Marshall

Karen Marshall, Vermont’s appointed “broadband czar” and head of ConnectVT has accepted a lucrative job offer from one of the broadband providers she formerly oversaw.

Marshall’s trip through the revolving door from public servant to the private sector she helped regulate will land her as the new president of VTel Data Network.

Raising eyebrows across the state is the fact her new employer received $116 million in broadband stimulus grants in 2011 to expand service in rural Vermont. Less than two weeks ago, Marshall was praising VTel for another $5 million state grant from the state’s telecommunications authority to expand rural cell service in the state. VTel is the largest recipient of taxpayer-financed grant funding in Vermont.

VTel executives said Marshall would be a perfect fit for the company that owns a fiber network in the state with connections to New York, Montreal, and Boston.

VTDigger called Marshall, a former Comcast employee, a one-woman enforcer for the current administration’s broadband goals:

Her job has been to ensure that state and federal agencies, private companies and Vermont municipalities work together to meet the governor’s 2013 deadline.

The VTel project is key to that effort. No other company has received as much federal funding. ECFiber, a fiber-optic company, Burlington Telecomm and FairPoint are also expanding broadband in the state.

ConnectVT is widely viewed as Shumlin’s alternative to the Vermont Telecommunications Authority, which is dominated by former Gov. Jim Douglas appointees. After four years of state funding, the authority failed to make much progress on broadband expansion, in part because of corporate disinterest in investing in expensive rural broadband development. It’s only been in the last few years that private companies were awarded enough federal funding to make extending broadband access to very rural parts of the state financially viable.

The nation’s largest broadband stimulus grant recipient has turned a $126.3 million taxpayer funded broadband expansion program into an “orchestrated train wreck,” charged West Virginia Delegate Nancy Guthrie (D-Kanawha) on Monday.

West Virginia Homeland Security Director Jimmy Gianato defended his management of the project before a joint state House-Senate technology committee just learning it had been scaled back, dropping more than 400 sites that were slated to have fiber broadband upgrades Gianato claimed they already had.

Gianato defended the project, noting the original grant proposal was held up by the Commerce Secretary as one of the best-written proposals in the country.

Lawmakers did not criticize how the proposal was written. Instead, they questioned how the project was administered and how the money was spent.

“We’ve done everything the grant said we would do,” Gianato countered.

Many of the questions surrounded the decision to purchase 1,064 Cisco routers in 2010, which cost taxpayers $22,600 each, and were rejected by more than a few intended recipients. Several hundred routers ended up in storage, unused.

Still murky is why project managers only considered a single, expensive Cisco-brand router recommended by Verizon-employed consultants and ultimately purchased directly from Verizon.

Guthrie

Gianato claimed the federal government tied his hands requiring West Virginia’s broadband project be “shovel-ready.”

“All of the equipment was bought off contracts that had been competitively bid,” he told the conference.

But project managers and consultants can custom-tailor specifications that make it impossible for vendors to specify anything other than the Cisco router Verizon conveniently happened to sell.

Several members appeared unmoved by statements defending the decision to deploy identical, expensive routers to every West Virginia anchor institution, despite the fact they were designed to serve a minimum of 500 concurrent users and often ended up in rural community libraries with less than five public terminals.

Gale Given, the state’s chief technology officer, supported Gianato.

“The team determined that capacity should be provided to permit these community anchor institutions to deploy the applications that were required to meet future needs, not their current needs,” Given wrote in a letter to state lawmakers. “It would be a mistake to determine in advance that entities with low bandwidth requirements today will not have high bandwidth requirements in the future. To have shortchanged our smaller, more rural areas would have gone against the entire intent of the program.”

But now West Virginia taxpayers will be on the hook to cover the costs of making the new equipment compatible with existing equipment in certain state facilities.

At least 70 State Police detachments will begin using the once-rejected routers once the state spends $90,000 for new modules to update the agency’s voicemail system, which is not compatible with the routers.

State libraries also won a break from Frontier Communications, who agreed to supply fiber broadband service to 170 mostly small, rural libraries that could not afford the fiber upgrade. Frontier has agreed to supply the fiber service for the same price libraries pay for their existing service.

Critics of the broadband stimulus project question why the state spent money on unnecessary equipment and failed to identify anchor institutions that already had adequate service.

Another round of miscalculations by project managers overseeing a $126.3 million federal broadband stimulus grant nearing expiration will cost nearly half of West Virginia’s anchor institutions their promised fiber broadband connections.

As a consolation prize, state officials are promising those left out will receive new routers paid for by federal taxpayers whether the institutions want them or not.

As the deadline nears for West Virginia to finish spending their 2010 federal broadband grant, the state has been on a spending spree. Just last week, officials designated 175 new sites as “community anchor institutions” qualified for upgraded Internet service. But the Charleston Gazette found just seven of them will receive fiber broadband upgrades. The rest are getting expensive routers that the state has been trying to unload for nearly two years or new routers the state will spend additional grant funds to purchase.

