Rural, Blue-Collar Virginia Town
Is in Battle Over Broadband Access
By MARK WIGFIELD
Dow Jones Newswires
BRISTOL, Va. -- This southwestern Virginia town was settled in 1765 by Indian fighter Gen. Evan Shelby, who built his home as a fortress to protect settlers from the Cherokees.
Today, the town of 20,000, whose main street is divided by the Tennessee-Virginia line, is an outpost in a battle over who will wire rural America for "broadband," or high-speed Internet and data services.
Bristol, a blue-collar town that has seen the arrival and departure of railroads, textiles, chemicals and electronics, sees the outcome as key to its future.
Bristol, Va., (population: 20,000) is an outpost in a battle over who will wire rural America for "broadband," or high-speed Internet and data services.
So town leaders were ecstatic when a federal judge in May overturned a state law that had stopped dead an effort by the Bristol Utilities Board to wire the town for commercial-broadband service. Such laws have been passed in nine states at the behest of big telecommunications companies that say government competition is unfair. Bristol represented the first successful court challenge of such laws.
"This is a very, very hot issue for us," says Dick Geltman, general counsel for the American Public Power Association, which represents municipal power authorities nationwide. "There are a number of other state legislatures where the Bell operating companies are pushing for barriers. So many of our members are rural, and they are the last to be served."
See a chart of broadband cable access by U.S. city population size in 2000
The victory could be short-lived: Virginia's telecommunications providers have asked the U.S. Court of Appeals in Richmond for a stay of the lower-court decision pending appeal.
But the fight raises questions about the commitment of the private sector to bridging the so-called digital divide in rural America, even as it lobbies in Washington for deregulation and other considerations by promising to extend high-speed networks to remote places.
One prominent supporter of a pending Baby Bell broadband-deregulation bill is U.S. Rep. Rick Boucher. A Democrat who represents Bristol, Rep. Boucher has urged the small towns in his district to wire themselves for the future. He compares municipal broadband to the electric utilities small towns set up decades ago.
"Private industry could have done it, but they didn't," Rep. Boucher says. "It was the absence of affordable private-sector access that led Bristol to deploy this network to begin with." Bristol's situation notwithstanding, Mr. Boucher says he supports the Baby Bell deregulation bill because he believes, overall, deregulation will lead the Bells to provide more rural advanced services, such as broadband, on their own.
Nationwide, it is clear that rural broadband deployment lags. According to Forrester Research in Cambridge, Mass., about 14% of urban households with Internet service have broadband, compared with 8% of rural households.
"It's almost entirely a supply-side story," says Jed Kolko, a Forrester analyst, because regardless of location, half of all households surveyed said they would like broadband. But it is costly to roll out where population is sparse.
"Given the demand for broadband in populated areas, the gap between urban and rural is likely to grow more before it narrows," Mr. Kolko says.
In Bristol, local telephone service is provided by Sprint Corp. Sprint provides some high-speed service through digital subscriber-line modems, officials say, but wasn't willing to install the high-speed fiber-optic network the town wanted.
So Bristol's leaders took matters into their own hands and spent $7 million laying a network. It now serves government buildings, but was designed to be leased out to a private operator who could also hook up businesses, industry and homes.
But the state's powerful telecommunications industry was watching. Bristol had barely filled in the cable trenches when, at the prodding of Bell Atlantic, now Verizon Communications Inc., the state legislature passed a law barring municipalities from providing telecommunications services to anyone other than themselves.
"We were just blindsided," said Tom Taylor, executive director of the Mount Rogers Planning District, which covers Bristol and six surrounding counties.
The Virginia Telecommunications Industry Association says competition from towns would be unfair, since they can raise capital through bond issues, pay no taxes and could even subsidize phone utilities with revenues from other sources. Asks President Dana Coltrin "What company in its right mind would want to enter a community to offer telecommunications services in competition with the local government," which pays no taxes, controls rights-of-way and doesn't need to provide shareholder profits.
But Bristol fought back, hiring Washington lawyer James Baller, who has argued in cases across the country that a provision the 1996 Telecommunications Act bars states from prohibiting "any entity" from providing telecommunications service.
That argument didn't wash in a case involving Abilene, Texas. While the Federal Communications Commission was sympathetic to Abilene's desire to provide broadband, the agency concluded it lacks authority to come between a state and its political subdivision. The U.S. Court of Appeals affirmed that decision in 1999. In Missouri, the Eighth Circuit Court of Appeals is hearing a similar challenge. Oral arguments in that case aren't expected until September at the earliest.
But the tide turned earlier in May. U.S. District Court Judge James P. Jones, in a courthouse near Rep. Boucher's home about 16 miles away from Bristol in Abingdon, ruled that the Telecom Act voids the Virginia law. Mr. Jones was likely to be familiar with broadband, since Rep. Boucher led a successful effort to wire Abingdon -- and then persuaded state lawmakers to carve out an exemption in their law for the city.
"In summary, I hold that the words 'any entity' in the federal statute plainly include a municipality," Judge Jones wrote. ``The issue is not whether allowing local government to compete with commercial providers is good public policy or not. That decision has been made by Congress," whose decisions trump conflicting state laws under the Constitution's Commerce Clause.
Wednesday was the deadline in Richmond for comments on the industry association's request for a stay. But in Bristol, just blocks from the site of Gen. Shelby's fort-home, business owners hope broadband will help revitalize a downtown that is a study in contrasts: a chic coffee bar with polished hardwood floors shares the street with shuttered department stores that have been converted to storefront churches or sit vacant. "We want to be able to move with the economy," Mr. Taylor says. "If we are to keep up economically, we have to be wired."
The Rural Disconnect
Access to cable modem broadband service, which is slower than Bristol's network, decreases dramatically with population size. Broadband cable access by U.S. city population size in 2000
City's population size # of cities % of pop. with access
Over one million 8 100.0%
500,000-one million 15 73.3
250,000-500,000 41 65.9
100,000-250,000 136 40.4
50,000-100,000 355 26.2
25,000-50,000 741 15.9
10,000-25,000 1,852 7.6
5,000-10,000 2,336 5.0
2,500-5,000 3,022 2.0
1,000-2,500 4,936 0.7
Under 1,000 9,993 0.2
Source: eMarketer |
