Neubeam Lawsuit Against Broadband Authority Dismissed

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By Stefanie Jackson –  A lawsuit against high-speed internet provider Eastern Shore of Virginia Broadband Authority (ESVBA) by a competitor, Declaration Networks Group, known commercially as Neubeam, was recently dismissed.

ESVBA was established in 2008 “to provide high speed data service and internet access service to local businesses, local government, and the public,” according to an Accomack and Northampton County resolution.

But Neubeam opposed ESVBA’s business practices, and in December 2018 it filed a petition with the State Corporation Commission (SCC), which regulates Virginia utilities and other corporations.

Neubeam stated ESVBA violated Virginia law three times by failing to petition SCC for the authority to provide communications services, providing service in areas where three or more competitors were providing essentially the same service, and proposing to expand service to additional areas where three or more competitors were providing service.

Accomack and Northampton counties established ESVBA in accordance with the Wireless Service Authorities Act, found in Virginia code, Title 15.2, Chapter 54.1.

The regulations for communications services such as those provided by ESVBA are in Virginia code, Title 56, Chapter 15, Article 5.1.

In its final order, the SCC said it was “being asked to determine if a wireless service authority created under Title 15.2 is subject to the commission’s jurisdiction under Title 56.”

The Supreme Court of Virginia gives the SCC authority to interpret laws, specifically, the intent of the Virginia legislators that wrote the laws.

According to the “plain language” of the law, a “wireless service authority” like ESVBA is not required to petition the SCC for permission to provide service, the order stated.

Since the Wireless Service Authorities Act was passed in 2003, 30 wireless service authorities have been incorporated, and none were required to petition the SCC for approval.

Furthermore, “legislation was introduced in 2005 that would have expressly inserted ‘wireless service authority’ into the list of localities and authorities subject to the commission’s jurisdiction” but “the bill did not become law,” the order continued.

ESVBA was started in 2008 with about $11 million in state and federal grants, plus $266,000 in grants from Accomack and Northampton that it repaid, even though it was under no obligation to do so.

In 2010, ESVBA began providing high-speed internet by hard-wired connections using fiber-optic cable. At that time, ESVBA’s service was available only to institutions like government offices, public schools, medical centers, and large-scale commercial businesses.

In 2016, in response to customer demand, ESVBA began providing broadband to private homes.

At the same time, ESVBA was selling its services to three other internet service providers (ISPs), including Neubeam, allowing the ISPs to provide broadband to private customers by   wireless signals beamed from towers and poles.

Because ESVBA has an open-access network, it treats its customers equally and does not offer wholesale pricing to the ISPs.

In August 2018, ESVBA announced a two-year, $8 million expansion that would increase its availability from about 25% to 70% of the Eastern Shore.

Neubeam filed its petition against ESVBA in December 2018.

Neubeam called for an SCC investigation and an order for ESVBA to stop providing internet in all areas with three or more competitors “after a period of time sufficient to permit its existing customers to find an alternative service provider.”

In January 2019, ESVBA filed its response to the petition and a motion to dismiss the case. The SCC assigned a hearing examiner to the case.

Another ISP, Eastern Shore Communications, supported Neubeam’s petition in a brief filed Feb. 5.

Two days later, the hearing examiner, Ann Berkebile, heard oral arguments by attorneys for ESVBA, Neubeam, and the SCC.

Neubeam requested a second hearing, but the request was denied and the case was dismissed by the SCC in its final order Sept. 16.