What's slowing down municipal broadband?
Two professors from Virginia Tech explain how legacy telecoms cornered the market on broadband in Virginia, and how they harmed communities and municipalities. They provide their recommendations to expand high speed internet throughout the Commonwealth.
Michael and Thomas also discuss new developments from the redistricting commission and speculate about what certain outcomes might be.
Michael Pope
Welcome to Transition Virginia, the podcast we're still calling Transition Virginia, for now. I'm Michael Pope.
Thomas Bowman
And I'm Thomas Bowman. Later in the show, we'll hear from two professors at Virginia Tech, who will explain how legacy telecoms have cornered the market on broadband, and how that harms Virginia by limiting access to municipal broadband or community broadband. But first, Michael, everybody wants to know the new name of the podcast.
Michael Pope
Let them wait. They don't need to know yet. I mean, have they seen our new look? Transition Virginia may be a thing of the past, but for now, we've got a new look. Thomas, what's up with the new profile pic and artwork?
Thomas Bowman
Well, it was time for a rebrand, and a redesign, and we're slowly rolling things out that will tease the new name of our podcast, and that way we don't hit you with all the changes all at once, we'll ease you into it. So the last thing we'll do is the new name, but it's great. It's graffiti style. And you'll notice it in the cover art.
Michael Pope
You know, maybe we should have a contest for the new name. Let's ask the listeners, what would you rename our podcast? I have to say that I was recently asked by a very prominent Virginia Politico about our new name, and I did not spill the beans, Thomas. Instead I asked this person to come up with some suggestions. So I put that same question to you, the listener, what name would you suggest? Send your voicemails to TransitionVApodcast@gmail.com. Okay, so this is the point of the show where we welcome our new Patreon. So the last time we did this, we had no new Patreons. So Thomas, what's our latest here in terms of Patreons?
Thomas Bowman
I'm very happy to report Michael that it worked.
Michael Pope
Ding ding ding!
Thomas Bowman
We have nine new Patreon this week.
Michael Pope
Did you say nine?
Thomas Bowman
Nine. Nine of them.
Michael Pope
Nine new Patreons.
Thomas Bowman
Four benefactors, five friends of the Team. so our benefactors first Giana D. Steven H. Zack S. Phil W. Thank you so much for being benefactors for Transition Virginia. And then Robert D, Sabrina K. John, Jessica B. And Brian D. Thank you so much for signing up to be friends of the Team. Michael, they like us enough to buy us one coffee a month, that is very kind of them.
Michael Pope
That is so kind of you. Thank you to all of our new patreons. Wow, they were really responding to our fun drive, weren't they?
Thomas Bowman
That's the way I like to think about it. I think it worked.
Michael Pope
It's I think the fun drive clearly was a success. Maybe we should do another one sometime soon?
Thomas Bowman
I think we should do it very soon.
Michael Pope
Okay, so later in the show, we're going to hear about how a handful of legacy telecom giants, AT&T, Verizon, Comcast, CenturyLink, Cox, we're going to hear how they've cornered the market on broadband by shutting out the possibility of competition from municipal or community broadband. And that brings us to another take on that topic from our contributor Steve Artley.
Steve Artley
This broadbands my land, this broadbands my brand from Appomattox to Chincoteague Island, to the Blue Ridge Mountains, to Atlantic waters. Broadband is paid for only me. I own the network. I own the cable. Internet freedom, it's only fable. I got the deal man, your part has been canned. Broadband is paid for only me. No corporate executives were harmed in the making of this parody.
Thomas Bowman
Oh, man, this guy is good. We got to have him on more.
Michael Pope
This guy is really good. You know, years ago, he won a big award from the Virginia Press Association. And so we went down to celebrate with him in, this was Norfolk. And so we're staying in this big hotel, for this Virginia Press Association Conference. And he's there in the lobby with a piano doing his thing. I mean, like the guy is like an entertainer. And we were there very late at night as he was singing and making jokes on the piano. And anyway, Steve Artley great guy, amazing editorial cartoonist, great musician, and button pusher. And gosh, is he pushing some buttons today.
Thomas Bowman
An old fashioned Renaissance man, I like it. Alright, Michael, we've got some news to discuss. Right?
