Responsibly Expanding Broadband in Virginia

By Ray LaMura

Before the New Year, I read with great interest a Susan Sili article that praises some local governments’ efforts to independently expand broadband, while denouncing legislation designed to make it more transparent for taxpayers and prioritizes Virginians who don’t have access to broadband.

­­We all agree wired broadband has become an important tool for residents and businesses everywhere. Virginia’s private sector has built a strong state of the art broadband network. According to Virginia’s independent Center for Innovative Technology’s (CIT), the private sector has invested more than $1 billion over the last five years to expand broadband in the Commonwealth. Despite this level of investment, we recognize that more needs to be done to expand broadband to unserved areas in Virginia which is the very goal of the Virginia Broadband Deployment Act.

Some are of the opinion that government-owned and run broadband networks (GONs) are the solution, and that this legislation is designed to kill that effort. The words in the legislation matter. The truth is that the Virginia Broadband Deployment Act ensures that when local communities spend taxpayer dollars to create a broadband network, unserved areas are the priority. Here are the facts:

The designing and construction of a broadband network is an expensive and risky investment. Customer demands and technology are continuously changing and costs constantly rising. Unfortunately, under the GON model, that risk is carried totally by local taxpayers.

For example, Bristol Virginia Utility (BVU), once touted as the posterchild of GONs, built a $130 million taxpayer funded network on top of existing private providers while not prioritizing service to unserved areas. This past October the Virginia State Auditor of Public Accounts noted the complexities of local governments using taxpayer resources to engage in commerce. BVU is today selling its network for $50 million. An $80 million loss for taxpayers!

Many GONs, as BVU did, hide behind a Freedom of Information Act exemption when they operate these broadband networks. This leaves taxpayers like those in Roanoke, Virginia in the dark and stuck funding an estimated $9.6 million duplicative network while residents remain unserved and without access to new broadband services. Does that really achieve what Sili is calling for?

The VCTA believes that the General Assembly should debate and establish a state policy to determine if local governments should be risking public dollars to build duplicative networks competing with the private sector that it also regulates, taxes and serves as the gatekeeper to the rights of way used to deploy broadband. We say no, and here’s why.

There are still Virginians, mostly in rural areas, without broadband service. As such, taxpayer funds should be prioritized for getting these residents broadband service, not building more broadband to people and businesses that already have it.

The Virginia Broadband Deployment Act sets forth a clear path for allowing local governments to build networks to unserved areas while ensuring the proper oversight and transparency by using many of the recommendations from the State Auditor’s report of BVU.

However, the VCTA believes in the sensible approach of public-private partnerships, which allow for greater expansion opportunities, access to private resources and shared risks for taxpayers. Sili failed to mention that the King and Queen County project she praised is actually a public-private partnership where, “the county purchases the upstream bandwidth and all equipment, while the private partner designs, maintains and operates the network and provides the customer service.”

This is a perfect example of how public-private partnerships are a win-win scenario for all parties, including the citizens and businesses in King and Queen County. Industry assumes some of the risk and brings technical expertise and experience in maintaining and upgrading a network; while local communities bring alternative financing solutions.

Cases like this tell us that there is a role for local government to play in helping connect unserved areas, but there are too many case studies of failed “go it alone” GONs from across the nation to let local governments risk taxpayer funds in the name of “economic development.”

Ray LaMura is President of the Virginia Cable Telecommunications Association (VCTA)

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