Bills that would provide a referee in disputes centering on broadband deployment in the commonwealth cleared Virginia’s Senate and House of Delegates on Tuesday.
HB 800 and SB 713 both passed unanimously with provisions that incorporate some federal rules into the process while installing the State Corporation Commission as arbiter. The bills are crucial to addressing a federal deadline for spending about $750 million in pandemic relief funds before the end of 2026, patrons said. The federal government would “claw back” any money unspent by then, they said.
The legislation’s inspiration: disagreements between the internet service providers, or ISPs, that successfully bid to string broadband cable over utility poles and the electric utilities that own those poles. Since money began flowing from the American Rescue Plan Act of 2021, some of the parties have disagreed about two things: the time it takes for utilities to approve the work required, and who must pay to replace outdated poles or add new ones.
The Federal Communications Commission has rules and could handle disputes between ISPs and large investor-owned utilities Appalachian Power and Dominion Energy, both of which are in the deployment mix. But Virginia has no such structure in place to deal with disagreements about timetables and costs among ISPs, electric cooperatives and municipality-owned utilities working on projects that the Virginia Telecommunication Initiative, or VATI, is funding with federal, state, local and private money.
Both the House bill, which House Majority Leader Charniele Herring, D-Alexandria, sponsored, and the Senate version, from Sen. David Marsden, D-Fairfax County, would add FCC rules to an existing Virginia law governing pole attachments. According to those rules, getting fiber strung across poles should take no more than 165 days after pole inspections and engineering analyses. The bills also require “the reasonable, actual cost” of any pole rearrangement required to string up the cable.
The SCC would hear any disputes about timing or cost within 120 days. Municipal-owned utilities are part of a separate state law and were not covered in the new legislation.
Both bills saw changes that addressed concerns from Virginia’s cooperative utilities. Their representatives said the bills in their earlier forms could have had three negative effects: increased rates to customers for replacing poles, nullification of existing contracts, and danger to co-op workers due to tying additional cables onto existing ones in a method called “overlashing.”
The bills had addressed those worries by the time they emerged from committee hearings. Virginia’s 13 electric co-ops and the International Brotherhood of Electrical Workers labor union had uniformly opposed the bills, but by the time of a Feb. 6 House Labor and Commerce subcommittee hearing, they had taken a neutral stance on the House version. Representatives from both of those groups spoke during that meeting, along with broadband industry representatives who had previously worked to get both bills passed.
“I nerded out on this,” Herring said of the bill during the Feb. 6 meeting. “I really love this issue.”
The tone hadn’t been as unified the day before, as the Senate’s Commerce and Labor Committee discussed the issue. Neil Gray, of the electrical workers’ union, said that not only could overlashing cause serious injury to workers, but many of those workers live in the areas where they work, and they could see their bills increase due to the cost of new poles.
“It should be noted that many rural broadband projects have already been completed without this legislation, with internet providers negotiating directly with electric cooperatives,” Gray added.
Richmond-based Jimmy Carr, chief executive of All Points Broadband, said that he had encountered cooperatives that were asking at least twice the going rate for pole replacement, due to issues that were not the ISP’s fault. (A single pole can cost between $5,000 and $20,000, depending on the type of pole and the load it carries.)
Sen. Bill Stanley, R-Franklin County, was skeptical that it was all the utilities’ fault. Stanley, referring to the Virginia Telecommunication Initiative Project Dashboard, which details the broadband work going on in the state, noted that All Points had received $186.5 million in VATI grants for nine projects. Only two of those projects have resulted in completed broadband access, while two have been canceled due to “non-compliance,” Stanley said.
Carr confirmed that he was correct, adding that the process called “make ready,” in which poles are examined and engineered for new attachments, is the “primary issue.” He has said it would cost twice as much to run the cable underground.
“I believe they’ve bitten off more than they can chew,” Stanley said.
The Senate committee referred the bill for fine-tuning to the Finance and Appropriations Committee, which unanimously sent it to the full Senate.
With an expected $1.4 billion in federal money coming to Virginia, via the federal Broadband Equity, Access and Deployment Program, or BEAD, all sides agree that getting broadband fiber to all of the estimated 162,000 still-unserved locations could become even more complicated.
Two sets of budget amendments — including one that would add about $80 million to the Virginia Telecommunication Initiative between 2025 and 2026 — are meant to mitigate the price of new poles and other work required to get them ready for new cable attachments. The VATI-related amendments would add about $29.7 million in 2025 and about $49.7 million the following fiscal year to VATI, from the state’s general fund.
The other set of amendments, also filed in both the Senate and the House, would earmark $60 million in fiscal years 2025 and 2026 from BEAD to help pay for the work. None of that money can be earmarked to help complete VATI projects.
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