Cisco 3945 router

The saga of West Virginia’s use of $126.3 million in federal stimulus funds to build better broadband is coming under increasing scrutiny this week as the state’s legislative auditor demanded to know who approved the controversial purchase of $24 million for Internet routers many institutional users say are incompatible or too costly to run.

Aaron Allred has given Homeland Security director Jimmy Gianato, administering the broadband project, until Dec. 21 to provide answers.

More than 1,000 Cisco routers valued at $22,600 each were purchased with taxpayer funds for “community anchor institutions” including schools, public safety, and library users. Why those specific routers were chosen and who approved the purchase have gone unanswered. The Charleston Gazette reports just one router model was considered — one designed for hundreds of concurrent users, despite the fact many rural libraries and other institutions maintain as few as three computer terminals. The auditor also wanted to know why they were purchased all at once, forcing the state to store them for an extended period.

“How come representatives of WVNET [the state’s Internet services agency] were not consulted?” the auditor asked. “How come the Cisco 3945 routers were not right-sized for the areas they were to be installed? Who made the suggestion to buy one size, and who made the decision?”

The auditor also wanted to know why the state appears to be vastly exceeding its budget to upgrade a wireless emergency communications network. The state is on track to spend $50 million for an upgrade it budgeted $30 million to complete.

The newspaper continued to receive word the costly routers are being rejected by a growing number of institutions.

• The West Virginia State Police can’t use 70 routers assigned to detachments because the devices aren’t compatible with the agency’s voicemail system;
• More than 160 libraries have declined to hook up the routers to a new high-speed fiber-optic network because the state Library Commission can’t afford to pay for faster Internet service;
• An additional 175 routers remained boxed up in storage – more than two years after they were purchased.

The state is hurrying to spend the remaining grant funds available to it before the federal government’s Jan. 31 deadline. One state official planned to appeal to the federal government for an extension, blaming the impact of storm damage from Hurricane Sandy.

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.

Still keeping their fingers on the pulse of West Virginia’s broadband.

The state of West Virginia has a money problem.

In 2009, the state applied for and won a $126 million federal Broadband Technologies Opportunity Program (BTOP) grant to expand broadband service in a state plagued with some of the worst Internet access around. That grant will expire Jan. 31, without all of the money spent and equipment in place.

Whatever money is left unspent will be returned to the federal treasury and lost for good. That represents the absolute worst-case nightmare scenario for government officials loathe to leave money on the table. As a result, the state continues to hurry depleting the remaining grant funds before the clock runs out, even if it results in controversial spending decisions.

Last week, the chairman of the West Virginia Broadband Deployment Council openly admitted the state does not have a unified, coherent broadband deployment plan and has been running the broadband expansion effort on an ad hoc basis. That’s a big mistake in the eyes of Dan O’Hanlon, a retired Cabell County circuit judge who leads the Council.

It should not be this difficult. Ask virtually any consumer in rural West Virginia about what needs to be done and the answer is always the same: expand access in unserved areas and raise speeds for those who already have the service.

Unfortunately, $126 million of consumers’ tax dollars will be spent without really doing either.

The Obama Administration’s efforts to expand rural broadband came with lofty rhetoric, but far too often failed to directly address the problem. Consumers and small businesses want Internet access, and the local phone company simply won’t deliver it. Forget about cable broadband — most rural areas without Internet access are not served by any cable operator.

Phillip “Verizon and Frontier have built West Virginia’s taxpayer-funded broadband network in their own image” Dampier

That leaves the federal government in the position of trying to fund rural Internet connections in ways that don’t appear as blatant corporate welfare — paying off phone companies to provide service where they have simply refused for revenue and cost reasons. Competitors are also outraged at the precedent of directly subsidizing certain players but not others, and a lot of taxpayers might question why their tax dollars are going to the phone company.

As a result, the government has discovered a politically palatable alternative: throwing money at non-controversial “institutional” networks built to serve local governments, hospitals, public safety agencies, libraries, and schools. They also have political cover funding obscure “middle mile” networks that interconnect telecommunications company offices, but don’t directly serve any homes or businesses.

Since most people don’t understand the differences between these types of networks and the services they actually provide, broadband expansion projects offer politicians headache-free ribbon cutting ceremonies, applause, and positive publicity from local media reports that mistake institutional and middle mile networks with broadband finally coming to rural towns and villages. Long after the cartoon-sized ribbon-cutting scissors are put away, rural residents still find themselves stuck with dial-up or satellite fraudband.

Last week, the Joint Committee on Technology overseeing the BTOP grant learned the state lacks a plan to get the most broadband bang for the buck, despite hiring some big dollar Verizon subcontractor-consultants that are supposed to be experts at this kind of thing.

As Stop the Cap! reported in May, the state decided to spend $24 million of taxpayer money to buy 1,064 overpowered Cisco routers built (and priced) for big city university use. Imagine the surprise of rural schools and libraries when routers valued at $22,000 each arrived to serve a handful of concurrent users that would have been just as well-served with equipment you can find at Best Buy. Those routers were coincidentally supplied by a familiar vendor: Verizon Network Integration.

Two years later, more than 300 of those routers were in storage, unused. As of this week, 175 are still there.

This $22,000 router, paid for at taxpayer expense…

Two rural librarians in May told Stop the Cap! they were in a quandary over the equipment installed in their tiny libraries because they had no idea how to switch them on, much less maintain them over the long term. Even worse, both told us, they cannot begin to afford the ongoing monthly service fees that are required to participate in the new broadband network.

“We are getting a Hummer network on a Kia operating budget,” one librarian told Stop the Cap! last spring. “The network sounds great, but in our case we have to find the money to pay the bill to run it every month, and that money is hard to find in a library with five outdated public terminals.”