Michael Pope
Let's get to the news. Okay, so the Virginia General Assembly recently appropriated $700 million to expand broadband in Virginia. But most of that money will go to those legacy telecom providers that Steve Artley was just talking about. The money is not going, or at least a large sum of money, is not going to help low income people. Only a very small fraction of that $700 million is going to go to help expand access for low income people, only about 3%.
Kim Bobo
I'm looking at the whole budget and just frankly, appalled at how little is really targeted to low income people.
Michael Pope
That's Kim Bobo at the Virginia Interfaith Center for Public Policy. She says there are lots of ideas lawmakers could have funded to help low income people have access to the internet.
Kim Bobo
You could make it completely free and available around every school that is really low income, you could do it at every public housing, you could make it free for two or three years, right? I mean, there are ways you could have focused additional money and waited for the federal infrastructure dollars, that would have done more to help low income people.
Michael Pope
The last part is really key, Thomas. Critics of what the General Assembly did say they could have spent the money now, this round of federal stimulus dollars, on low income people and waited for this money that's coming from Congress. So I mean, did the General Assembly and the Governor miss an opportunity here to help low income people, now, and finance, the expansion of broadband later?
Thomas Bowman
Well, Michael, I think it's a really sensitive question to say, "Who do you point the finger at for something like this," because none of the members of the legislature, including the Governor, and frankly, the people that get hired on the broadband advisory board, are necessarily experts at all of this. Right? They're more, we're gonna find out later in the show, industry experts, right? So there's certain narrative that they want to convince the legislature of, and they do so successfully, and executive branch of is, "We would be happy to do this, but we just don't have the money to. So if you give us the money, then we can fix the problem." And this has been- broadband is just the latest version of this story. What the government thinks is going to happen is if they just give a pile of money to these big businesses that I mean, you can look at their annual reports, look at their quarterly reports, and their financial filings. You can see they make money hand over fist, they've got the cash flow to do any of these things without adding to their piles of money from taxpayers.
Michael Pope
You know, Thomas, you mentioned this is kind of an old story. And this has happened before. You know, the professors that you're going to hear from later on in our show, make an interesting point about this going back 400 years, to the tobacco profiteering of the Virginia Company of London.
Thomas Bowman
Yes.
Michael Pope
And then if you look at like the railroad industry in the 1800s, they the railroad industry was able to use the power of the government to help themselves and harm their competitors. There was a horse racing track actually near where I live in Alexandria, it's in the Del Rey Neighborhood, that was owned by a state senator who created a part of Virginia law that helped himself and harmed the potential competitors of the racetrack. The energy industry has been known to use Virginia code to help themselves and harm competitors. In the case of broadband, the competition they're harming is municipal broadband and community broadband. And, you know, is that a potential fix for rural Virginia? The Governor and his people say, "The economics don't add up. The community and municipal broadband's not really a good solution for rural Virginia." They argued we haven't really seen that happen in other parts of the country. People on the other side of this issue, say yes, yes, sure we have. There's one in Utah that's very successful. And so we're at the point now, where the state government is about to make this huge investment in broadband. And it's probably going to go to these corporations and not community groups or municipal governments.
Thomas Bowman
Yeah, well, in these big companies, and it's not just broadband, but these big corporations in Virginia, have a tendency to retain as many lobbyists as they can afford, that aren't conflicted out for working for them. And all of these lobbyists, they're not just somebody that they hire to be a lobbyist. It's somebody who's well known, that has relationships with these members of the General Assembly, with the Executive Branch, that they're hanging out with already. And therefore, the only voice in their ears are the industry voice saying, like, "We've got to do this, we've got to do that. We got to give more money for big business in order for them to do the thing that they're getting paid to do already." And what you don't have in, at least Virginia's government, are lobbyists for the people or like a Vox Populi, if you will, a voice of the people, who is pushing back and saying, "No, that's not true," with an equal amount of weight. Because we have plenty of activist groups, we have plenty of Coalition's and consumer led Coalition's that do push back, but they don't have the same relationships with these members of the General Assembly, and a lot of that, frankly, is because of money. If you have to fund campaign, after campaign, after campaign, and once you're elected, it's a lot harder to raise money, it's just a fact. So you're gonna go back to these people who are only really offering you $500, $1000. Maybe, on a good day, you can pull in a $10,000 check, like once a year or something like that, but it's not really raining money once you're elected to office. People are very excited to get you into office. And so what the legislators then the incentive is to not upset the applecart because then they're not going to be able to even raise money or afford reelection from a minimum of like 20 or $30,000 of lobbyists money is on the table per year, that you just have to call and get it if you're an elected official. And they are guaranteed yeses compared to sitting there for hours doing call time from through your, maybe like constituent list, or your like, normal person donor list. And getting no, after no, after no, after no, there's no reward in that.
