Loan insurance approved for rural broadband award winners
Lawmaker asks questions about Frontier
Trending
CHARLESTON -- The West Virginia Economic Development Authority voted Tuesday to award the first loan insurance requests for four state internet providers who received winning bids in last Fall's rural broadband auction, while a lawmaker continues to ask about one company's ability to deliver.
The EDA approved loan insurance requests for Bridgeport-based Citynet for a loan up to $16 million from MVB Bank; Preston County-based Digital Connections/PRODIGI for a loan up to $2.6 million from Clear Mountain Bank; Bluefield, Va.-based GigaBeam for a loan up to $8.4 million from Citizens Bank of West Virginia; and a transfer of a loan up to $3 million for Buckhannon-based Micrologic from Citizens Bank of Weston to Citizens Bank of West Virginia.
The loan insurance requests are for 100 percent of a 10-year letter of credit. Approval is pending a Board of Treasury Investments liquidity calculation and staff-recommended conditions.
West Virginia was able to pull down more than $362 million through the Federal Communication Commission's Rural Digital Opportunity Fund Phase I Auction. The auction allocated $9.2 billion over a 10-year period to subsidize construction of high-speed gigabit internet in unserved rural areas across the U.S.
Nine companies, including Citynet, Digital Connections, GigaBeam, and Micrologic, were awarded winning bids by the FCC to expand broadband internet to 119,267 unserved Census tracts in West Virginia.
Other awardees were Space Exploration Technologies Corp., Altice USA (Suddenlink), Commnet Wireless, Shenandoah Cable Television, and Frontier Communications.
Last year, Gov. Jim Justice signed an executive order removing regulatory caps on the EDA's Broadband Loan Insurance Program. As part of the executive order, Justice also ordered the EDA to limit the application approval from the Broadband Loan Insurance Program to no more than is necessary for the first year of the program.
"This is good stuff for the State of West Virginia. It's going to help us build out broadband," said Michael Graney, executive director of the West Virginia Development Office and chairman of the EDA. "We want to continue to utilize all these federal dollars that we can, but we've got to use some state dollars as well."
Justice used his state of emergency powers when signing the executive order last September. The West Virginia Legislature plans to adopt legislation this year to permanently remove the loan insurance regulatory caps, as well as provide additional funding for broadband expansion and remove additional regulatory hurdles. The 2021 legislative session begins Wednesday, Feb. 10
"I can assure you that broadband will be a topic that's spoken of frequently during the next 75 days and I'm hopeful we can advance broadband on a much more rapid pace than we have in the past," Graney said. "This is foundational and very important."
One of the committees working on broadband expansion is the House of Delegates Technology and Infrastructure Committee and its chairman, Del. Daniel Linville, R-Cabell. Last week, Linville wrote a letter to Frontier CEO Bernie Hahn seeking additional details on Frontier's ability to meet its obligations in the RDOF auction, its agreement with the Public Services Commission, and its post-bankruptcy broadband expansion plans.
"As we craft policy related to regulation and state-level financial support, it is our responsibility as policymakers to assemble the facts surrounding how past programs haven't been able to bridge the digital divide," Linville said. "We have a mandate from the people of the state of West Virginia to get the job done. To do that, we must learn from past efforts driven by the federal government and craft policy that learns from the successes and failures of the past."
Frontier was the largest recipient of RDOF dollars in the West Virginia at $247.6 million. In a PSC order issued Jan. 15, Frontier agreed to spend $200 million -- or a minimum of $50 million annually -- on capital improvements by 2023 and deploy fiber high-speed internet to at least 150,000 locations in the state by the end of 2027. Frontier had accepted FCC Connect America Fund dollars in 2015 to expand broadband to 89,190 locations in West Virginia by the end of 2020.
"Given the substantial federal funding that Frontier has received, the information I've requested is crucial to our efforts," Linville said. "The House Committee on Technology and Infrastructure, and I as its Chairman will not relent until we've connected West Virginia with the internet infrastructure we need to thrive in the 21st century."
A spokesperson for Frontier said he was working to find out if they had received the Linville letter and had no comment.