Areas in yellow are Wireless ISP projects seeking funding to expand. Most of them are in the panhandle region of northern W.V. The areas shaded in purple are grant proposals to promote the benefit of subscribing to broadband service.

Frontier Communications has forced a West Virginia broadband improvement council to temporarily suspend plans to distribute $4 million in funding to independent ISPs planning to expand service in rural areas after a company official objected that the funding would duplicate broadband service Frontier already provides itself or through its satellite broadband partner.

The West Virginia Broadband Deployment Council ended up postponing its broadband awards program after Frontier Communications executive Dana Waldo, who serves on the Council, objected to the money being distributed.

Waldo noted state code prohibits the board from awarding grants for projects in areas already provided service.

That state code, passed by the West Virginia legislature in 2008, came courtesy of a coalition of phone, cable, and broadband equipment companies like Cisco working with then-Gov. Joe Manchin to push the broadband bill into law. Verizon was the most influential supporter, serving as West Virginia’s largest telecommunications company before selling its landline network to Frontier.

The code Waldo refers to:

The council shall exercise its powers and authority to bring broadband service to those areas without broadband service. The council may not duplicate or displace broadband service in areas already served or where private industry feasibly can be expected to offer services in the reasonably foreseeable future. In no event may projects or actions undertaken pursuant to this article be used to finance or support broadband or other services in competition with private industry.

The Council relied on broadband map data provided by Frontier Communications to help score and rank projects that appeared to be outside of Frontier’s broadband service area. When the project rankings were first announced in September, Frontier executives immediately claimed their map data was outdated and subsequently updated map data voluntarily supplied by Frontier, not independently verified, showed many of the high-ranking independent projects would compete with Frontier’s DSL service, disqualifying them from further consideration.

Waldo

Waldo declared he was not comfortable with the broadband awards because “many of those areas are currently served or can be reasonably served by Frontier.”

State officials were hopeful a new list of qualifying projects could be developed in accordance with the latest Frontier map data and were scheduled to be announced on Dec. 12.

But Waldo noted that Frontier could end up unhappy with many of those projects as well.

He noted Frontier technically already offers every household in West Virginia broadband access through its new partnership with a satellite Internet Service Provider. Frontier began offering rural customers satellite Internet service earlier this year.

“If our mission is to increase broadband access, we need to consider satellite,” he told the Council. “We have hundreds of [satellite] customers.”

While Frontier considers satellite broadband a solution in the most rural areas where it is unlikely to provide service anytime soon, it could prove even more valuable as a weapon against potential competition in a state that prohibits public funding of competing services.

The biggest losers should Frontier prove its case are rural Wireless Internet Service Providers, who have requested $3.1 million in grants to build antenna towers. An additional $923,000 was expected to fund programs that promote the benefits of signing up for high speed service. Frontier has ties to four of those projects, and has stated no objections to them.

Frontier has also not objected to the much larger $126 million federal grant to construct an institutional statewide fiber broadband network. Frontier is the primary vendor that will sell access on that network.

CenturyLink CEO Glenn Post does not think much about AT&T’s plans to shift its most rural landline customers to wireless in its efforts to decommission traditional landline service.

“From a regulatory standpoint, that could be a tough go,” Post explained to Wall Street investors on a conference call last week. “There may be some areas that will have better service with wireless in some ways. As far as a competitive threat, we don’t see that being a real issue for us because just the bandwidth requirements and the limited wireless access or capability in a lot of areas.”

CenturyLink, one of four large independent phone companies and owner of former Baby Bell Qwest, is doubling down on its wired infrastructure to reach customers. The company recently announced Phoenix would be the latest city to get its fiber-to-the-neighborhood service Prism TV — the first legacy Qwest market to get IPTV service from CenturyLink. The service soft-launches in Phoenix this month, with a second city in the region or Pacific Northwest slated to get Prism sometime next year.

The company has spent much of 2012 investing in broadband, managed hosting and cloud computing for business customers, and fiber expansion to reach more than 15,000 cell towers across CenturyLink’s national service area, depicted in green on the accompanying map.

