A bill under Virginia General Assembly consideration would place the commonwealth’s 13 electric cooperatives under Federal Communications Commission regulations in order to deploy broadband statewide before federal pandemic funding expires at the end of 2026.
House Bill 800, which House Majority Leader Charnielle Herring, D-Alexandria, filed this month, has drawn negative feedback from co-op leaders. Sen. David Marsden, D-Fairfax, expected to file a similar bill this week, but a draft copy has already circulated, and the co-ops oppose it, as well.
Both bills address the time it is taking for some internet service providers, or ISPs, and co-ops to agree on details about stringing broadband fiber across utility poles in many of Virginia’s rural locations. No one disagrees on the need to get it all done before the deadline imposed under the pandemic-inspired American Rescue Plan Act of 2021, or ARPA. If all of the money isn’t spent, the act requires the federal government to take back the remainder.
The disagreements center on how to beat the deadline and at whose cost. Ever since fiscal year 2022, when Virginia leaders injected about $750 million of state and ARPA money into a broadband deployment fund, ISPs have been working with co-ops, municipal power providers and the state’s largest energy suppliers, Appalachian Power and Dominion Energy.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
Some of the fiber has gone underground, but some of it has been attached to poles. Some of the poles were out of date and needed replacement, which is the utilities’ responsibility. Others were fine, but couldn’t handle the additional load, and replacing them is the ISPs’ responsibility. Yet the parties have had enough disagreements about who should pay and how long it has taken that the lawmakers got involved.
Several co-op executives say that the bill, as written, could force them to increase rates to their customers. Even the Virginia Poverty Law Center is concerned. Replacing utility poles that are unfit for broadband attachments — or adding new ones where needed — could raise electric bills for the rural population, said Albert Pollard, a contract lobbyist with the VPLC.
“We’re concerned about the rate pay or impact for those who have the least,” said Pollard, a former Virginia delegate who represented the Northern Neck. “We’re still digging through it but it’s our fear that there would be unintended consequences.”
State leaders in the 2022 fiscal year directed $750 million to the Virginia Telecommunications Initiative, also called VATI. The money — which with local and private business matches adds up to more than $1 billion — was meant to deploy broadband statewide. Marsden, the senator from Fairfax, has said that some VATI money can pay some of the pole costs. A single pole can cost between $5,000 and $20,000, depending on its use.
Co-op leaders say they operate on significantly smaller budgets than investor-owned, multistate operations such as Appalachian and Dominion — which are already covered by FCC rules — and can’t afford too many pole replacements without raising rates for some of their 1.5 million customers.
It is apparently an open question, said Rich Schollmann, executive director of the Virginia Broadband Industry Association, which supports the bill.
“What I understand is that the legislators and their staff are looking at some ways to be able to access that funding, to be able to cover some of these costs,” Schollman said in a Wednesday phone call. “There has been some debate as to whether federal law allows certain things … like pole replacements to be included. And so that’s a question that I know that the state officials are looking very closely at.”
Business among the co-ops and telephone, cable and internet companies has fallen under the State Corporation Commission’s purview, but both Schollman, an electric utilities veteran, and an SCC spokesman said they were unaware of any timelines associated with getting broadband work done. Herring’s bill, which is in the House Labor and Commerce Committee, would put such agreements under FCC rules, which state that after the pole inspections and engineering analyses, it should take no more than 165 days before workers can string the fiber.
The bill also requires “the reasonable, actual cost” of any pole rearrangement required to string up the fiber.
The SCC would still hear any disputes about timing or cost within 120 days.
Marsden has said that only about one-third of the cooperatives are holding up deployment with cost and process disagreements. Some co-op leaders wonder why they are being pulled into this law, despite working well with the utilities in their areas and working to beat their contract deadlines.
Marsden said that he will continue working with all sides after he enters his bill. Multiple attempts to reach Herring were unsuccessful.
“There’s no good guys and bad guys,” Marsden said. “There’s just people who have interests. But my big interest is we cannot miss this opportunity to … solve our broadband problems.”