Once again, the United States is reporting “impressive gains” in an area where West Virginia reports a loss. In this case: broadband.
According to a report released last month by the Federal Communications Commission, the percentage of West Virginia residents with a high-speed internet connection to their home fell over the last year to 82.2%, a drop of 0.2 percentage points.
West Virginia ranks 48th in the nation, and it is one of only five states that is sliding backward.
The report highlights the state’s failure to build out a modern broadband network — “from border to border,” as then-Gov. Joe Manchin said in 2009.
Robert Morris, chairman of the state’s Broadband Enhancement Council, called it “a very blunt reminder of the work that we have ahead of us.”
The report couldn’t come at a more critical time: amid a pandemic that has exposed the cruel consequences of poor internet connectivity in rural communities, state lawmakers are weighing their most drastic — and perhaps, for once, effective — efforts to combat the problem.
A long decade of Frontier
There are many reasons West Virginia is lagging in the internet race. The state, largely rural and mountainous, does not lend itself to the easy installation of cable or fiber, the economics of which are largely dependent on connecting as many homes per mile as possible. And in 2010, the state made the fateful decision to ally itself with Frontier Communications, a company that has wasted millions in government assistance and siphoned millions in profits from the state to finance ill-conceived expansion plans on the coasts.
When Frontier Communications purchased Verizon’s statewide network of copper telephone lines, West Virginia — concerned with recent reliability issues with Verizon’s network and Frontier’s lack of experience in the state — approved the deal on the condition that Frontier provide a vast majority of its customers with internet.
Frontier did — but then failed to upgrade or adequately maintain its equipment as demand on the network increased. The copper network, which provides internet over DSL, couldn’t provide the speeds necessary for modern internet use — or even meet the basic qualifications of “high-speed” now required by the FCC.
Meanwhile, Frontier sucked up hundreds of millions of federal aid — some at the behest of state officials who had cozied up to the company — to expand its copper network, despite knowing that the technology would soon become obsolete. It admitted in legal filings that instead of using its profits to invest in necessary fiber upgrades in West Virginia, the company spent lavishly on expanding to California, Texas and Florida.
Customers in West Virginia fled, and the strategy collapsed. The company is now bankrupt, leaving its remaining customers with barely-functioning internet — and much of rural West Virginia with no other viable options.
The reality is likely worse than the FCC reports. Their statistics are based on self-reported data submitted by Frontier, and almost no one outside the company trusts it. Speed tests conducted by the state’s Broadband Enhancement Council found that Frontier delivered internet across the state at less than half the 25 megabits per second required by the Federal Communications Commission to qualify as “high-speed.”
So lawmakers want to try a new approach.
The lawmakers’ vision is simple: replace Frontier’s monopoly over the state’s rural internet service with a patchwork of competitors, including West Virginia companies and local governments like cities and counties. A combination of competition and local ownership, politicians reason, will ensure that the state’s communications network is upgraded and maintained long into the future: a task that Frontier has shown itself either incapable or unwilling to do.
And now, the roadmap that lawmakers will take to try to make this happen is becoming clearer. First: provide a leg up for Frontier’s competitors, who, unlike the telecommunications giant, don’t have access to billions of dollars in capital from Wall Street.
Two bills have already been introduced during this year’s legislative session to help achieve this. One, SB 2, would codify into law Gov. Jim Justice’s executive order increasing the amount of loan guarantees the state will offer telecommunication companies. These loan guarantees are crucial because they allow smaller companies to compete for subsidies from the Federal Communications Commission, which looks at a company’s balance sheet in order to determine if it’s capable of delivering on its commitments.
The second, HB 2002, would make it faster and cheaper for telecommunications companies — and local governments — to install fiber by allowing them to piggyback on the poles and trenches of other utilities. This bill has bipartisan support, and has already sailed through committee and will soon be debated on the House floor.
The bill’s sponsor, Delegate Daniel Linville, R-Cabell, summed up its potential impact: “It’s going to speed deployment… it makes more projects feasible.”
But that’s not all the bill would do. It also lays the groundwork for more state and local control of West Virginia’s broadband network, and defines the role of the state’s new Office of Broadband, which will be tasked with mapping the areas of the state that are currently unserved — and underserved — by Frontier and other telecommunications companies.
Historically, this is a role played by the FCC — but their data is flawed. The federal agency also continues to send hundreds of millions of dollars to Frontier — so state officials want to take over the responsibility of identifying underserved areas of the state, a crucial part of any effective grant-making program.
Finally, the bill enshrines in law the ability of cities and counties to compete with telecommunications companies and build their own fiber networks; this is a strategy already being attempted in Putnam County and South Charleston. A majority of states ban the practice, but West Virginia is now actively promoting it.
But where is the money?
Efforts by state lawmakers to fight Frontier are not new. Lawmakers have long chafed at Frontier’s treatment of the state. But this time may be different. This time, lawmakers have promised to back up their rhetoric with money.
In October, the governor stood on the steps of the Capitol, flanked by House Speaker Roger Hanshaw, R-Clay, and other Republican lawmakers, and promised to bring a billion dollars to West Virginia to build better broadband.
But Justice has a history of making grand promises that never materialize, and there have been warning signs that that could happen again. The governor included $50 million in CARES Act pandemic relief funds in the billion-dollar commitment — but used much of it on unrelated projects. The bulk of the remaining funds was supposed to come from the Federal Communications Commission, but the agency has so far committed only $350 million, a result of aggressively low bidding by Frontier as the company promised to build more fiber for fewer subsidies.
And then there’s the $150 million over three years from the state that Justice promised in October. Since making the announcement, the governor has offered no additional details about where the money will come from or how it will be distributed. It wasn’t mentioned in the governor’s annual address, where the governor alluded to “bold steps” he’d already made on broadband while warning “we got to do more.” Nor was it included in a draft budget given to legislators earlier this month.
“I’m looking through [the budget] thinking — OK, doesn’t appear to be a priority — because you’re not talking about it, you’re not giving us a plan, and there’s no money to fund it,” said Delegate Joey Garcia, D-Marion.
But Republican lawmakers said not to worry. The money is coming, House Communications Director Ann Ali said after conferring with Hanshaw in a Capitol hallway.
Linville was also confident that the legislature will find the money. Lawmakers could directly appropriate the money out of the state’s surplus, he explained, which could circumvent some of the laborious budgeting process.
But broadband isn’t lawmakers’ only priority, and whatever plan they come up with will eventually land on the governor’s desk. Justice has made clear that his top priority is reducing taxes, and that he wants to use the surplus to create a rainy day fund to “for any shortfalls [resulting from the] elimination of our income tax.”
His office did not respond to a request for comment.
Regardless, a compromise will happen, Linville said. He expects to see a bill, or multiple bills, soon that would establish both the fund and “guardrails” for spending it.
“Those conversations are ongoing,” he added.