Michael Pope
You know, you mentioned their lobbying effort. And certainly they've had an extremely successful lobbying effort, if you look at what they've been able to build into the Virginia Code. For example, municipal governments and community groups that have broadband networks, they're not allowed to set prices lower than incumbent providers. So get this, if you want to open up a competitor to Comcast, where I live, you cannot charge less than Comcast, if you're a community or municipal. They built that into the code, right, to protect themselves and harm the competition. There's another part of the code that localities are not allowed to subsidize the development of locally controlled infrastructure. So the government of Alexandria actually would be forbidden from subsidizing the development of locally controlled infrastructure. Now, where I live, in Alexandria, the city government actually is building some infrastructure that they're hoping to lease to these major corporations. So they're actually seeing dollar signs here, build some of the infrastructure, and then lease it to a Cox, or Comcast, or one of these big groups. So there is some money to be made here for local governments, not to run the networks necessarily, but to own some of the infrastructure. There's another part of the code that's built to help these corporations, that makes you prove that you're going to be profitable within a year. So like, there's all these obstacles that you have to overcome if you want to have a community based broadband network, or a municipally owned broadband network. So we're probably going to see a very small percentage of that $700 million go toward any kind of community broadband or municipal broadband.
Thomas Bowman
Yeah, and I think about what you could do with $700 million, you could literally set up your own public service utility, and you can have that eat the costs and fund it like a rate payer model. Because the proper business model to do uneconomical work is the public utility. And rural electrification is a great example of that. And so we're going to hear from our two Virginia Tech professors later in the show. So we don't want to give away everything, but you're going to hear some really interesting stuff.
Michael Pope
Well, actually, what you just mentioned there, there was a really interesting comparison with what FDR did with rural electrification as part of the New Deal. And so are we going to see that happen with broadband? That actually kind of seems doubtful? That's not the trajectory we were headed on right now.
Thomas Bowman
No, but you know, what's interesting is it doesn't actually take that much effort, as far as law changes go, to improve outcomes for normal people. You just need political will. And of course, prerequisite understanding and acknowledgement that there's an issue. And then once you understand what the problem is, the code, you can just kind of see it. Okay, we need to delete this or amend that. And for the most part, you don't need any new legislation to fix it. You just need to change the way you currently operate.
Michael Pope
And, you know, Thomas, there's another thing we should talk about, which is your voicemails. Yes, that's right. You can send your voicemail to Transition Virginia, we might even play it on the air. The voicemail that we've got today is from Super friend of the podcast, one of our OG listeners from way back in the day, Adam Paley.
Adam Paley
Now that the Census Bureau has released the census data, could you discuss the implications of this data on the future of Virginia politics, whether that's redistricting and beyond?
Michael Pope
Thank you for the question, Adam. And thank you for being such a fan of Transition Virginia over the years. That's a really wide open question about census data and redistricting. Thomas, what do you make of that?
Thomas Bowman
Yeah, well, the census data wasn't necessarily as great for Democrats, frankly, as they had planned on it being, but the reality is Northern Virginia is probably going to pick up some House seats, probably going to pick up at least a Senate seat, and Southwest Virginia is going to lose at least one or two of both. And then, of course, the other thing that is going on with redistricting, Michael, is the Redistricting Committee, they are starting from a blank slate, rather than considering what the current districts are, considering where the legislators live. And this is actually a very good thing. This is a win for advocates, because what you're going to get is probably this more closely aligned with the spirit of what advocates hoped for, despite still not being perfect, but you're likely to have one or more delegates drawn into the same district because of this.
Michael Pope
Yeah, actually, that's one of the things that I'm taking a look at is specific incumbent members who might end up in a district with another incumbent member. So the list that I'm looking at includes Senator Travis Hackworth, Senator Todd Pillion, Senator David Suetterlein, Senator Bill Stanley, those are all, you know, Republicans from areas that are losing population, and therefore might find themselves going head to head in a primary or a convention against another sitting incumbent. In terms of Democrats, there are also some democrats that might find themselves in this position, Senator John Edwards, Senator Creigh Deeds, they actually might find themselves drawn into districts with other members on the House side. There's areas that are, of course, losing population that are represented by Delegate Will Morefield, and Delegate Will Wampler. These are all incumbents, who might find themselves in a very difficult position of running against one of their friends, right, in the in the Caucus. Thomas, what would that be like for an incumbent member to run against another incumbent member?
