West Virginia nixes fiber optics RFP

West Virginia has backed off accepting bids to place fiber-optic cable along state-owned rights of way after Verizon Communications challenged the state's request for proposals in federal court.

On Dec. 19, Gov. Cecil Underwood ordered the state Department of Administration to cancel the RFP for the project, a day after Verizon sought a temporary restraining order to stop bids from being opened Dec. 20.

The state wants to lay fiber-optic cable along expressways and other state-owned property to improve economic development in remote areas and save money on long-distance charges. The savings could be used to enhance the telecommunications network for state and local government.

A high-speed connection between agencies in Morgantown and Charleston, for instance, costs $45,000 per month and is running at near full capacity, said Mark Lowdermilk, executive assistant to the chief technology officer.

Verizon objects to West Virginia's plan to give telecommunications providers exclusive access to the rights of way along the state's highways in exchange for free fiber-optic services. The complaint filed in U.S. District Court specifically says that the provision granting exclusive maintenance rights for up to 40 years violates the federal Telecommunications Act of 1996.

"Such an exclusive arrangement would stab at the very heart of Congress' intention to replace state-sponsored monopolies with full and fair competition," the complaint states.

The company also contends that state officials do not have authority to grant exclusive franchises and that the winning bidder could gain a competitive advantage if not required to operate under the same regulatory framework that constrains Verizon.

The lawsuit, which was withdrawn following Underwood's action, says that if Verizon won the contract, it would open itself to antitrust suits.

Lowdermilk defended the state's actions. "What we did in this RFP is not unlike what several other states already have done," Lowdermilk said, citing Maryland, Florida, South Carolina, Minnesota and Virginia.

However, Connie McDonnell, Maryland's director of telecommunications, said the state is using multiple vendors to install its fiber-optic backbone.

Resolution of the matter will fall to the administration of Democratic Governor-elect Bob Wise. That would have been the case anyway, Lowdermilk said, because the government made public its intention to delay unsealing the bids for 90 days.

Wise's staff could not be reached for comment.