But CenturyLink executives stress their investments are “strategic” — made in areas that are most likely to deliver quick returns for the company.

While CenturyLink spends money to secure video franchising agreements in metro Denver and Colorado Springs for Prism TV service, it is moving at “a snail’s pace” to deliver broadband service in northeastern North Carolina’s Northampton County. County officials there anticipate CenturyLink will take years to deploy basic DSL service to communities outside and around Conway and Gaston.

The broadband problem in income-challenged parts of North Carolina illustrate the conundrum for county officials, who have to advocate for broadband improvement while combating misleading broadband maps that suggest access is not a problem in the state.

Donna Sullivan with the Department of Commerce notes that broadband maps in states like North Carolina have a census block granularity which does not always reveal the true picture of broadband availability.

“That means if one household in that census block can receive broadband services, the entire census block is considered covered—even though there very well may be households who cannot receive broadband to that location,” she told the Roanoke-Chowan News-Herald.

Northampton County, N.C.

CenturyLink is in no hurry to expand broadband to the 1,921 households in the county of 22,000 who cannot buy broadband service at any price.

Derek Kelly, a CenturyLink spokesman, said the company is working to expand broadband services in the region, but noted the costs to lay down a fiber network to help reach the unserved is “one of the largest costs.”

That cost is much less of a problem if the customer at the end of the line happens to be a wireless company like Verizon or AT&T.

Company officials admit they are spending enormous sums “investing in fiber builds to as many [cell] towers in our service area as economically feasible.” In the third quarter alone, more than 1,000 cell towers received fiber upgrades for a total of 3,300 so far this year. The company hopes to reach 4,000-4,500 cell towers by New Year’s Eve.

The reason why CenturyLink chases wireless business while allowing rural and income-challenged service areas to go without broadband is a simple matter of economics. Cell phone companies sign lucrative, multi-year contracts for fiber connectivity to cell towers to support forthcoming 4G service. In contrast, CenturyLink was surprised to find an astounding 94 percent of families with children in Northampton are qualified for the company’s special Lifeline Program which delivers slow speed, discounted broadband service for families on public assistance.

Post

For CenturyLink’s more urban and prosperous service areas, the news for broadband service improvements is better.

As CenturyLink continues to extend its middle mile fiber network, broadband speeds are gradually improving.

Over 70 percent of CenturyLink customers can receive at least 6Mbps DSL service, more than 57% can receive at least 10Mbps and 29% can access the Internet at 20Mbps speeds or better, according to Post.

But the more urban and prosperous a service area is, the greater the chance a cable competitor has successfully poached many of CenturyLink’s DSL customers with the promise of better speed.

Post said he recognizes the company must do better to remain competitive.

“We’re shooting for 20-25Mbps for a very large percentage of our areas,” Post said. “But with [pair] bonding, we can virtually double the broadband capacity and speeds in our markets. We’re already doing bonding in a number of markets today. So where we have 20Mbps, we could have 40Mbps.”

CenturyLink’s fiber to the neighborhood network, essential where it plans to roll out Prism TV, can also support faster broadband speeds if a customer wants broadband alone and does not care about television service.

Nationwide, the company added 10,000 Prism TV subscribers in the third quarter and has a total customer base of around 104,000 subscribers. But that represents a penetration rate of just over 10%, hardly noticed by still-dominant cable operators.

CenturyLink executives were asked to comment on AT&T’s strategic plan to transform their landline network announced last week in New York. Post found little in common between CenturyLink and AT&T’s vision for the future and does not think the company has to respond to AT&T’s attempt to redefine rural America as wireless territory.

“We don’t see that as a major investment for us or a major risk at this point.”

West Virginia has returned to broadband mapping the old-fashioned way, with local volunteers fanning out across various areas of the Eastern Panhandle to get a true picture of what broadband service is like on the ground.

The Region 9 Planning and Development Council is helping coordinate the project, currently surveying residents in Berkeley, Jefferson, and Morgan counties. Residents and area businesses can complete a 22-question survey online or on paper, with copies available at most area public libraries.

