Citynet to build $13.5 million Internet upgrade
CHARLESTON, W.Va. -- The state Office of Technology plans to award an estimated $4 million in leftover federal stimulus funds to a Bridgeport telecommunications company that plans to upgrade West Virginia's Internet capacity.
The excess funds will come from a $126.3 million federal grant the state has used to expand high-speed Internet in West Virginia.
Bridgeport-based Citynet will set up nine "GigaPoP" facilities that funnel data and connect to the national Internet "backbone" network in Pittsburgh and Columbus. Citynet's $13.5 million project is designed to increase Internet speeds in West Virginia and lower the cost of subscribing to broadband service.
"It's going to bring core Internet backbone connectivity to West Virginia," said Citynet CEO Jim Martin, who has sharply criticized high-ranking state officials over how they previously used the $126.3 million in stimulus funds. "By building this robust network, it will allow Internet costs to go down and make it affordable for everyone from residential customers all the way up to large institutions."
The National Telecommunications & Information Administration - a federal agency overseeing West Virginia's $126.3 broadband expansion grant - is reviewing Citynet's project.
The company plans to start installing equipment within three weeks and expects to finish the project by the end of the year. Citynet will contribute $8 million to the project, Martin said.
The $4 million in stimulus funds and a $1.5 million credit that the state has for Cisco equipment will pay the remaining costs.
The state will purchase and own the equipment. Citynet will operate the network.
"It's a public-private partnership," Martin said. "These GigaPoPs [gigabit points of presence]will provide points of interconnection for other broadband providers to connect to the state of West Virginia's network. It's going to create competition for Frontier Communications at the local level."
Frontier Communications, West Virginia's largest Internet services provider, objected to Citynet's project, according to state officials. The company asked that the state use the leftover stimulus funds to bring high-speed fiber-optic cable to additional public facilities across the state. A Frontier spokesman declined to comment on Citynet's project Thursday.
Since 2010, Martin has criticized state officials for using the $126.3 million in stimulus funds to build a fragmented broadband network that solely benefits Frontier. A consulting firm hired by Gov. Earl Ray Tomblin's office reached the same conclusion in a preliminary report released last year.
Frontier dismissed the report, calling it "worthless." The company noted that federal officials rejected the same allegations - first raised by Martin in a letter to the NTIA - in November 2010.
Martin also has criticized state officials for spending $24 million on oversized Internet routers for more than 1,000 public facilities. The routers cost $22,600 each.
Earlier this year, the state Legislative Auditor released a scathing report, finding that state officials wasted at least $7.9 million - and up to $15 million - on the router purchase. The state bought routers designed for universities and large businesses, but installed many of the devices in small libraries with only a handful of computer terminals.
Citynet says the GigaPoP facilities would provide West Virginia with direct connections to the lightning-fast national Internet system, according to the proposal submitted to the state technology office.
The company also predicts that the project will spur economic development by prompting large companies and data centers, which typically require high-capacity Internet service, to locate in West Virginia.
Charleston, Huntington, Parkersburg, Morgantown, Martinsburg, Beckley, Bluefield, Bridgeport and Wheeling will host GigaPoP sites.
"The GigaPoP facilities are located in West Virginia's primary economic development zones where having access to enhanced broadband services is critical for job retention and new job creation," Citynet wrote in its proposal.
At least a dozen companies -- including Suddenlink Communications, nTelos and Shentel -- have expressed interest in tapping into the new high-speed GigaPoP network, according to Citynet. Frontier wasn't one of them.
"It's going to be open access," Martin said. "It's a meeting point for everybody."
Reach Eric Eyre at email@example.com or 304-348-4869.