West Virginia nixes fiber optics RFP
- By Eric Kulisch
- Dec 21, 2000
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The lawsuit, which was withdrawn following Underwood's action, says that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
Wise's staff could not be reached for comment.