Frontier sued for alleged misuse of $40.5M in federal broadband stimulus funds

Frontier's woes in West Virginia have come to a new head as competitive provider Citynet is suing the telco over abusing $40.5 million in federal stimulus funds to build a broadband network that would lock out competitors in the state.

In the lawsuit, Citynet accuses Frontier of double-billing, claiming that it falsified records and charged excess fees not authorized by the federal grant that funded the telco's broadband expansion project it completed in 2014.

West Virginia Homeland Security Chief Jimmy Gianato, Chief Technology Officer Gale Given and former Commerce Secretary Kelly Goes have also been named in the suit. Citynet claims these three state leaders willingly participated in a scheme to abuse government funds.

Although Citynet originally filed the lawsuit in 2014, it was not released until earlier this week. On Monday, Citynet filed an updated complaint when the U.S. Justice Department said it would not weigh in on the suit.

Neither Citynet nor Frontier, West Virginia's largest service provider, would provide a comment to the Charleston Gazette-Mail.

At issue is a $126.3 million federal stimulus broadband grant awarded to West Virginia in 2010. This grant was aimed at providing broadband internet to 1,064 public facilities -- including a mix of schools, libraries, health clinics, courthouses and state police detachments.

A large portion -- or about $40 million of the total $126.3 million amount -- was allocated to build a middle mile open access network from which any service provider could purchase wholesale bandwidth to deliver services to residential and business customers.

Citynet said in the lawsuit that Frontier built a last mile network that linked the buildings to the company's existing fiber utility poles, "essentially rendering the newly constructed facilities useless to competitors."

Another issue Citynet cited was the actual amount of fiber Frontier needed to construct the middle mile network. Over 400 of the 1,064 public facilities that were targeted to get new fiber already had a connection at their locations.

Citynet claims that Frontier "double-counted" fiber to 58 buildings in 32 counties, and "used excessive maintenance coil to make up for fiber not constructed."

Citynet is not the only entity in West Virginia that's had a beef with Frontier.

In December 2015, Frontier agreed to invest at least $150 million over the next three years to increase broadband speeds in West Virginia as part of a settlement to lawsuit filed in 2014 by the state's Attorney General Patrick Morrissey.

The telco was accused of promising broadband speeds of up to 6 Mbps but only delivering speeds of 1.5 Mbps or lower.

For more:
- Charleston Gazette-Mail has this article

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