DANA Waldo, senior vice president and general manager of Frontier Communications in West Virginia, submitted a wholly disingenuous commentary regarding the state's progress in implementing the National Telecommunications and Information Administration's $126.3 million grant to West Virginia.
Citynet is compelled to respond to that misleading commentary.
It is important to point out in the first instance that Citynet is not attempting to prevent the expansion of broadband access in West Virginia. To the contrary, Citynet enthusiastically supports broadband expansion.
However, the expenditure of taxpayer money should be undertaken to benefit all West Virginians, not just Frontier Communications. As the state's plan is currently structured, Frontier will be granted at least $30 million in taxpayer money to expand its network.
In fact, Commerce Secretary Kelley Goes has advised Citynet that the amount that will be given to Frontier is closer to $40 million.
Once Frontier spends the $40 million of taxpayer money to expand its network, it will be the sole owner of that network and the State will have no ownership rights. Thus, Frontier's monopoly in the State of West Virginia will have been financed with taxpayer money.
Frontier will then sell services to state entities such as schools and government offices at the existing exorbitant prices. Those prices will never decrease, because no competitor can afford to spend $40 million or more of its own capital to build out its network.
Citynet, however, has provided the state with a plan for the expenditure of the taxpayer money that will expand broadband access in the state while at the same time lowering the cost of broadband access by 70 percent to 90 percent.
It is true that competitors, like Citynet, have existing contracts with Frontier for access to fiber facilities, but given that Frontier's new network will be built with your money, it is Citynet's position that those facilities should be made available to competitors at a nominal cost so that competitors can make their services available to the public at large at much lower prices.
DANA Waldo, senior vice president and general manager of Frontier Communications in West Virginia, submitted a wholly disingenuous commentary regarding the state's progress in implementing the National Telecommunications and Information Administration's $126.3 million grant to West Virginia.
Citynet is compelled to respond to that misleading commentary.
It is important to point out in the first instance that Citynet is not attempting to prevent the expansion of broadband access in West Virginia. To the contrary, Citynet enthusiastically supports broadband expansion.
However, the expenditure of taxpayer money should be undertaken to benefit all West Virginians, not just Frontier Communications. As the state's plan is currently structured, Frontier will be granted at least $30 million in taxpayer money to expand its network.
In fact, Commerce Secretary Kelley Goes has advised Citynet that the amount that will be given to Frontier is closer to $40 million.
Once Frontier spends the $40 million of taxpayer money to expand its network, it will be the sole owner of that network and the State will have no ownership rights. Thus, Frontier's monopoly in the State of West Virginia will have been financed with taxpayer money.
Frontier will then sell services to state entities such as schools and government offices at the existing exorbitant prices. Those prices will never decrease, because no competitor can afford to spend $40 million or more of its own capital to build out its network.
Citynet, however, has provided the state with a plan for the expenditure of the taxpayer money that will expand broadband access in the state while at the same time lowering the cost of broadband access by 70 percent to 90 percent.
It is true that competitors, like Citynet, have existing contracts with Frontier for access to fiber facilities, but given that Frontier's new network will be built with your money, it is Citynet's position that those facilities should be made available to competitors at a nominal cost so that competitors can make their services available to the public at large at much lower prices.
Frontier has flatly refused Citynet's proposal and intends to require competitors to pay inflated prices for access to fiber facilities it built for free.
As currently structured, the state's plan for expanding broadband will do nothing more than expand Frontier's monopoly, and will not address the fundamental problem of the high cost of broadband access.
Citynet is not asking for any special deal from the state or Frontier. Citynet is merely asking that taxpayer money be spent to benefit as many West Virginians as possible.
As it currently stands, the state's plan is for Frontier to receive $40 million in taxpayer money. That money will be used to expand only Frontier's network so that it can further its monopoly, and Frontier will not lower its prices to the state and competitors by even a single penny.
It is Citynet's humble opinion that a better solution would be to implement a plan that will result in expanding broadband to all West Virginians and not just state entities, and will provide broadband access at a cost 70 percent to 90 percent lower than that offered by Frontier.
We at Citynet suspect that the taxpayers agree as well.
Martin is president and chief executive officer of Citynet.