Seven months later and not a lot has changed.

“We have complained to our local leaders this has created more problems for us than it solved,” that same librarian, who could not use his name because of local politics, told Stop the Cap! “If you have worked in government or community service as long as I have, you cringe whenever you have one of these grants because you have to follow the federal government’s rules and you end up spending the money where it least needs to be spent.”

…will provide service for this rural library’s four public terminals. (Image: West Virginia Gazette)

Committee members echoed that sentiment, observing facilities are ending up with equipment they don’t know how to use or cannot afford because monthly service charges for upgraded broadband from Frontier Communications, the state’s largest phone company, are unaffordable.

One proposed solution to cut further taxpayer expense would be to sell the excess network capacity, deemed significant in many communities, to third party Internet Service Providers to directly resell to individual homes and businesses. After all, taxpayers are footing the bill for the $126 million grant that largely paid for the network and independent ISPs would help solve the problem of extending broadband to the unserved.

No deal. Frontier claims it is selling the project broadband access far below normal commercial rates, offering high capacity speeds at an unspecified “entry-level” price. Allowing third party companies to resell that service would put independent ISPs in direct competition with Frontier.

Unfortunately, well-intentioned members the West Virginia Broadband Deployment Council, the Joint Committee on Technology, and other government officials are in over their heads and increasingly appear captive to the design, recommendations, and implementation of a network plan heavily influenced by high-paid Verizon consultants and implemented on a broadband network owned and operated by Frontier Communications.

That left Gale Given, the state’s chief technology officer claiming critics of earlier spending decisions were engaged in “second guessing.” With the expensive routers mostly already in place, Given offered it was better for schools and other institutions to have more capacity than they need now so they won’t be hamstrung if they ever want to expand.

“Only one problem: Ms. Given assumes we can afford to turn the key on the network they are building us now,” said one librarian this week. “Only we can’t. Worrying about what we can do tomorrow is pointless when we can’t even afford to do it today.”

Consultant payday

While rural West Virginia waits for broadband service, more than $1 million in federal tax dollars devoted to rural Internet expansion is instead paying for consultants, most who live out-of-state.

The Charleston Gazette-Mail reports state officials paid out huge sums to a network of consultants, many employed by Verizon Communications, ostensibly to assist with its $126.3 million federal grant to improve broadband to “anchor institutions.” But critics wonder whether the money, which will ultimately not deliver a single new broadband connection to any individual home or business, is redundant and an example of wasteful government spending.

Among the recipients:

• Perry Rios, a Verizon employee who resides in Denver, was paid $512,000 in 2011 and is on track to earn another $329,000 this year helping the state figure out how to spend the money before the clock runs out. Rios has traveled to West Virginia 47 times since the summer of 2010. Total tab to taxpayers: $731,770 so far for just over two years of subcontracting work;
• Verizon network engineer Lloyd Draper, who resides in Virginia, earned $252,075 in consulting work. Clarence Turning, who lives in Connecticut, has received $143,490. Two other Verizon workers contracted as project managers both earned nearly $100,000 each.
• Verizon demands $250/hour for consulting work in the state it abandoned in 2010 when it sold off its landline network to Frontier Communications.

Questions are being raised about the necessity of the Verizon contractors because Frontier Communications, tasked with building the institutional fiber network, already has project managers and other workers with nearly identical job responsibilities. State officials seem to suggest Frontier’s employees are not up to the task.

“This work goes far beyond our current staffing resources,” Gale Given, chief technology officer for West Virginia state government told the Gazette. “These professionals are necessary to provide engineering, project management and other functions, and to coordinate the various parties that are involved in the grant.”

In May, Stop the Cap! reported that the stimulus-funded broadband expansion project was already mired in controversy over earlier spending decisions that included high-powered, expensive routers for rural schools and libraries that sat unused for two years and fiber broadband built with taxpayer funds that rural institutions could not afford to maintain once taxpayer funding ran out.

The U.S. Department of Commerce’s Inspector General and West Virginia Legislative Auditor are reviewing the state’s use of the stimulus funds.

According to the newspaper, West Virginia is using its $126.3 million federal stimulus grant to purchase Internet routers and bring fiber-optic broadband to more than 1,000 “community anchor institutions” — schools, libraries, 911 centers, state agencies, police barracks, health centers, and other public facilities. The money, which was awarded in 2010, also will pay to upgrade an existing wireless Internet tower network. The network will not provide service to individual homes or businesses.

State officials also told the newspaper the $1.3 million spent on the Verizon consultants wouldn’t hamper the broadband expansion project. The state expects to finish the $126.3 project with $9 million in leftover funds. The state has until Jan. 31 to spend the stimulus money, or risk having to return unspent funds to the federal government.

Comcast has announced it is opening up free Wi-Fi access to everyone in Hurricane Sandy’s impact zone, whether Comcast customers or not.

A Comcast representative tells Broadband Reports the free Wi-Fi access is available in affected communities in Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Virginia and West Virginia.

• Non-XFINITY Internet customers should search for the “xfinitywifi” network name and click on the “Not a Comcast subscriber?” link at the bottom of the Sign In page.
• Then select the “Complimentary Trial Session” option from the drop down list.
• Users will be able to renew their complimentary sessions every 2 hours through Wednesday, Nov. 7.

For a map of XFINITY WiFi hotspots, which are located both indoors and outdoors in malls, shopping districts, parks, and train platforms, please visit XFINITY Wi-Fi.

(Complimentary XFINITY Wi-Fi service may not be available in Partner Wi-Fi Hotspot locations).