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W.Va. May Have to Repay $2.5M in Broadband Funds

December 2, 2013
The Intelligencer / Wheeling News-Register

CHARLESTON (AP) - West Virginia could lose more than $2.5 million in federal funding that it received to expand high-speed Internet service statewide.

The money is leftover from a $126.3 million stimulus grant awarded to the state in 2010. Any excess funds that aren't spent by Dec. 31 must be returned to the federal government.

The state wants to award the funding to Citynet to help pay for a broadband project. Bridgeport-based Citynet proposes establishing nine facilities to give West Virginia direct connections to the national Internet "backbone" in Pittsburgh, Pa., and Columbus, Ohio.

But the National Telecommunications and Information Administration declined last month to approve the project. In a letter to the state, the agency cited several problems, including the state's failure to provide information about its plans to return about 100 unused high-capacity routers that it bought from Cisco Systems in 2010.

Citynet proposes to use a $1.9 million credit from Cisco to buy equipment for its project.

The federal agency also cited a lack of letters of support explaining how the Citynet project would benefit specific communities. Other concerns include an $880,000 shortfall in the project budget and Citynet's ability to complete the work by the end of the year.

The agency said the project cannot be evaluated without the requested information, and "any unobligated grant funds will be returned to the U.S. Treasury."

State officials and Citynet are working to provide the information sought by the agency.

"I can't speak for NTIA, but they have not denied the project yet," Gale Given, chief technology officer for state government, told the newspaper in an e-mail.

Citynet would cover any budget shortfalls, Citynet CEO Jim Martin told the state in November letter. Martin also disputed the federal agency's assertions that Citynet could not complete the project by Dec. 31.

"The state should not be penalized and required to send back residual funds because of timing concerns that are just now being presented, especially since much of the delay over the past month was caused by the federal shutdown," Martin wrote.

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