This is a blog post discussing recent efforts by some members of our group to remove restrictions on community broadband in VA.
Virginia is currently not for lovers of public broadband. Over the years, the lobbyists for the big telecoms have done everything they can to ensure that local governments in VA cannot pursue a “public option” for the internet (or any telecommunication service) – regardless of whether those telecoms have made investments in the communities considering it.
The Saga of Optinet…
A case study in the corporate telecoms’ unyielding drive to block any attempt at public provision of telecommunication services is Bristol, VA, whose publicly owned utility BVU sought to become an internet service provider as early as 2000. After winning a battle in the federal courts and overcoming multiple costly lawsuits from the local telecoms who held a monopoly over phone (Sprint) and cable television (Charter) services, Bristol became the first public utility in the nation to build a city-wide Fiber-To-The-Home (FTTH) network offering telephone, cable television, and broadband access to the Internet. You can read all the details in this report by the Muninetworks team at the Institute for Local Self-Reliance. Sadly it was not to last. Despite the tremendous success of OptiNet, anti-public broadband regulations pushed by the corporate telecoms (in combination with a corruption scandal among BVU’s top management) led BVU to decide to sell Optinet off to a private company. The big telecoms’ reps now cite Optinet’s “failure” as reason for preventing future experiments in public broadband here in VA. Indeed, Del. Kathy Byron cited BVU as a reason for putting forth a bill to essentially ban public broadband in any form. Meanwhile, the corporate telecoms themselves continue to give us lots of reasons to seek alternatives to their de facto monopoly.
VA restrictions on public broadband…
According to a recent study commissioned by the Northam administration, there are around 660,000 homes and businesses in VA that lack connection to fixed terrestrial broadband at speeds of 25 Mbps/3 Mbps because it is simply unprofitable for many companies to build out their infrastructure to areas where population density is too low to recoup investments. In addition to that, there are potentially far more Virginians who do have access to fixed terrestrial broadband at speeds considerably higher than the FCC standard, but cannot afford a subscription. Here in broadband-rich Arlington, for instance, the county estimates that roughly 10 percent of households have no internet subscription, with 72 percent of those households earning considerably less than the area median income. One would think that if the problem is essentially market failure, the solution would be government intervention – we certainly have historical experience with this. Curiously enough, the Northam report does note the existence of public broadband entities in VA (pp. 12-14), but has nothing to say about their accomplishments and seems to dismiss them as a potential model to build on due to existing legislation that restricts them (treating this almost like a divinely ordered state of affairs that we mere mortals are powerless to change). While the report does have lots of good things to say about electric cooperatives providing internet service, the authors seem resigned to a strategy of subsidizing private, for-profit entities (like Dominion Energy) to expand the infrastructure and having private, for-profit telecoms provide the service.
While the Code of Virginia does not outright ban localities from creating public entities that provide retail internet service to residents and businesses in VA, the existing restrictions (one of which arbitrarily prohibits municipal networks from charging less than incumbent competitors for any equivalent service) make it simply impossible for municipal providers to be competitive or even get off the ground. One work-around that exists is for localities to form a “wireless service authority“, which allows localities to form a paragovernmental entity that can offer internet and telephone service. Several cities and counties have done this to great success (e.g. the Roanoke Valley Broadband Authority and the Eastern Shore of Virginia Broadband Authority).
But this is a needlessly cumbersome (and still restrictive) option. Counties and cities should have the unlimited right to build, own, and operate their own networks to meet public need and be able to offer the same range of services. As the COVID-19 crisis is currently demonstrating, having internet access can be a life or death issue. If the corporate telecoms are leaving scores of people and whole areas behind, the community – through local government – should have the unencumbered right to intervene.
Goliath cries “foul”….
So what is the logic behind these restrictions? The corporate telecoms’ arguments for these restrictions on public broadband boil down to “unfair competition” and need for a “level playing field“; i.e. a government-owned telecom would have all kinds of built-in advantages and could potentially act as both regulator and competitor (for a list of these arguments and counterarguments to them, see this article). No matter how they try to spin it, though, the fact remains that it is the corporate telecoms who are monopolistic behemoths attempting to bend the machinery and resources of government to expand and entrench their own existing advantages.
There is a very simple reason for why untold numbers of people remain unconnected either because of the cost of a subscription or the absence of fixed broadband infrastructure in their area: because that’s what’s profitable for investor-owned telecoms that are driven by the philosophy of shareholder primacy. Community broadband (municipal, cooperative, open-access), on the other hand, operates on a not-for-profit basis that prioritizes the public good and subscribers – not returns for absentee shareholders with no stake in that community. Real existing community broadband entities have real solutions for the digital divide, respect net neutrality, and do not harvest their subscribers’ browsing data for sale to third parties (nor do they use your subscription money to lobby Congress for the ability to do such things). Despite a few actual failures of public broadband attempts, the success stories are numerous, and, on average, they perform better than the corporate telecoms, while providing service for less. Thus these latter day community broadband Davids appear to be wholly capable of defeating the Goliaths of the telecom industry when there really is something resembling a fair playing field, which is why the latter is seeking to tie the former’s hands behind their backs.
The Arlington Mills fiasco…
The consequences that state-level restrictions have had here in Arlington were on full display last year when the county sought to leverage its dark fiber network (Connect Arlington) to provide free building-wide WiFi to an affordable housing project on Columbia Pike through a public-private partnership (PPP). While the county has the authority to connect and provide service to county-owned buildings through its dark fiber network, state law prohibits it from connecting to or servicing privately owned ones. Therefore, if the county wants to use the Connect Arlington network to bring internet service to an affordable housing project, it must find a third party who will build out the “last mile” and then lease strands from the dark fiber network to provide service to that site (as an aside, ArlFiber’s goal is to participate in a PPP with the county to provide an affordable high-speed connection to low-income residents and small businesses in south Arlington).
