WV House Bill 3093

EXECUTIVE SUMMARY: This report was split from Roane County Broadband Report and Prospective Project, revision 6. Provides an overview of HB3093, including links to the full text and section by section summary. Provides a basic analysis of the bill as it would apply to a project in Roane County. Lists known projects in other counties.

Overview of WV House Bill 3093

This bill passed on 4/8/17, was signed on 4/26/17, and goes into effect 7/7/17.

Short hypertext (HTML) format full text, 23 pages: http://www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=HB3093%20SUB%20ENR.htm&yr=2017&sesstype=RS&i=3093 (tip, print this to PDF)

Long portable document format (PDF) full text, 45 pages double-spaced with line numbers: http://www.legis.state.wv.us/Bill_Text_HTML/2017_SESSIONS/RS/bills/HB3093%20SUB%20ENR.pdf

Old internet related laws §31-15C are repealed – the larger effects of this are unclear.

§12-6C-11: WV Economic Development Authority (EDA), WV Board of Treasury Investments, WV Enterprise Advancement Corporation, WV Enterprise Capital Fund, along with oversight from the Broadband Enhancement Council, provide funding for non-profit co-op projects. Up to $175M is available on revolving loan, $50M investment pool, $15M per business per project, and $10M loan insurance per broadband project.

§31-15-8: Defines WV EDA broadband project loan insurance fund. Co-op ISP limits are, (1) eligible under-served area is 15+% of people with measurable data rates of less than 10Mbps down + 1Mbps up (not “up to”), (2) with no more than 3 wire-line or fixed-wireless "broadband" (10:1Mbps) service providers (note FCC broadband = 25Mbps, used in §31G). Network segment limit is eligible under-served area is per §31G-1-2 or no more than 2 wire-line providers (not fixed-wireless). Has public notice advertising requirements, existing-provider challenge process, court appeal process – projects for 1Gbps end-user service are exempt. Loan limit = 1/5 fund limit.

§31G, Section 1: Broadband Enhancement Council (BEC). Starts with findings and definitions, including in section 1-2 broadband as reliable consistent low-latency data throughput at FCC defined rates (25Mbps). BEC duties and powers include oversee broadband expansion, make various types of recommendations to the legislature, broadband maps, hire consultants to help, educate the public, and organizational rules. Section 1-10-A says BEC can recommend to the legislature a pilot project for no more than 3 municipalities or counties to establish non-profit broadband cooperatives. That wording seems like a single one-off pilot project, but could be recurring (maybe further lobbying?). Section 1-12 says BEC can get non-state grants which can be directly used for broadband projects. Section 1-13 establishes trade secrets policy, including criminal penalties (misdemeanor, $5k, 1yr prison). Section 1-14 says secretary of commerce can propose new rules to legislature for approval. Overall, BEC only has authority over the pilot project co-op, spending of non-state grants, and certain approvals for co-op ISP’s created under section 2 (below) – it has no influence over other broadband providers.

§31G, Section 2: Cooperative Associations. Defines terms and rules for the co-op ISP structure. Formation with 20+ people minimum (no max), reiterates legislature’s findings, co-op powers to operate a ISP, and defines co-op members. Then goes on at length about articles of incorporation, bylaws, meetings, directors, officers, officers shall be bonded, stock/voting/ownership, director/officer removal, and referendums. Section 2-16, 2-17 defines a marketing contract, includes ISP exclusivity with a 5 year limit, along with remedies for breach of contract. Then continues with more atypical corporate rules – can purchase property, annual reports, conflicting laws do not apply, can own other ISP’s, contracts with other ISP’s, extends rights to co-op ISP’s from other states, and existing companies can convert into a co-op ISP. Section 2-25 continues 2-17, making third parties liable to the co-op for persuading members to breach their contract. Sections 2-26 excludes co-op from conspiracy, monopoly, price fixing. Section 2-27 says the co-op includes all provisions of business corporation laws under §31D and non-profit corporation laws under §31E, except where they conflict with §31G.

§31G, Section 3: Conduit Installation and Microtrenching. Defines rules, its conduit buried 1 to 2 feet deep in trenches cut up to 3in wide, must be double needed capacity for future use by others, simple permitting process, no permit fee, and reporting on (map of) completed conduit to BEC.

