W.Va. may not receive broadband funding
Most of W.Va. isn't remote enough to qualify for program that aims to boost broadband
by GeorgeHohmann
Daily Mail Business Editor
August 4, 2009
CHARLESTON, W.Va. -- Dave Armentrout, chief operating officer of telecommunications provider FiberNet, is concerned that West Virginia may miss out on the $7.2 billion in federal stimulus money aimed at deploying broadband in rural and remote areas across the nation.
The way "remote area" has been defined by the federal agencies overseeing the program has eliminated most of West Virginia, "which we all know is ridiculous because West Virginia ranks in the top 47 or 48 states un-served by broadband," Armentrout said.
Indeed, a map released last week by Connect West Virginia shows that only two areas in the state - one centered in Webster, Pocahontas and Randolph counties and another centered in McDowell County - qualify as "remote areas" under the definitions released by the U.S. Department of Commerce's National Telecommunications and Information Administration and the U.S. Department of Agriculture's Rural Utilities Service.
States will not receive money based on a set formula. Rather, the money each state receives will depend on the applications for projects that are approved. Applications will be measured, in part, on what percent of the proposed broadband service area is rural and what percent is remote.
Armentrout said the rules have been written so a state like Texas has lots of "remote areas," while West Virginia has few.
His company also is concerned that there is a two-year deadline from the receipt of money to project completion. There are about 150 utility poles in a mile, and some rural projects will likely span several miles. Armentrout said engineers must survey each pole involved. That takes time. The owner of the poles - typically a utility - must then approve the planned use of its poles.
"We have waited for over a year for the work to be done," he said. "Imagine if 25 or 30 companies are all filing applications to pole owners. It is just not good sense to expect Verizon and everyone else who is struggling right now to maintain service to take on some big initiative. It's just not possible."
In addition, Armentrout is worried because stimulus money recipients must build a sustainable plan. Gandeeville, which is near Spencer, illustrates the problem, he said.
"The area would qualify as remote so you could get funding. Spencer and Walton have broadband. Gandeeville, which probably has 130 to 150 homes, sits in the middle.
"If you decided to go after Gandeeville, you would have to install eight miles of fiber from Spencer. That would cost you about $30,000 a mile or $240,000. Then you would put an antenna up for wireless or whatever you're going to put at the end.
"If you figure 40 of the homes take your broadband service at $30 a month, that's $1,200 a month or $14,400 a year in revenue. But you've got eight miles and at 150 poles a mile, that's 1,200 poles. The fee to attach a line to a pole is $14 a year.
"So you've got $16,800 in annual pole fees. You can't generate enough revenue to pay just for the attachments. So even if you do find a remote area, you can't build a sustainable model.
"The 'last mile' connects to the consumer," Armentrout said. "When you do the wireless antenna, that's the 'last mile.' You're building the 'middle mile' when you build from Spencer to Gandeeville.
"The only thing folks can do is build the 'middle mile.' I expect a lot of start-up companies or companies that don't own facilities will take advantage of the stimulus funding to build middle-mile networks. This is broadband to nowhere.
"At the end of the day consumers are paying for this, and if I'm a consumer I want a box in my house that's giving me Internet," he said.
Armentrout noted that even though maps showing the areas that qualify for funding have been available for only a short time, the deadline to apply for stimulus money is Aug. 14.
"I expect this to keep unfolding in more and more disasters," he said.
Brian Mefford, chief executive officer of Connected Nation, won't argue that the stimulus programs for broadband face challenges.
Connected Nation is a national non-profit whose mission is to expand broadband availability and use. The organization is working with West Virginia and companies in the state to advise and help implement programs that fulfill the mission. Connected Nation's West Virginia subsidiary is Connect West Virginia. More information is posted online at www.connectwestvirginia.org
The agencies involved are doing their best to interpret Congressional intent, which is to stimulate the economy and build broadband in un-served and under-served areas, Mefford said.
He said if an application is rejected by one federal program, it could be considered by the other.
Mefford said the agencies have set up a process whereby money is going to be spent in three phases.
"If it comes back in such a way that in the first phase it is clear the rules have been too stringent and haven't accounted for unique state factors, it's my understanding they can make adjustments in the later phases.
"This is not a simple or easy proposition for providers. We're talking about very detailed applications that have to be submitted in very tight time frames for areas that are challenging to serve.
"Part of what we do is make ourselves available to providers to work with those data issues as they need assistance. We don't just publish maps and wish everybody well. To the extent there's help needed with interpretation and integration, those are things we work with the state and the providers to get done."
Verizon is the largest telecommunications company in the state. A Verizon spokeswoman referred questions about the broadband programs to Frontier Communications. Frontier is in the process of buying Verizon's wire line business in West Virginia.
Frontier has been promoting itself as a leader in rural broadband deployment. Company spokesman Steve Crosby said, "We're working on the current footprint that we have in the state and in other states. We're also working with Verizon and in partnership with the state of West Virginia to see what we can do in terms of the application. We're working feverishly to try to meet that Aug. 14 date."
Sen. Jay Rockefeller, D-W.Va., was instrumental in getting much of the stimulus money. His office announced that he will participate in a broadband forum on Sept. 28 at the Marriott, "where I hope we can focus in on the very real needs that still exist and what we can all do - the federal government, the state, and private companies - to meet them."
The senator's office said he "is committed to facilitating the flow of information to potential applicants and maximizing Recovery Act dollars to the state."
According to Connect West Virginia, broadband service is available to 81 percent of West Virginia households. A study last year by Connected Nation said West Virginia stands to see a $616 million economic impact by accelerating broadband availability and use.
Gov. Joe Manchin recently said he remains committed to the goal of having the state "wired for high-speed Internet, from border to border, by the year 2010."
In June the Internet Innovation Alliance, a coalition of business and nonprofit organizations that wants broadband Internet access for all Americans, picked Manchin for its inaugural Broadband Innovator Award. The alliance praised Manchin for creating a council to track broadband access and for setting up a fund that pays groups and others who successfully apply to expand access in un-served or under-served parts of the state.
Contact writer George Hohmann at or 304-348-4836.