$2.5M in West Virginia broadband stimulus funds headed back to feds

West Virginia will have to return to the federal government about $2.5 million in stimulus funds left over from a statewide broadband expansion project plagued by allegations of mismanagement and reckless spending.

"West Virginia must now reconcile its costs and return unused funds to the U.S. Treasury as required by law," said a spokeswoman for the National Telecommunications and Information Administration, the agency overseeing the stimulus funds. West Virginia had until Dec 31, 2013 to use the remaining funds, and state officials failed to "formally request" that the feds extend the deadline, according to a Jan 16 letter from the NTIA. Citynet, a Bridgeport-based Internet provider, had hoped to use the $2.5 million -- along with $7.2 million of its own money -- to set up nine "GigaPop" facilities in West Virginia that would funnel data and connect to the national Internet "backbone" in Columbus and Pittsburgh. The excess funds for the Citynet project would have come from a $126.3 million grant that the state received in 2010 to expand high-speed Internet statewide.