The Council is trying to ascertain what specific neighborhoods still lack broadband service and also asks current broadband customers to rate the performance of their current provider — like Frontier Communications or a local cable operator. GIS analyst Matthew Mullenax told the Herald-Mail the survey gives a chance for customers to express their views about the speed of their connection, how reliable the service is, and how much it costs.

The West Virginia Broadband Deployment Council is effectively running a mapping “do-over,” to replace the highly-criticized broadband map originally drawn by Connect West Virginia, a state chapter of Connected Nation, that suggested 90-95% of the state had access to broadband when it was produced over three years ago.

Connected Nation’s 2008 map has been criticized for being over-optimistic about broadband availability in West Virginia.

Connected Nation has direct ties to some of the nation’s largest telecommunications companies, and despite its non-profit status, heavily lobbies legislators on broadband-related issues. The group largely relies on data voluntarily supplied by providers themselves, and critics accuse the group of doing little to verify the accuracy of that data. As a result, states are left with inaccurate, over-optimistic maps that suggest broadband availability is not a problem.

Broadband mapping projects can cost taxpayers millions, paid for by federal grants earmarked for mapping projects. But in communities like Paw Paw, W.V., the costs of not having broadband are just as high for local residents who find good-paying technology jobs largely unavailable in the community, which lacks adequate broadband service.

Mullenex hopes once an accurate map can be drawn, the state can create a strategic plan to push for broadband expansion in areas where service is lacking. The Council hopes its efforts will help pinpoint the areas of greatest need, and direct federal and state grant funding to improve broadband service for affected communities.

The West Virginia Broadband Deployment Council released this 2012 map. Areas marked in dark green have no broadband service of any kind, including wireless mobile broadband.

Connected Nation, a broadband advocacy group with ties to some of the nation’s largest telecommunications companies, is accused of rewriting a Florida state budget amendment to divert proceeds from a federal broadband grant to itself.

A growing scandal over broadband map funding and allegations of political maneuvering and favoritism has now extended into the offices of several state Republicans now accused of doing the group’s bidding to change funding allocations in ways that could ultimately threaten Florida’s broadband grants.

Connected Nation’s involvement in the state’s broadband expansion efforts began in earnest in 2009 when the group won a $2.5 million contract to map broadband availability in Florida. A follow-up federal grant for $6.3 million to extend broadband deployment brought the group’s lobbyists back to Tallahassee to secure a “no-bid shot” at that new money for itself, which turned out to be a big surprise to the Department of Management Services, the Florida state agency charged with overseeing the project.

The grant award mandated that money be spent on additional broadband mapping and broadband expansion specifically for libraries and schools. When DMS hired contract employees to manage the project for the next two years, Connected Nation declared war on the effort, considering it their turf.

The Miami Herald called the lobbying battle that then ensued as “an audacious display of lobbying clout [that] got the Legislature to force DMS off the contract and steer the grant to [Connected Nation] instead.”

The newspaper reports the end effect of the bitter feud is a less than useful broadband mapping operation and a threat from the federal government it will yank back what remains of the grant money if things do not improve… quickly.

Connected Nation told the newspaper it defends its position as creating value for taxpayers and citizens. But the group also openly admits its broader goal is to increase broadband usage, which directly benefits its telecommunications partners, which the newspaper says includes AT&T, Verizon, and Comcast.

DMS officials are just as willing to play hardball in the statewide dispute, accusing Connected Nation of producing erroneous broadband maps and being responsible for “repeated performance problems.” They announced last year they would not renew Connected Nation’s contract.

Political observers note DMS probably did not realize who they were dealing with, and Connected Nation’s high powered lobbyists descended on the state capital to pull the rug completely out from under DMS, yanking the entire project away from the state agency and assigning it to another.

Holder

With the help of several Florida Republican legislators and the governor, DMS found itself without a broadband project, as lawmakers transferred it to Florida’s new “Department of Economic Opportunity.” The ultimate decision approving the transfer of broadband matters to an agency that suggests an allegiance to the private sector came from Florida’s governor Rick Scott.

The governor’s office muzzled DMS protestations. Marc Slager, deputy chief of staff for Gov. Rick Scott, acknowledged to the Herald he told DMS to stand down because “we don’t need to have different people from the governor’s agencies advocating an issue.”