Thomas Bowman
Well, it wouldn't be the first time this happened. And actually, I've got a story about this in my own family. So a great uncle of mine, Reginald Pettus, used to represent Keysville, now represented by Delegate Jim Edmonds, but Keysville, he got to serve one term in like 1959. He was an anti Byrd Democrat, who ran on a platform that we would still consider liberal today. And they did not like that he was an anti Byrd Democrat, and they redistricted him into the district of his mentor. And then he just decided not to run again. And then after that redistricting for the next 40 years, he couldn't get elected dog catcher because he was so liberal, and it was Southside Virginia. So, what's going to happen is really going to depend on who these politicians are. If they both have big enough names, or big enough egos to think that they can go head to head against another incumbent and win, they're probably going to do it, but if they're new, maybe like Senator Hackworth is new, or if they're old and want to retire, maybe they just take the opportunity to step down and avoid a primary confrontation with somebody that they think might be the stronger candidate, or that they just don't want to have a primary confrontation with.
Michael Pope
Yeah, I realize this happens every redistricting cycle where you've got incumbents that are in areas that are losing population that go head to head with other incumbents. I mean, this happens once, you know, every 10 year cycle. But this cycle is, of course, complicated by our bizarre timeline, where we're gonna have this election, and then another election, and then another election. I mean, it really does seem kind of endless, the number of primary cycles that all these people have to get through, and how does that play out? Does it complicate the fact that they would have to go through three consecutive election cycles?
Thomas Bowman
Oh, yeah, it complicates it a lot. And I mean, there's two schools of thought here, like one, is like, "That's a pain in the ass, I don't want to do that. That's a lot of time spent raising money. And not a lot of time spent being the delegate or doing your actual day job." But the other school of thought here is sometimes it serves us well to be able to run in a federal year, because you'll get more turnout. And usually when there's more turnout, it's better for Democrats. However, that would have been true in the presidential year, in the midterm year, you usually get blowback and the President's party does not do so well. Meaning, it might not be as great for Democrats to run in a federal year as they hoped. But things have gotten so delayed. And Michael, they got even more delayed, because a member of the redistricting commission tested positive for COVID, putting all their work on hold for at least a week or two. And that's an unplanned delay that you might get more of. So it is a mess. It is really the way to phrase it. It's a complete mess.
Michael Pope
It's getting messier everyday, too.
Thomas Bowman
Right. I, on this show, was very critical about that redistricting amendment. Because me, anybody who had spent time in politics, was all saying the exact same thing, it was gonna play out exactly like this.
Michael Pope
Well, now hold on a second, Thomas. We did not know at the time when voters were considering that amendment, that the census data would be so late. I mean, there was the expectation that the census data would show up when it normally does, and it did not show up at that time period. So I mean, in the alternative universe where the commission didn't exist, the General Assembly would be grappling with the late census data. And we don't really know how that would have played out.
Thomas Bowman
But what you're bringing up there is just additive on top of all of these other problems that would have been present anyway.
Michael Pope
Sure, yeah, like in that alternative universe, one of the members would have gotten COVID. And like that, also, I mean, yeah, true.
Thomas Bowman
I mean, so like the-
Michael Pope
But you can't blame this on the amendment. I mean, I think we don't know-
Thomas Bowman
There's a lot you can blame on the amendment that because-
Michael Pope
I don't think you think that.
Thomas Bowman
No, it took them months to get it set up properly. They didn't have it staffed.
Michael Pope
Yeah, but we didn't have census data, you're right, it took a while to get it stood up. But that all happened while we were waiting for census data.
Thomas Bowman
Okay, but you know what the dirty secret is, you don't always need census data, because the states are taking their own census all the time, you just have to wait technically on the federal one. But there's no reason you can't just get the board in place in advance and get a plan together so you know, generally, an outline of what you're going to do in advance.