Last year, the county attempted such a project at Arlington Mills Residences (owned and serviced by APAH), and it didn’t go so well. Doubtless, some of the difficulties were self-inflicted. The terms of the county’s standard agreement for leasing the fiber are far too onerous and create an uncertain operating environment for any private entity that might opt to use them (a problem that was identified long ago by the county’s own broadband advisory committee). This led the small ISP selected for the project to walk away, which left the county and APAH scrambling for a solution. Ultimately, the Department of Information Technology opted to act as a bridge of sorts between APAH and a bulk internet provider – an arrangement that comes perilously close to crashing on the shoals of VA’s anti-public broadband restrictions. The implementation of this workaround has reportedly been far from smooth. There is no institutional steward for the APAH network, so troubleshooting connection problems is difficult to impossible, and there is but a single staff member in charge of making everything work. Wouldn’t it be easier if Connect Arlington could act directly as the ISP?
Well some of us thought it would be! After the Democrats took back the VA General Assembly last fall, some members of the ArlFiber collective decided to send around a briefing paper to members of the Arlington Delegation to Richmond to inform them of these restrictions and ask them to put in a bill to remove them in the 2020 session. While the reps who replied were supportive, only Mark Levine answered the call to put forth a bill: HB 1052.
To be sure, the bill is ambitious. It would remove all barriers to municipal broadband and would even allow such public telecoms to provide phone and cable television services as well (while also removing restrictions on cross-subsidies and the need to hold a referendum). Naturally, it was anathema to the corporate telecoms, and their ferocious reaction to a different, more modest bill served as a cautionary tale for Del. Levine and his aides.
HB 1242 and the lobbyist onslaught…
Coinciding with Del. Levine’s telecom reform bill in the 2020 session was a narrower one from Del. Steve Heretick: HB 1242, which, according to its own summary, would allow government entities to “offer telecommunications, Internet access, broadband, information, and data transmission services.” We first became aware of this bill when one of our members was asked about it during an interview with a reporter from Communications Daily. Intrigued by this development, that same member popped into Del. Heretick’s Richmond office during a citizen lobbying mission for another group, whereupon she was able to make some inquiries about the origins and intention of the bill. What we learned was that the city of Portsmouth was looking for more authority to expand its existing public network for a specific project and had lobbied its reps in the House and the Senate to put forth a bill that would grant it that authority. Del. Heretick’s aide informed her that they had arranged a meeting between the constituents asking for the bill and representatives from the telecommunications industry. Amazingly, we were invited to attend.
On the day of the meeting, we arrived to the appointed place on time, but encountered a long and slow-moving line to enter the building (occasioned by the armed protest by gun rights supporters the day before). We were about 15-20 minutes late by the time we made it into room and were initially confused as to who was who among the numerous individuals seated at the table. Rather quickly, however, we discerned that there were about three principals from Portsmouth (a city council member, an attorney for the city, and their chief information officer) and about a dozen lobbyists from just about every corporate telecom that you can think of. Del. Heretick was sitting in the middle acting as moderator, with Levine’s chief of staff sitting across from him and observing.
It was a brutal sight to behold. The Portsmouth people plead their case, explaining that they sought a change in the law so that the city’s existing municipal network could provide free building-wide WiFi for a few public housing projects that currently have no service. The murder of lobbyists assembled at the other side of the table took turns excoriating the idea as fiscally dangerous and demanded to know why Portsmouth had not tried to work with an incumbent telecom to provide the services. The Portsmouth Chief Information Officer, Daniel Jones, explained patiently (and with a level of aplomb that I could not have mustered in response to all of this…) that they had reached out to the main local (monopolist) telecom Cox to try to work out a deal, but the latter rebuffed them. Jones repeatedly emphasized that the city had no intention of competing with the incumbents, but simply wanted to provide connection in places that were uneconomical for the telecoms. Once a sort of silent impasse took hold, the head of the corporate telecom association for Virginia (Ray LaMura) launched into a dramatic monologue about the dangers that public broadband poses to tax payers, citing the example of BVU’s Optinet, while claiming that even the seemingly successful munis like Chattanooga’s EPB are rickety ships kept afloat thanks to millions of federal tax payer dollars (unlike the billions that the corporate telecoms have received to do pretty much nothing at all). Once LaMura wrapped up his lengthy philippic, Del. Heretick announced he had places to be and essentially told the two parties to talk among themselves and come up with a solution. After he exited, LaMura informed the Portsmouth team that the lobbyists would huddle and try to find an amicable solution to the problem and get back to them later. Once the lobbyists departed, we approached the Portsmouth reps to exchange notes and contact information. A few days after that meeting, Del. Heretick’s aides told us the bill was dead. It’s unclear whether a “solution” was actually found.
The struggle continues…
In light of that onslaught (and probably because it was hardly his main priority during this session), Del. Levine decided to continue HB 1052 to the 2021 session and request a formal study of the issue. It seems the only way forward is to try to build a statewide coalition of influential stakeholders who are tired of the broadband status quo in Virginia so that we can finally break the telecoms’ stranglehold over the General Assembly. The fact that we were able to even get a delegate to put forward a bill this ambitious gives us hope for the future.
If you’d like to be part of that coalition, email us.