Revenge is a dish best served cold, and Connected Nation is not through paying back DMS for interfering in their Florida plans to capture broadband grant funds. The group is taking its time working with several Republican legislators to cut more legs out from under the government agency.

With respect to the $6.3 million broadband expansion grant, the newspaper reports Connected Nation last year simply rewrote a state budget amendment, inserting themselves as the grant winner.

“Attached is a document that reflects conversations we’ve had with Chairman Weatherford, the draft language is consistent with the bill, and it is language we believe the [Legislative Budget Commission] would approve,” wrote Alli Liby-Schoonover, from Connected Nation’s lobbying firm, Cardenas Partners, in February 2011, making the change.

What a broadband mapping group was going to do with the money intended to wire schools and libraries remains unknown.

They're not so great at broadband mapping, but they are excellent at connecting the political dots to get their contract renewed.

The telecommunications industry-dominated Connected Nation, a group created to spur industry-friendly broadband expansion, is at the center of a scandal that cost taxpayers nearly $4 million to produce a broadband availability map critics contend is error-ridden and incomplete.

The non-profit Kentucky company, which historically has close ties to some of the nation’s largest phone companies, has learned how to play political games to win lucrative contracts while producing less-than-useful results, according to a new investigation by the Miami Herald.

When Florida’s Department of Management Services (DMS) decided Connected Nation’s performance in the state was lacking, it decided to let the state’s contract with the group expire and seek other bidders.

That is a remarkable turnaround for an agency that three years earlier took bids from the group’s state chapter — Connect Florida, who estimated the cost of mapping broadband in the state at around $7.1 million.  Another bidder, ISC of Tallahassee was a real bargain, offering to do the project for $2.8 million.  Connected Nation won. So much for awarding contracts to the lowest bidder.

It turned out the judges scoring the two groups were split, until a former BellSouth (AT&T) executive serving as a judge on the panel put his thumb on the scale, awarding an astounding 51 points to Connected Nation, itself shown to have past ties to AT&T.  The other judges scored no more than 15 points in either direction.

Undercut Connected Nation's bid by millions but still lost.

ISC, a homegrown Florida business, was stunned. Managing Partner Edwin Lott told Public Knowledge in 2009:

“Florida’s small businesses are working harder than ever to survive in this challenging economy. ISC, like other small businesses around the country, have had our hopes raised with Congress’s efforts to stimulate the economy with the Reinvestment Act and other initiatives. It originally appeared these initiatives were going to provide regional funding to sustain and promote jobs in the communities served by local and state governments.

“Our raised hopes were dashed as Connected Nation appeared to use its ‘connections’ in Florida to ensure its success in what was supposed to be a competitive procurement.”

DMS officials have apparently learned their lesson (at taxpayer expense), but Connected Nation isn’t going quietly. The non-profit group unleashed a high-powered lobbying campaign directed at the state legislature in Tallahassee to get its contract renewed to continue mapping Florida’s broadband future.

Williams

It worked, but only after the group’s critics at DMS were effectively bypassed. The legislature approved and Florida governor Rick Scott signed legislation that transferred broadband mapping away from the agency altogether, launching a new one — the Department of Economic Opportunity, to handle broadband matters effective July 1.

At least this time, taxpayers will have to pay less. Connected Nation’s latest bid was half of its original price, undercutting other bidders.

Rep. Alan Williams, a Tallahassee Democrat told the Herald price does not matter as much as political connections in the state legislature.

“Is this a favor to Connected Nation and a lobbyist or is this really good government?’’ Williams asked. “Is this really being accountable and efficient to the state of Florida the way the governor wants to be?”

Sen. Don Gaetz (R-Niceville) told the newspaper Florida state government is rife with insider influence peddling, and that appears to be the case with Connected Nation’s contract.

The group’s potent lobbying team included Lanny Wiles, the husband of the governor’s campaign manager; Al Cardenas, the former chairman of the Republican Party of Florida and head of the Conservative Political Action Committee; and Slater Bayliss, a one-time aide to former Gov. Jeb Bush.