Michael Pope
I know you want to play with the new commission, I'm just not buying it. I don't think the new commission is the reason for the fact that we're in the space that we're in. I think the reason, the principal reason, that things are so squishy with the redistricting is the timeline of getting the census data so late, and that's what's causing this triple election cycle, that the fact that census data came in so late, because if it had come in on time, we might be having a different conversation right now.
Thomas Bowman
Yeah, but both these things can be true at the same time. Right? So I think it's a very complicated subject. Obviously, the Redistricting Committee is not going the way advocates hoped it would go. And we've got to move on from this discussion. Because we've got a great interview that we want you guys to hear.
Michael Pope
We do. This interview actually is really, really on point. You're gonna want to hear this discussion that we've got from these two Virginia Tech professors on broadband because we go deep into this subject, and it's really a fascinating listen.
Thomas Bowman
Yeah, so let's take a break, Michael, because when we come back, we'll be joined by the two professors from Virginia Tech, Erv Blythe and James Bohland, and they're going to explain how a handful of legacy telecom providers cornered the market for broadband and they'll tell us what we should do about it?
Hey, look Transition Virginia has another voicemail and this one's from Richard Crouse. Let's see what he's got to say.
Richard Crouse
This podcast is so jackleg that John Frederick's radio show is five steps above it.
Thomas Bowman
Nevermind, it's just another crank call.
Michael Pope
We want your voicemails and it's easy to do. Just launch the voice memo app in your smartphone, record a reaction to something you've heard on the podcast. It's that easy.
Thomas Bowman
Hear something you like? Something you don't like? Perhaps you've got a question about something you heard?
Michael Pope
Send the sound file from your smartphone to TransitionVApodcast@gmail.com. We might even play your voicemail on the air.
Clark Mercer
This is Clark Mercer. You're listening to my favorite podcast about Virginia politics, Transition Virginia, with Michael Pope and Thomas Bowman.
Michael Pope
And we're back on Transition Virginia. Let's talk broadband. Now everybody knows how important broadband is and everybody wants universal access.
Thomas Bowman
But the playing field isn't even. Big telecom and traditional cable providers have had a leg up. State laws specifically prohibit local governments from undercutting the competition.
Michael Pope
Enter more than half a billion dollars in federal stimulus money. Governor Ralph Northam and Democrats in the House and Senate are investing $700 million and expanding broadband and a handful of communication industry execs are about to clean up, AT&T, Comcast, Verizon, CenturyLink and Cox.
Thomas Bowman
A new book out this fall, titled, "Vibrant Virginia," has a chapter that details how a handful of big telecom companies, and traditional cable providers, rigged the system to help themselves and stifle the competition.
Michael Pope
And we're joined by the dynamic duo of Virginia Tech professors who wrote the blockbuster broadband chapter. Our first guest is a former Vice President for Information Technology and Chief Information Officer at Virginia Tech, Erv Blythe. Thanks for joining us.
Erv Blythe
Thank you. And thank you for your interest in this.
Thomas Bowman
We're also joined by a professor Emeritus of Urban Affairs and Planning at Virginia Tech, James Bohland. Thanks for joining us.
James Bohland
It's great to be with you. I look forward to conversation.
Michael Pope
Me too. Well, let's get right into it. A handful of major corporations were able to use their power and influence to prevent community and municipal broadband from solving the access problem. That's the message of the chapter the two of you have written for this forthcoming book titled, "Vibrant Virginia." Now, perhaps not surprisingly, not everyone agrees. Governor Northam's broadband advisor, Evan Feinman, says, "[he] does not think community and municipal broadband providers have been able to solve the problem of rural connectivity." This is what he said in a recent panel discussion for, "Vibrant Virginia."
Evan Feinman
We have not seen a great flowering of municipal networks. I think there are some strong use cases for municipal networks, but broad rural connectivity is probably not one of them.
Michael Pope
So what exactly is the track record for municipal and community broadband? Professor Bohland, we'll go to you first.
James Bohland
If you look outside of Virginia to places, interestingly, more on the Western Coast and Western United States, they have been very successful in creating broadband network systems within rather small communities that are connected out to the rural areas. One of the classic and best examples we have is in Utah, it's called Utopia, got started as a very small network system, and then began to branch out into the surrounding communities. And they have connected their citizens for a very, very low cost to high bandwidth internet access.
Michael Pope
Is Utopia, a community broadband provider?
James Bohland
Yes.