§31G, Section 4: Make-Ready Pole Access. Defines basic terms and rough process to be permitted to attach cable to utility poles. Includes guidelines and rules for resolving pole conflicts.

Note, the term public utility is not used here, but broadband is considered a utility by the FCC.

Analysis of WV House Bill 3093

Overall, its a good start, more notes...

“Up To” Advertising Ban: The original bill had a ban on advertising “up to” rates (e.g. offering “up to” 25Mbps while knowing network capabilities makes that impossible), which was removed by Senate amendment.

Real Bandwidth: The bill defines broadband as actual bandwidth, not “up to”, not “burst”, low enough latency for real-time communications, and presumably not peak hours slow downs. From that standard a survey of real world conditions can determine if a service qualifies as “broadband” location by location, and disqualify incumbent providers that would otherwise be assumed to block expansion of a co-op ISP service area. For example, while SuddenLink offers service over 25Mbps in Spencer, most evenings it slows to under 10Mbps.

Pilot Project: The lead sponsor of this bill, Roger Hanshaw (R Clay), said (via email) “we had no particular projects in mind as targets for the bill, but since its adoption, we have learned of a couple that might qualify. Specifically, I know that Calhoun, Gilmer, and Clay Counties are beginning to talk about forming a cooperative to take advantage of this bill.”. If Roane gets involved quickly we might still be able to join this pilot project. Likely benefits include increased media attention, more technical support, better loan terms, access to other state resources, access to federal grants to BEC, and political support to make it successful, including suppression of opposition by incumbent providers. However, potential negatives include loss of local control, increased political exposure to lobbying efforts to undermine the project (i.e. its a bigger target), increased legal exposure to incumbent provider challenges, and we might be stuck with decisions which differ from local community wants.

Cooperative ISP: §31G-2 strongly resembles §19-4 Agricultural Cooperatives, perhaps it started as a copy & paste of that text. It has unusual language, seemingly able to choose the set of corporate rules it follows, §31D for-profit, or §31F benefit, or §31E non-profit, but the pilot project is defined as non-profit. The term member “products” is unclear, could be their data traffic. This was misreported as “up to 20 families”, its actually a minimum of 20 internet users – that’s it, no upper limit, no service requirement, no residency requirement, we could recruit nearly the entire state, but this differs from where service can be provided.

Lower Cost Pole Access: An FCC report cites a FiberNet estimated make-ready cost of $4,200 per mile potentially reduced to $1,000 per mile with a simplified procedure like §31G-4.

Buried Cable: §31G-3 increases costs vs direct-burial cable, while reducing costs for future competitors.

HB3093 Related Projects in Neighboring Counties

Overall, nothing yet, but there is interest in getting something started in Calhoun, Clay, and Gilmer.

State Pilot Project: Roger Hanshaw said (via email) Calhoun, Clay, and Gilmer counties have projects in early planning stages, and that Roane might be able to join in.

Calhoun County: Commissioner Michael Hicks said (via email with Lisa) “We haven't discussed it as a commission yet, but it is something I want to learn more about. I agree that it would make sense to have our surrounding counties work together on this. There is a meeting on Tuesday, May 30th at 2:00 at the Mid-Ohio Valley Regional Council on this matter.”

Clay County: Clerk is unaware of any new broadband related projects, or anything on their Commission schedule.

Gilmer County: Jason Phares at Glenville State (304-462-7361 x6240) says they want to get a project started but need funding. In Glenville fiber is available from Frontier, Lumos, and ShenTel.

Jackson County: Clerk is unaware of any new broadband related projects, or anything on their Commission schedule. Also checked with their “IT guy”, he’s not aware of any new projects.

Kanawha County: Emailed, no reply. Called Clerk, person that might know wasn’t available.

Wirt County: Clerk is unaware of any new broadband related projects, or anything on their Commission schedule.

Notes

Contributors: Lisa Messineo, Matt Erb, Jim Bostic, and encouragement from Roane County Democratic Party.

Legal Note: Copyright 2017 by Chris Dalzell. Limited license is given to freely distribute this work as-is to Roane County residents. For any & all other usage, questions & comments, please email megaburn@citynet.net.

Revision History:

Origin (05/15/17): Report on HB3093 to Roane County Democratic Party, and need for county project.
Revision 1 (08/12/17): Split from Roane County Broadband Report and Prospective Project r6.