Virginia is facing a broadband crisis. Millions of residents lack access to reliable and affordable internet service, especially in rural areas. This digital divide has severe consequences for education, health care, and the economic development of these communities.
This isn’t a new problem; ensuring widespread access to the internet has been a challenge for a long time now. But the General Assembly has created several grant programs, to the tune of hundreds of millions of dollars, to help bring broadband to these communities.
However, some internet service providers (ISPs) have exploited this program by underbidding projects and are now trying to renege on their agreement and shift the blame to electric cooperatives for their failure to deliver.
The bill these ISPs are championing would subject cooperatives to unnecessary, overly broad federal regulations and require ratepayers to subsidize further the costs already paid for broadband installation.
This bill is bad for Virginia, and here’s why.
It doesn’t solve problems. It creates them
The bill claims to address the backlog of make-ready work for the electric co-ops. Make-ready work is the process of preparing a utility pole for a new attachment, such as moving or replacing wires, equipment, or the pole itself. However, the bill doesn’t do anything to speed up or fund this process.
Instead, it draws cooperatives into federal regulations that are designed for large multistate companies, not for local, member-owned, not-for-profit entities.
It also doesn’t create any new funding for pole replacement, which is often the most expensive and time-consuming part of make-ready work. In fact, the bill would shift the costs of pole replacement from the deep-pocketed ISPs, which are unregulated and for-profit, to the cooperatives, which are regulated by the State Corporation Commission (SCC) and not-for-profit.
This means that the electric ratepayers, who are also the cooperative members, would have to bear the burden of subsidizing the ISPs’ broadband expansion, who’ve already received millions of dollars to complete.
Further, not only would it impose unfair and unplanned expenses on the cooperatives, but it would also delay the projects for months or even years.
Unlike ISPs, cooperatives must go through a lengthy and complex process to secure funding. Requiring approval of specific engineering plans and lending arrangements can take up to a year to be approved by the federal government.
By passing this bill, the legislature would effectively halt broadband deployment on cooperative lines and cause the broadband projects under VATI to fail.
To put it simply, it’s bad public policy, and it is unfair to the ratepayers. They shouldn’t have to pay higher electric bills to bail out ISPs.
These regulations are not meant for co-ops
The bill would subject cooperatives to federal regulation by the Federal Communications Commission (FCC) for make-ready process and timeline. However, the FCC regulations specifically carve out co-ops from their definition of a pole owner.
This is because co-ops are different from other utilities. They are democratically governed by their members, who have a voice and a vote in the co-op’s decisions. Being not-for-profit, they are also committed to serving the needs and interests of their communities, not to maximizing profits for shareholders or investors.
The bill would also allow ISPs to attach to utility poles without prior permission, which could pose safety and reliability risks for the electric system and the public. Co-ops have strict standards and procedures for pole attachments to ensure that they comply with the National Electric Safety Code and other regulations, and the bill would undermine the co-ops’ ability to manage and maintain their poles.
How do we fix the problem?
Co-ops are not the enemy of broadband expansion; they are part of the solution, and without their vital work, many of our rural communities wouldn’t have access to electricity or broadband.
By rejecting the bill and instead adopting the budget amendment proposed by Delegate Krizek and Senator Boysko, the General Assembly can secure a solution that ensures cooperatives can continue to partner with private sector ISPs and local governments to deliver high-speed internet to underserved areas.
Their amendment would restore funding for the Virginia Telecommunications Initiative and allocate it for make-ready costs, including pole replacements that the ISPs have requested.The reallocation of funds would only be awarded to the local governments that have already received VATI funding with a private ISP as the co-awardee.
This is a sensible and fair solution that would benefit all and bring us closer to universal broadband access in Virginia.