Michael Pope
And it's from your perspective, a success story, then?
James Bohland
Yes. And in fact, we have some limited success stories here in Virginia. The most recent one I would point to is Floyd County, which has connected about 97% of its citizens into that network. The difficulty in Virginia is that it's very hard to set these up. The state presents lots of hoops that you have to jump through in order to create them. If we don't empower our municipal communities to get into the broadband exploration, we're going to be left at a comparative disadvantage in the next five to 10 years, not just within the United States, but internationally, where they have made massive investments in creating municipal broadband systems that are very powerful both in terms of consumption, but also production of new forms of information, and new forms of technological innovation. So it's imperative, I think, that the state begin to look at how to empower its municipal governments to manage and create their own broadband network systems.
Thomas Bowman
Professor Bohland, as far as these communities that lack access to high speed internet, where are these underserved communities and how is underserved community defined?
James Bohland
Good question. That's a very complex answer. But let me give you a very short one. Number one is, underserved communities exist both within urban areas and in rural areas. There's a lot of talk about rural, underserved areas, now recognize that urban environments have communities that are also underserved. And the access there may be due to physical access, but it also may be financial access. The problem is that historically, in this state, we've allowed legacy providers to define what's underserved. And it was an ongoing discussion about whether it should be 20 megabits download, three megabits upload, or what should be the ratio. The new federal stimulus talks about 100 megabits download 20 upload. But I think that's even being debated as whether that's successful if you want constructive, productive networks, it ought to be much higher. But the bottom line to your question is that state governments, and the federal government, has traditionally, with the help of the legacy providers, laid out what they consider to be the definition for underserved communities.
Thomas Bowman
I'm wondering what this means for all the new federal stimulus money that will be spent on broadband. Will all that money essentially solve the problem? The Northam Administration certainly thinks so. So here's the Governor's broadband adviser, Evan Feinman, on how this will play out.
Evan Feinman
The next Governor of Virginia will solve the problem. Every single household, every single home and business in Virginia will have a robust broadband connection.
Thomas Bowman
So, Erv Blythe, what do we make of this prediction?
Erv Blythe
What are some really extraordinarily good elements to the federal stimulus legislation that I think will have a great deal of variance across the country in terms of how we all states spend that money, and what they get out of it, in terms of what we call produce oriented networks, serving communities, and those that don't. The big plus is something like at the national level, I think it's about the current version has about $65 billion allocated. A really strong element that might be important to Virginia is the fact that this will be in grant monies, not loans. And it will require the states that participate, to submit a five year action plan. And in that action plan, the state has to indicate how it intends to be informed by collaboration with local community entities. Any successful grant proposal going to the federal government is going to have to demonstrate how they're coordinating how the person applying for the grant is coordinating, and being influenced by community interest. And maybe, most important, and especially where Virginia's concerned, under this stimulus legislation states may not exclude cooperatives, nonprofits, public utilities, a local government from eligibility. Now, in Virginia, we've said there are a number of obstacles to any of these types of entities competing on a level field with the incumbent providers. But that's going to be an extraordinarily important element to the stimulus dollars. And it'll be interesting to see how Virginia plays that.
Michael Pope
Well, on that issue of the limitations there are many limitations on municipal and community broadband. And certainly lawmakers took action to help carve out those provisions. But the Northam Administration says, "Take a look at other states where big telecom has not been able to craft these restrictions. They don't seem to have the vibrant municipal or community broadband networks." Now the Governor's broadband adviser, Evan Feinman, says those constraints might not actually be holding back much of anything.
Evan Feinman
I do think there's a very common view that the challenge of rural broadband would have been solved, were it not for artificial constraints on publicly controlled or municipal networks. And the...I think the strongest counter argument to that is that there exists many states where there are no artificial constraints on publicly owned or municipal networks, and those states continue to have rural broadband issues.
Michael Pope
Professor Bohland, are those constraints really constraints at all?
James Bohland
Evan is right in one sense. So there are lots of barriers to strengthening rural broadband, that may exist in other areas, lack of funding, I mean, some states just have not been willing to fork over the kind of money that is needed. But to argue that, you know, you can use that as a, an example of why restrictions on municipalities really don't matter. They do matter. In this state, we've had attempts in the past to create more viable municipal broadband systems. And there are some rather significant barriers that have existed. And just to create an authority, you have to submit an application and has to be vetted by the state. And it's not an open process, somebody can veto that. And who is doing it and why may not be open to public display. There are some constraints with regard to how much these municipalities can cost. They can't be competitive, or too competitive against the legacy providers.