Among the top vendors paid with grant funds: Frontier Communications, which provides connectivity, and Verizon Communications, the company that supplied the overpowered routers.

“Due to the amount of time required for environmental assessments and fiber builds, we determined that we would limit most of the additional sites to ‘router-only’ so that we could complete the build on time,” Diane Holley-Brown, a spokeswoman for the state Office of Technology told the newspaper.

The state defended its decision to scale back on fiber upgrades pointing out many of the institutions targeted already had the service. That left the state scurrying to find new projects for unspent grant funds.

The state’s latest award of Internet routers is separate from the earlier revelation West Virginia had over-purchased equipment that either proved unnecessary or duplicated equipment already installed.

Eric Eyre’s watchdog reporting in the Charleston Gazette over how the state’s $100+ million broadband grant has been spent has triggered a federal and state investigation.

In 2011, then Gov. Joe Manchin promised that federal broadband stimulus funding would provide fiber connectivity to 1,064 schools, libraries, public safety and health care institutions. When the project funding expires at the end of January, only 639 institutions will be slated to receive fiber upgrades.

Schools are among the hardest hit institutions. At least 60 percent of those promised upgraded Internet service will only receive a new router instead.

The project has remained under scrutiny since the Gazette revealed $24 million of the grant was spent on 1,064 Cisco routers that were never intended for use at many of the institutions targeted to receive them. Hundreds of the $20,000+ routers were stored, unused, in state buildings for at least two years waiting for a new home.

The U.S. Department of Commerce’s Inspector General and West Virginia Legislative Auditor are reviewing the router purchase.

When the grant expires West Virginia officials have made it clear those institutions left without fiber upgrades should not hold their breath waiting for the state to pick up where the federal government left off. The reason? The grant money is nearly gone and the state is not interested in financing additional upgrades.

Cable subscribers in Natchez, Miss. are scratching their heads wondering why AT&T will neither confirm nor deny whether its fiber to the neighborhood U-verse service is coming to a neighborhood near them.

AT&T says if it told customers where the service was coming, it would give away vital information to its competition — the cable and satellite companies.

AT&T spokeswoman Sue Sperry says her competitors will stop at nothing to hang onto current customers, even if it means using predatory below-market-rate pricing.

“We’ve learned from experience that if they know what our footprint is, they go in and do retention offers and pretty much give their service away for next to nothing and then we can’t compete,” Sperry told the Natchez Democrat.

But considering its biggest competitor is locally-hated Cable One, a lot of customers would still be ready to switch even if AT&T sent the cable company its detailed business plans in advance.

“Unless you spend your weekends at the Bondage Bordello, there is nothing enjoyable about dealing with Cable One in Mississippi,” says Stop the Cap! reader DeWayne. “Last summer when their system went up and died on the folks over in Columbus, even the guy running it couldn’t tell when it was coming back.”

Top secret.

DeWayne started reading Stop the Cap! when we covered Cable One’s massive failure in August 2012 that brought all of its services in Columbus down while the company incredibly waited for express delivery of a replacement part. When customers could not get answers from Cable One over the phone, they lined up outside the local cable office only to learn from company general manager David Lusby he had no idea how many customers were affected by the outage or when the cable system would be back up and running.

“I hate AT&T but I hate Cable One more,” DeWayne said. “It is annoying that they won’t tell us when U-verse is coming to our neighborhood.”

Sperry claims AT&T U-verse is more robust than cable or satellite because it is powered by phone lines.

“That was one of the things during the hurricane, U-verse didn’t go out,” she told the newspaper. “It’s delivered through a phone line, and the phones are the last to go out.”

But unfortunately for customers, AT&T says it only rolls out U-verse in “a measured and slow way,” forcing customers to continually visit att.com and manually check availability using their home address.

But Sperry told the newspaper once customers get the service, they remain loyal to it. That may be especially true in smaller communities in Mississippi that cope with second rate cable operators not known for offering robust or affordable service.

Time Warner Cable is expanding its footprint in the capital region of New York with the acquisition of independent Princetown Cable Company, which serves around 600 subscribers in Princetown, Duanesburg and Rotterdam in Schenectady County.

Time Warner already manages cable service for most cable subscribers around the Albany-Schenectady region, but bought Princetown Cable to further solidify its holdings.

Princetown Cable began service in 1990 serving rural areas ignored by then-dominant TCI Cable (later AT&T Cable, then Comcast).

Most customers signed up to get better reception of television signals from nearby Albany and Utica.

Princetown Cable’s lineup of around 100 channels ($82.50/month for digital cable) is dwarfed by Time Warner, and its broadband service is comparatively slow and expensive:

Time Warner Cable agreed to pay $1.2 million for the system, which breaks down to around $2,000 per subscriber.