ISP Challenges West Virginia's Use of Broadband Stimulus Funds

Jim Martin, president of West Virginia broadband provider Citynet, alleges that a $126 million broadband stimulus award from the federal government isn't being spent as the federal grant intended. Martin said the grant money should be used to build a "middle-mile" broadband network that Citynet and other telecommunications' companies could tap into. Instead, the state is giving $40 million to Frontier Communications, a Citynet competitor, to construct a "last-mile" network that benefits only Frontier, Martin said. The network would run to libraries, schools, health-care facilities, and fire and police departments, which, in turn, would pay Frontier for broadband service. "Frontier is going to have the state's business forever," Martin said. "No other company will have the money to come in and build the network."

Bridgeport-based Citynet applied for $34 million in stimulus funds to build a "middle-mile" network, but it's application was rejected. Martin has said his complaint isn't "sour grapes."