings of high-speed internet access.
Now, regulators want Frontier to help clean up the mess.
The Federal Communications Commission announced late last year that it planned to give the company another $250 million, and West Virginia regulators decided to allow Frontier to continue operating in the state post-bankruptcy — after the company promised to spend an additional $200 million to fix its broken network.
State lawmakers, however, aren’t so keen on giving Frontier a second chance. They’ve made clear in a series of letters to the FCC that they don’t want Frontier getting any more federal assistance. And they passed an omnibus broadband law this year designed to encourage competition among internet providers — in other words, competition with Frontier — as they race to put federal subsidies to use, building out the new, expensive fiber networks that can deliver the high-speeds now expected by Netflix-loving customers.
State broadband money began stacking up last year when Gov. Jim Justice promised to allocate $50 million of federal coronavirus relief to improving internet — a response to the many West Virginians trying to work and study at home with bad internet. Nearly a third of that money remains unspent. The second round of federal relief in March added another $138 million. And state lawmakers also approved $50 million for broadband in next year’s budget, which takes effect July 1.
And that’s just the money that the state controls directly. The Federal Communications Commission has already committed to spending over $350 million in West Virginia over the next decade. This includes the money promised to Frontier, but the number will likely rise significantly as the FCC spends the remainder of its $20 billion fund and Congress debates adding up to $100 billion more in broadband assistance.
But West Virginia lawmakers haven’t yet figured out to spend their portion of all this new money.
A bipartisan proposal — pushed by Sen. Robert Plymale, D-Wayne and Delegate Daniel Linville, R-Cabell — died in the Senate on the last day of the legislative session. It would have established four different funds for spending state broadband money, and required new fiber built entirely with public funds to be “open access” — meaning any company would be able to lease it and provide a competing service.
But the idea was swatted down — twice — after the state’s existing internet providers objected.
In a fiery speech before his colleagues on the floor of the House, Linville blamed the proposal’s failure on lobbying by telecommunications companies like Suddenlink and CityNet. “They think that because we need this so desperately, that they can write the legislation,” Linville said.
In an emailed statement, Chris Morris, an executive at Bridgeport-based CityNet, said Linville’s proposal would have had “negative unintended outcomes” and “would likely have resulted in a decrease in private investment.”
He expressed frustration with the way CityNet, he felt, was being vilified.
“For too many years, we advocated for policies that would facilitate competition and broadband expansion and no one seemed to care,” he wrote.
Meanwhile, lacking legislative guidance, the state’s Broadband Enhancement Council is pressing ahead. The volunteer group tasked a consultant, the Maine-based company Tilson, with creating a proposal for a new “Broadband Infrastructure Funding Program.” Tilson presented a “high-level” proposal to the council in early April.
Tilson’s plan included new “mapping efforts” to determine eligible areas, assistance with “scoring and award recommendations” and compliance monitoring — all for a fee: roughly 2% according to a firm executive.
A Tilson consultant said the firm’s proposal was based on their experiences with similar programs in other states. New Hampshire tasked the firm late last year to help spend $50 million in federal aid on expanding broadband — a markedly different strategy than the one used previously in West Virginia, where Justice elected to go it alone and ended up spending millions of dollars earmarked for broadband on unrelated projects.
One recipient of New Hampshire’s grant program, the 3,300 person town of Bristol, is using the funds to create a city-controlled municipal broadband network — a strategy that West Virginia’s leaders are hoping to replicate in the Mountain State.
But West Virginia has a bad track record of allowing consultants to suck up cash instead of spending it on viable broadband projects. In 2012, the Charleston Gazette reported that the state paid a Verizon consultant over $700,000, which included time spent on 47 flights back and forth between West Virginia and his home state, Colorado. Later, the newspaper revealed that the broadband council — at the time made up largely of gubernatorial appointees and telecommunications executives — had spent over a third of its budget on consultants to manage its grant-making program.
And some of what Tilson proposed is already being done by the state’s brand new Office of Broadband, which has been tasked by the Legislature with mapping areas of the state that are unserved or underserved by existing broadband providers.
Still, the council voted unanimously to give Tilson the go-ahead to move forward.
Don’t expect state legislators to have abandoned the issue, however. Senate President Craig Blair, R-Berkeley, promised to return later to the question of how to use all of the new funding — potentially in an interim session.
If that happens, Linville will have refined his pitch.
On a recent panel, convened by the online publication Route Fifty, Linville discussed West Virginia’s bipartisan approach to address the state’s digital divide. He announced that he was ditching the term “open access” and replacing it with a new one: “competitive access.”
Reach reporter Lucas Manfield at email@example.com