West Virginia Exemplifies Everything Wrong With US Broadband

The Federal government is demanding that West Virginia pay back $4.7 million in federal stimulus funds after an investigation showed the money was used solely to line the pockets of Frontier Communications. For years we've explored just how corrupt and dysfunctional West Virginia has been when it came to spending their $126.3 million in broadband stimulus funds. Local Charleston Gazette reporter Eric Eyre has highlighted for years how Frontier convinced the state to pay for ridiculously overpriced, overpowered and unused routers, and ridiculously overpaid, redundant consultants who failed to actually accomplish much of anything.

Attempts to hold anybody accountable for any of this have seen mixed results.

In 2014, the state buried a study on their spending of the stimulus money (which they spent $118,000 for) that leaked anyway, highlighting that how Frontier Communications did a sloppy job in tracking spending, may have overbilled taxpayers substantially, and only built a mish mash of geographically scattered fiber upgrades that the majority of state residents wouldn't benefit from in the slightest.

But more recently, a report by the US Commerce Department's Office of Inspector General (pdf) found that Frontier padded hundreds of invoices with nearly $5 million in extra "loading" and "invoice processing" fees, and was improperly paid for these fees even though federal grant rules barred the state from using stimulus funds to pay such project costs. The Commerce Department is now demanding West Virginia pay back $4.7 million in errant charges that largely went to line Frontier's pockets.

"The Commerce Department letter cites findings that Frontier misled the public about the amount of unused fiber cable -- called “maintenance coil” -- the company installed across the state," notes the West Virginia Gazette Mail. "The extra fiber, which is stored at public buildings and used for repairs, drove up the broadband expansion project’s cost."

The 49 miles of spooled-up, unused fiber Frontier scattered around West Virginia to seemingly jack up project costs were four times the amount the company had disclosed to state officials.

Granted this $4.7 million only accounts for a small portion of Frontier's total potential fund misuse. A local ISP named Citynet sued Frontier in 2014 for misusing $40.5 million in federal stimulus funds that state and Frontier officials repeatedly claimed would be used to build an open access middle mile network, usable by multiple ISPs to help improve connectivity across wide swaths of West Virginia (that never happened).

And while many say Frontier's stranglehold over the state legislature has long been absolute, the company's recent struggles may be weakening the company's iron lobbying grip. Frontier was most recently criticized for firing a seven-year employee because in his other, part time job (as President of the West Virginia Senate) he voted for a bill that would have brought additional competition to the state.

It should be made clear that this kind of corruption is par for the course instates, though larger ISPs traditionally have enough lobbying and PR talent to obscure the often grotesque fealty many (most?) state lawmakers have to one thing and one thing only: ISP campaign contributions.