Michael Pope
They're actually specifically forbidden from under charging the competition, right? This is an important part of how this works in Virginia that I think I want to underscore for the listeners, if you're starting a community or broadband network, you're legally forbidden from charging lower than Cox, or AT&T, or Verizon. Is that right?
James Bohland
Yeah. And if you look at the Governor's statement of 2020, it's very clearly specifies that as a service prices cannot be lower than any incumbent provider. Services can't be subsidized by the local community. And you have to demonstrate profitability within a year, which a lot of, you know, commercial providers are loathed to be able to do within a year. So there, you know, those aren't silly constraints, they are major constraints. The fact that some states don't have those and haven't successfully expanded in the rural areas, is not a justification for those constraints. It's it's really, there are other constraints that other states have that they haven't been able to deal with. I think the bottom line that you see is that a number of states, and most recently, the state of Washington, has passed legislation that make that opens up monies for in the creation of municipal broadband. So that if it's, if it's not a constraint, it's interesting that so many states now are removing what had been barriers to those kinds of networks. So I think the constraints are real. And in Virginia, they have had significant impacts. We've had some successes, but it's a long trudging battle for many of those nonprofits or municipalities to create them. And they will tell you that.
Thomas Bowman
Okay, so municipal governments are forbidden from undercutting the competition. So what? The Northam Administration says any local government that wants to set up a broadband system can just set up an authority. Here's Evan Feinman again.
Evan Feinman
While there is you know, what I would consider to be a fairly silly and counterproductive prohibition on municipal governments, as municipal governments operating municipal broadband networks. There is nothing stopping any municipality in the Commonwealth from creating an authority, which they can do by ordinance, they already have the power to do that, under the Wireless Services Authorities Act. And that authority can take in any subsidization it wants from the local government, it can build anything it wants, they can offer any sort of network technology to any customer at any price with no restrictions, period, full stop.
Thomas Bowman
Period, full stop, you heard him. So is setting up an authority really an easy workaround? Erv Blythe, I'll go to you.
Erv Blythe
Well, I would argue that in the office of broadband report that Jim just mentioned, they basically list these three restrictions that prices shall not be lower than incumbent providers, that services that cannot be subsidized by any community or cooperative, that services must be profitable within a year. And this is all backed up. If you go to the Code of Virginia 56-484 offering up communication services, Code of Virginia 56-265, for certificate operators a telephone utility Code of Virginia 15.2-2108 feasibility study for providing cable television services. Code of Virginia provision of broadband capacity turns underserved areas. Not all the restrictions that are put into the Virginia Code are nullified by the Broadband Authority Act, the broadband authority still have some of the same kinds of restrictions. And we have to remember, you know that that is basically an authority is basically a political entity. They tend to be very conservative, you know, maybe they want to act entrepreneurially, but with these kinds of restrictions, there are many communities that would never take the gamble, that they would be able to overcome these obstacles and be successful in this arena, with Virginia's communications, corporate interests, aligned against what they desire to accomplish.
Michael Pope
So your chapter in, "Vibrant Virginia," has a whole bunch of recommendations. I'm wondering if we could learn a little bit about these recommendations, especially in light of everything that's happened since you have written the chapter, right, because the Governor's people sort of make an argument that one of the things about this chapter is it doesn't take into account all these recent developments that we've seen with the federal stimulus money, and in terms of expanding broadband. And so where are we now in terms of the kind of recommendations that are coming out of your book? Professor Blythe, we'll start with you and then go to Professor Bohland.
Erv Blythe
Well, first, I want to emphasize, this is not a Republican versus Democratic kinda thing. In Virginia, the state of Virginia, for 400 years, the government has been set up to serve powerful corporate interests to the detriment in some cases of community interest. Now, quite often, they are one in the same. But in Virginia, there's a real abhorrent politically to allowing communities to act as entrepreneurial entities. So one thing we said in our recommendation was that Virginia should encourage, not discourage, locally driven community business models, and that's corporations, municipal utilities, nonprofit institutions, homeowner associations, any of these entities that want to get in. Virginia basically have legislation that encourages and supports the emergence of those kinds of models not limited in it.
