CHARLESTON — Vips Alpizar owns Willow Bend Bed and Breakfast in Monroe County where high-speed Internet, the kind in demand by many of her guests, is confined to a small area, mostly around Union, the county seat.
Alpizar, who has been in business for six years, has Internet service with a usage cap through a satellite provider. Even in her slow winter season, she’s already used her limit this month and has ponied up another $16.
She’s 5 miles from Union and 2-1/2 miles from where Frontier Communications Internet service stops.
“I would like to have broadband expanded,” Alpizar said. “I have to limit guests. They can’t do any live-streaming at all, no music, they can’t Skype. That’s a real issue.”
It’s not only an issue for guests. Alpizar’s daughter wants to work on an online master’s degree, and her two grandsons are on the verge of needing reliable Internet for homework.
“There’s just no way we can do that,” Alpizar said. For now, if the family does need high-speed Internet, they use the Monroe County Public Library, an option for many rural residents. “It limits the ability for them to do what they need to be able to do,” she said.
Her neighbors just down the road, Gibbs and Cheryl Kinderman, are in a similar situation. They don’t run a business, but their satellite Internet is slow and their usage limit of 25 Gigs curbs what they can do online.
“We don’t use it for watching movies or sporting events or anything but the two-minute (television) news stories,” Gibbs said. “We use it for browsing, for email, for social media, and that’s about it.”
He’s a big supporter of a bill that would build a government-owned fiber-optic “middle mile,” sponsored by Sen. Chris Walters, R-Putnam.
Walters likens the bill’s effect to building an interstate highway, with off-ramps available for sale or rent by private companies that want to build the “last mile” to homes and businesses. It would help get high-speed Internet into areas like rural Monroe County where Alpizar and the Kindermans live, and, Walters says, it will help West Virginia move up the scale on attracting companies to locate in areas where quality of life is good, but Internet is currently not.
Walters said West Virginia “ranks horribly compared to other states” in the U.S.
“It’s really holding us back,” he said.
“It would be impossible to run a business here, basically, if you need to be moving data or use a lot of bandwidth,” Kinderman said.
In a budget year so tight that Gov. Earl Ray Tomblin has proposed raising taxes on tobacco products and telecommunications data because of a $354 million shortfall, the estimated cost of a government-owned fiber-optic network at $78 million — that’s about $35,000 a mile by Walters’ highest estimate — seems less than passable.
But Walters is optimistic that the network could be paid for with a bond, which depends on whether the network is proven to be financially capable of sustaining itself. No money would come from the state’s general revenue fund. “Zero dollars,” Walters is fond of saying. He’s also got his eye on grants that would help grow other technology benefits to rural areas.
“There are hundreds of millions of dollars in grants alone, just for the expansion of telemedicine. There are hundreds of millions of dollars to close the homework gap,” Walters said.
Homework gaps are nearly the equivalent of having math problems assigned in a textbook, but not having a textbook to take home. If students can’t access the Internet, they can’t finish their homework.
“Sustain” might be difficult, though, unless Frontier decides to become a customer of the state.
That’s “unlikely,” according to Kathy Cosco, Frontier’s manager of governmental affairs. Cosco said her company has its own copper network and doesn’t need to use another “middle mile,” although it does purchase fiber from other private companies in certain areas of the state.
She said that state government should focus instead on the “last mile,” the one that goes directly into homes and businesses. Walters’ bill would allow Internet providers to buy or rent from the middle mile, and then build “off ramps” for last mile construction.
“It’s the last mile that costs us the most when you factor in you might only get to 10 homes and only four or five of them might sign up,” she continued. “It’s very difficult to make the case (to build) $900,000 worth of fiber.”
Walters won’t argue that the last mile is important, but he will take on Frontier’s near monopoly.
“Only one company can build off-ramps in communities right now, and that’s Frontier because they have 44,000 miles of copper,” Walters said. “This would give (other) companies the ability to build off-ramps into people’s homes. Where there’s more competition, there’s more reliability, there’s faster speeds.
“It creates a competition in a market where it doesn’t exist.”
Cosco said Frontier is trying to get to rural areas and has participated in the FCC’s Connect America Fund, a move that allowed 2,700 households and businesses to be connected since late last year. Part of the plan is placing new equipment closer to people’s homes, she said. “That’s the approach we’re taking. We’re taking advantage of new technology to get people faster speeds over that new copper.
“We want to try to get to these customers, but it is expensive and we can only do it a little bit at a time,” she said.
According to smallbiztrends.com, copper offers advantages for rural areas. For one thing, it already exists, bringing landline telephone service to homes, and it’s less expensive, smallbiztrends said.
“Still fiber optic cable offers many advantages over copper,” it said.
Fiber is faster, providing a “huge inherent speed difference,” and it’s also more reliable, resulting in less signal loss over long distances, smallbiztrends said.
Walters’ bill might have other opposition, though. He is a Republican in a time when GOP lawmakers are calling for the government to be involved less in people’s lives and in the so-called “free market.”
“This is infrastructure; the government has always been involved in infrastructure, whether subsidizing (projects) or overseeing price,” Walters said. “The question is, ‘Do you look at broadband as infrastructure or don’t you?’ “
He also notes that utility companies — power and communications — have long been subsidized so their services could reach people in rural areas.
“It’s something we have subsidized for years and instead of subsidizing one company to try to get out to everyone, this is doing a subsidy for all the companies to get out and compete,” he said.
It’s a sticking point for Senate Majority Leader Mitch Carmichael, R-Jackson. Carmichael said there is a “philosophical discussion” about how broadband Internet service is provided to customers.
“I’m more aligned with ensuring that the private sector has the tools necessary to do it,” Carmichael said. “I think they deliver services much better than a government entity, but that’s for the body to decide.” He said the Internet, broadband and technology has expanded “exponentially faster than it would have had government been a part of that mix.”
He does concede that over time other infrastructure providers have had government subsidies, specifically roads and telephone and electric services.
“It might be time for government to provide more oversight and competition to the private sector, but that’s something we’ll try to flesh out as we go through this process,” he said.
Carmichael is also a Frontier employee, managing operations and sales in northern West Virginia. He said his company does not put any pressure on him to vote on bills one way or the other and, as he has in the past, he will ask to be recused from voting on bills that deal with broadband expansion.
Walters’ bill is not the only legislation that deals with providing Internet service and, instead of “zero dollars,” would cost the state up to $1 million in tax credits. Frontier backs the bill that would give shared tax credits to Internet providers who provide last mile service to “certain extremely high-cost census blocks.” Those tax credits have some built-in flexibility, meaning they could “carry over” and “carry back,” meaning they could be used against the previous year’s taxes, the current year’s taxes or the next year’s taxes. The tax credit amounts to $500 per household that is “lit up” with Internet service.
The bill was introduced in Walters’ Committee on Transportation Friday.
Walters says both bills can pass and, in fact, “work very, very well together.”
Carmichael agreed that both bills have merit and life.
“They’re not mutually exclusive, so if we do one, it doesn’t mean we won’t do the other,” he said.
Walters said without broadband expansion, the state will be left behind in multiple sectors of business, and not just technology.
“There’s so much from commerce to medicine to education that’s all tied to this,” he said. “If we don’t have it in West Virginia, if we don’t have a robust system, we’re holding our population back.”
Walters’ bill, SB 315, has 21 co-sponsors on both sides of the aisle, including Minority Leader Jeff Kessler, D-Marshall. The bill is now in the hands of the Committee on Government Organization.
SB 16 has some of the same sponsors, but only seven. It was sent to the Committee on Finance by a unanimous Transportation Committee vote.
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