In a dispute that could affect Internet prices and service in West Virginia, Frontier Communications says it has no obligation to lease unused fiber-optic cable to its competitors if those companies use the fiber to provide high-speed Internet service to their customers.
Frontier has asked the state Public Service Commission to rule that Citynet, a Bridgeport-based Internet provider, has no right to lease unused fiber - called "dark fiber" - and use Frontier's network to expand broadband service to Citynet customers, according to a recent filing.
Frontier asserts that Federal Communication Commission regulations - including the agency's "Net Neutrality Order" issued in March - don't require companies to lease fiber to competitors.
But Citynet alleges that Frontier has misinterpreted the FCC order. Citynet argues it should be allowed to lease Frontier's extra fiber as needed - to provide any telecommunication service, whether it would be telephone or high-speed Internet.
"If the FCC and the West Virginia Public Service Commission were to adopt Frontier's desired position, the outcome would be that Frontier would no longer be required to provide dark fiber to competitive providers," said Citynet CEO Jim Martin. "The end result would be that the rural markets of West Virginia would continue to be served by Frontier as an unregulated monopoly with little or no hope of ever attracting competition for service, meaning that these areas will not ever experience the benefits associated with the free market."
But Frontier says being required to lease the fiber would discourage large companies like Frontier from investing millions of dollars to expand Internet networks only to "be forced to allow its competitors to share in the benefits of these facilities without participating in the risk inherent in such large-scale capital investment," the company told the PSC in a recent filing.
"If Citynet's interpretation of the Net Neutrality order is adopted, the fallout will be less investment in fiber-optic cable for broadband in West Virginia," said Frontier spokesman Andy Malinowski. "Citynet will have no incentive to invest in laying new fiber because it will be able to use Frontier's fiber at steeply discounted prices."
In the past five years, Frontier has invested $500 million in its fiber network in West Virginia, boosting Internet availability to about 90 percent of households across the state.
Frontier says it's crucial for the Public Service Commission to rule "without delay" that, under the FCC's March order, "competing broadband providers are not entitled to the benefits of Frontier's huge investments for broadband."
"Frontier will not be able to realize the full value of its investment for which it took all the risks," Malinowski said.
Last year, Citynet filed a complaint against Frontier with the Public Service Commission. Frontier refused to give Citynet access to unused fiber in several rural communities, including Philippi, Buckhannon and Elkins.
In July, an administrative law judge recommended that the PSC require Frontier to honor a decade-old agreement with Citynet and allow access to Frontier's fiber network in those areas.
The Public Service Commission must review and approve the judge's decision before it becomes final.
Frontier appealed last month, asking the PSC to confirm that FCC rules bar Citynet from using Frontier's extra fiber to expand Internet service to customers. Frontier also reiterated that it sets aside a third of its unused fiber for maintenance, testing and emergencies - and, therefore, didn't have extra fiber to lease to Citynet. Frontier wants the commission to reject the judge's recommended order.
Citynet has challenged Frontier's appeal, characterizing the dispute as a "simple contract issue."
Frontier and Citynet have an "interconnection agreement" that allows Citynet to lease fiber from Frontier for "telecommunication services."
Citynet initially requested the unused fiber for telephone service, but company executives later acknowledged "long-term plans" to provide broadband service with Frontier's fiber.
Citynet has urged the PSC to uphold the administrative law judge's decision.
"Since the beginning of this process, Frontier has continued to try to cloud the issue by throwing out completely unrelated arguments and historical diatribes," Martin said. "The case at the Public Service Commission is simple. Per the interconnection agreement, Frontier is contractually bound to provide dark [unused] fiber, if it is available, to competitive carriers like Citynet."
In its appeal, Frontier also took issue with the judge's recommendation that company be required to provide its fiber route maps if Citynet asks to lease additional unused fiber elsewhere in West Virginia. Frontier says the maps include "highly confidential information."
Reach Eric Eyre at ericeyre@wvgazette.com, 304-348-4869 or follow @ericeyre on Twitter.