pete_c
Guru
Frontier Sued For Misuse of Federal Broadband Funds
by Karl Bode
Thursday Jul 21 2016 14:10 EDT
We've repeatedly explored just how corrupt and dysfunctional West Virginia has been when it came to spending their $126.3 million in broadband stimulus funds. The Charleston Gazette highlighting for years how Verizon, Frontier and Cisco convinced the state to buy ridiculously overpriced, overpowered and unused routers, and ridiculously overpaid, redundant consultants who haven't actually accomplished anything.
The state then buried a $118,000 study on its spending of the stimulus money that leaked anyway, highlighting that how Frontier Communications did a sloppy job in tracking spending, may have overbilled taxpayers substantially, and only built a mish mash of geographically scattered fiber upgrades that the majority of state residents wouldn't benefit from in the slightest.
Now one of Frontier's competitors in the state has filed a lawsuit alleging the company misused federal stimulus funds.
The lawsuit was technically filed back in 2014 but was kept under seal until this week. The lawsuit, filed under the False Claims Act, alleges that Frontier misused $40.5 million in federal stimulus funds that state and Frontier officials repeatedly claimed would be used to build an open access middle mile network, usable by multiple ISPs to help improve connectivity across wide swaths of West Virginia.
That didn't happen, Frontier falsely bloating its budget by misstating the amount of fiber actually deployed, the lawsuit claims. The lawsuit also names Homeland Security chief Jimmy Gianato, Chief Technology Officer Gale Given and former Commerce Secretary Kelly Goes as defendants, claiming they aided Frontier's "scheme to defraud the federal government."
The lawsuit alleges that not only did Frontier dodge its obligation to build an open access network that other companies could use (locking the state into Frontier "in perpetuity"), the company submitted more than 700 invoices for construction efforts that should never have been paid for. It also claims that Frontier used all manner of tricks to artificially inflate the amount of fiber that was actually deployed:
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." "Frontier also misrepresented the proposed distances for many of the community anchor institutions by simply inputting the same number for several projects,” the lawsuit alleges. “Incredibly, there were 36 [buildings] in seven different counties that each required the exact same 4,390 feet of new fiber.”
The lawsuit also claims that Frontier charged significantly more than originally estimated with the help of a former Verizon executive turned state Technology Officer, who helped the company obscure spurious additional charges via the help of "loadings fees." Before West Virginia received its $126.3 million stimulus grant the state ranked 48th in the nation for broadband access. After the funding the state ranked 53rd among 50 states, Guam, Puerto Rico and the District of Columbia, the suit states.
You can find a full copy of the lawsuit here (pdf).
by Karl Bode
Thursday Jul 21 2016 14:10 EDT
We've repeatedly explored just how corrupt and dysfunctional West Virginia has been when it came to spending their $126.3 million in broadband stimulus funds. The Charleston Gazette highlighting for years how Verizon, Frontier and Cisco convinced the state to buy ridiculously overpriced, overpowered and unused routers, and ridiculously overpaid, redundant consultants who haven't actually accomplished anything.
The state then buried a $118,000 study on its spending of the stimulus money that leaked anyway, highlighting that how Frontier Communications did a sloppy job in tracking spending, may have overbilled taxpayers substantially, and only built a mish mash of geographically scattered fiber upgrades that the majority of state residents wouldn't benefit from in the slightest.
Now one of Frontier's competitors in the state has filed a lawsuit alleging the company misused federal stimulus funds.
The lawsuit was technically filed back in 2014 but was kept under seal until this week. The lawsuit, filed under the False Claims Act, alleges that Frontier misused $40.5 million in federal stimulus funds that state and Frontier officials repeatedly claimed would be used to build an open access middle mile network, usable by multiple ISPs to help improve connectivity across wide swaths of West Virginia.
That didn't happen, Frontier falsely bloating its budget by misstating the amount of fiber actually deployed, the lawsuit claims. The lawsuit also names Homeland Security chief Jimmy Gianato, Chief Technology Officer Gale Given and former Commerce Secretary Kelly Goes as defendants, claiming they aided Frontier's "scheme to defraud the federal government."
The lawsuit alleges that not only did Frontier dodge its obligation to build an open access network that other companies could use (locking the state into Frontier "in perpetuity"), the company submitted more than 700 invoices for construction efforts that should never have been paid for. It also claims that Frontier used all manner of tricks to artificially inflate the amount of fiber that was actually deployed:
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." "Frontier also misrepresented the proposed distances for many of the community anchor institutions by simply inputting the same number for several projects,” the lawsuit alleges. “Incredibly, there were 36 [buildings] in seven different counties that each required the exact same 4,390 feet of new fiber.”
The lawsuit also claims that Frontier charged significantly more than originally estimated with the help of a former Verizon executive turned state Technology Officer, who helped the company obscure spurious additional charges via the help of "loadings fees." Before West Virginia received its $126.3 million stimulus grant the state ranked 48th in the nation for broadband access. After the funding the state ranked 53rd among 50 states, Guam, Puerto Rico and the District of Columbia, the suit states.
You can find a full copy of the lawsuit here (pdf).