Michael Pope
Then Professor Bohland.
James Bohland
Oh, we spend millions of dollars in the state as do other states, and have not solved this problem yet. It's not an intractable problem, it can be solved. Our concern is, and the reason for some of our recommendations are, that if you are not careful how you spend this money, in terms of the architecture that you create for your networks, you're going to be locked in for 10 and 15 years in an architecture for the broadband networks, that is outdated, within five years. And as a consequence, you can't be competitive. For example, we've we've set out some recommendations about what we think the architecture should be, should be open access, it should be reliable. And we've talked about these in detail. It should have a comparative, advantageous bandwidth. It shouldn't be a 25 megabits system, it needs to be much bigger than that. You need symmetrical bandwidth that it's upload download speeds need to be comparable, it needs to be scalable, it needs to be cost effective. And we we talked about these we need not to go in there. But the point is that if you do not take care in how you design these, you can create a network that in five years will not allow the Commonwealth to be competitive. So you really have to look at how you want to structure the network architecture. And many of these recommendations, with regard to scalability and so on, and bandwidth, symmetricality are not something that legacy providers want to meet. And so how you meet them is going to be critical for the future of the Commonwealth.
Thomas Bowman
Okay, so we've actually got a question from a listener. Josh Stanfield wants to know, how do large contributions from the telecom industry to politicians in Virginia affect policy?
James Bohland
That's a bit of a oxymoron isn't that? I mean, it it...That's why companies give large campaign contributions, because they want to be able to structure policies in the ways that is to their advantage. And you see it not only just in terms of the amount of money they give, but the services they provide to politicians with regard to phone bank services, etc. as a way to kind of curry favor. It's all about access, who gets access in the halls of Richmond, or in the halls of Congress, and they're willing to pay money and restructure how they allocate resources to ensure that they get access.
Thomas Bowman
Yeah, on the subject of campaign spending. Verizon has contributed over $600,000 just in this campaign cycle, from 2020, to where we are currently in 2021. AT&T has contributed $50,000. A company called Lumen is over $31,000 and T-Mobile at over $14,000. So these are not small chunks of change. Erv Blythe, do you have anything to add on this topic?
Erv Blythe
It's so much about access. A surprising number of congressional and Senate staffers basically have telephone company backgrounds. They are on leave, or on a sabbatical, or they've left Verizon, AT&T, Cox, Comcast, they've left one of these companies, and they've gone to work. So it's about access and information flow. I'll give one example, a congressman that was one of our biggest supporters in the early days of Virginia's version of the internet. I was the principal investigator for something called the NSF Net for the piece that was in Virginia, and a congressman that was very supportive when we were trying to push that out into schools across Southwest Virginia, a Virginia congressman called me up and basically said, "You know, I've been talking to Hugh and Hugh tells me that anything based on the Internet protocol is not going to work in Southwest Virginia. They aren't- they just aren't going to be able to understand, it's too complicated." Hugh was, at that point, the first name of a president of Bell Atlantic of Virginia. And that was an honest answer. I mean, in the mind of that Congressman, Hugh was the expert.
Michael Pope
Are we talking about Congressman Rick Boucher of the Fighting Ninth?
Erv Blythe
Yes. And again, Rick became maybe one of the biggest, strongest advocates. He started the Internet Caucus in the Congress, back in the early days of the internet. He was just an incredible, a strong supporter. But in the beginning, when we first started talking to him about it, he was basically sharing the perspective, his only perspective, which is a perspective he was getting from the major telecommunications provider in the area.
James Bohland
Thomas, you cited some dollar figures. What I think is important is to track down who gets that money. And I think you would find that it's really those figures who are running for public office who have some influence over the telecommunication policy within the state. It's not broadly distributed.
Thomas Bowman
Yes. That's a good project for Josh Stanfield for further research, I would think. So that's all for this episode.
Michael Pope
Support us on Patreon for send us an email to TransitionVApodcast@gmail.com.
Thomas Bowman
Like and follow @TransitionVA on Twitter and anywhere pods are cast.
Michael Pope
Read the transcripts at TransitionVirginia.com and special thanks to Emily Cottrell for figuring out what the heck we're saying.
Thomas Bowman
Thanks for being on the Transition Team. We're your hosts, Thomas Bowman.
Michael Pope
And I'm Michael Pope.
