For legal reasons, Rappahannock Electric Cooperative backs away from ambitious fiber optic plans
The county’s new Broadband Authority hasn’t had its first meeting yet, but it’s already dealing with a setback.
What was probably its best prospect as a broadband partner — the Rappahannock Electric Cooperative (REC) — is backing away from its ambitious plans to go into the retail broadband business.
Marc Seay, REC’s manager of information, technology and security services, delivered the disappointing news to the Board of Supervisors (BOS) at their Monday meeting.
“This is not the message I wanted to bring to you today,” Seay said, explaining that the decision was precipitated by a federal lawsuit filed against the electric cooperative in late October. The suit challenges a new state law that allows utility companies to use existing easements to install fiber optic cable on privately-owned land.
The legal action was brought by Culpeper homeowners John and Cynthia Grano, who say that the installation of fiber lines across their land would violate their constitutional property rights. Their attorney, Joshua Baker, contends that while the REC is entitled to maintain its power lines on the property, that permission shouldn’t include fiber optic cable.
“You might look at (fiber optic) and say, well it’s just another wire, what’s the big deal?” he told the Rappahannock News. “The big deal is that those wires are owned by for-profit companies.”
He argued that the law passed by the legislature last summer would deprive the couple of financial compensation for use of the easement. Last month, the REC filed a motion to have the suit dismissed on the grounds that the Granos have not suffered any injury and have no standing since the cooperative switched to an alternative path for the fiber installation that doesn’t cross their property.
Broader broadband impact?
Still, the case is being watched closely by other utility companies in Virginia. The law the Granos are challenging is designed to expedite broadband expansion in rural areas by permitting utilities to use existing easements. If they ultimately have to pay homeowners to install fiber on those easements, it could increase the cost of building out fiber networks, already an expensive undertaking.
Before the suit was filed, the REC board had committed to moving ahead with a major broadband construction project in its 22-county service area, with an estimated cost of $600 million. To help offset that expense, it applied for grant money through the Federal Communications Commission’s (FCC) new Rural Digital Opportunity Fund (RDOF).
But faced with the prospect of a legal battle that could make it difficult to meet construction deadlines imposed by the grant, the REC withdrew its application for the federal funding in November. It said it was not able to reveal that decision until last Friday, when the “quiet period” of the RDOF award process ended.
And that, at least for the foreseeable future, stifles a partnership opportunity initiated last spring when the REC contacted county officials to gauge their interest in being part of a broadband expansion project. In response, the BOS had pledged $100,000 to show its interest, with the possibility of another $100,000 coming from other sources.
Seay said the REC will continue with the installation of an 820-mile fiber backbone to improve the quality and security of its electric grid. At the same time, he indicated that the cooperative will step up its efforts to develop partnerships with other internet service providers (ISPs) who could extend those fiber connections to homes — the role REC said it had hoped to fulfill.
“Now that we know we’re not going to be in the retail broadband business, we’re back to looking at those partnerships aggressively,” he said.
Seay also mentioned that two other companies did receive sizeable RDOF grants in response to proposals to provide internet service in Rappahannock County. One is the Shenandoah Telecommunications Company, or Shentel, which was awarded $708,037. The other is Elon Musk’s SpaceX, which has started to roll out an ambitious project called Starlink, through which thousands of small satellites in low Earth orbit will provide internet service. It received $1.7 million. The funding is distributed over 10 years.
County officials have spoken with Shentel, but it was unable to provide details on how it would spend the money due to the RDOF quiet period. Now that it’s over, county administrator Garrey Curry said he expects to have more in-depth discussions with Shentel soon. Its proposal to RDOF focused on serving the southeast corner of the county. Shentel already provides fiber connectivity to the county’s public schools and the library.
As for Starlink, SpaceX cast a wide net in its bid to provide a solution to rural broadband challenges. Overall, it was awarded a total of $885 million in RDOF money to provide Starlink service across 35 states. That’s about 10 percent of the RDOF awards. It’s too early to say what impact it could have in Rappahannock County. Starlink is still in beta testing, but so far, the results have been generally positive.
The Broadband Authority will begin sorting through its options when it has its first meeting, tentatively scheduled for Feb. 15. After addressing administrative tasks, it will turn to determining its next steps, particularly now that REC is largely out of the picture. One of its first priorities could be to pay for a comprehensive study to first find out as precisely as possible which households are served and how, and which ones aren’t, and then to map out a detailed plan for building out service.
BOS Chair Debbie Donehey, who also serves on the county’s advisory broadband committee, concedes that REC’s decision to withdraw its application for RDOF funding was “definitely a blow.”
“I felt the wind go out of my sails,” she said, “particularly since other rural counties have been working with electric cooperatives to bring reliable broadband service to their communities.
“I knew it was possible that they wouldn’t get the funds they needed to move forward, but their involvement appeared to be the most straightforward option to meet our goals,” Donehey said. “Now we will turn our focus to other options, and with persistence, seek to identify other ways to provide for Rappahannock County citizens.
“What we need,” she added, “is a partner, possible multiple partners, that want to work with us, and understands that our goal is to bring broadband with adequate speeds up and down to a large percentage of our population, and will work with us to obtain grants.”
By Randy Rieland
For Foothills Forum