Virginia’s recently passed law to speed broadband deployment to rural areas now has a financial component.
Gov. Glenn Youngkin’s signature on the General Assembly’s budget bill will move $50 million over two years from the general fund to the Virginia Telecommunication Initiative, or VATI. The money, earmarked to help cover construction costs for private sector broadband service providers, follows the so-called make-ready bill passed in April to solve disputes and speed work toward getting internet to the commonwealth’s rural residents.
The new law, SB 713, is set to go into effect July 1. It addresses disputes among certain internet service providers and a few electric cooperatives regarding the make-ready process, which prepares utility poles for new broadband cable attachments, and the cost obligation for the poles themselves. The state has until Dec. 31, 2026, to spend about $750 million in federal pandemic relief funds or risk having the government take back the leftover money that targeted broadband deployment for rural areas.
Despite the fact that the federal money flowed to these projects through county governments, the state had no arbiter in place related to ISPs and co-ops. The new law puts the State Corporation Commission in charge of disagreements, using Federal Communications Commission rules already in place for such investor-owned utilities as Appalachian Power and Dominion Energy. They are also part of the broadband picture, as they own many of the poles that broadband providers would use in deployment.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
The budget bill for the 2024-2026 biennium provides $40 million in the first year and $10 million in the second year to VATI, which administers the broadband process via the Department of Housing and Community Development.
The department will use up to $30 million in the first year to supplement existing projects for make-ready costs — specifically utility poles that need to be replaced or new poles that must be added for the work to be finished. Those funds will go only to projects that sprang from the American Rescue Plan Act of 2021, awarded during VATI’s fiscal year 2022 grant round.
The bill tasks the housing department with setting up an application process and awarding the money in a competitive process to projects that it determines are at risk of missing the federal deadline. VATI will receive $1.4 million in each of the two years for administrative support. A quarterly performance report will provide an evaluation of any projects at risk.
Any balance from the $30 million that’s unspent by June 30, 2025, would revert to the general fund. The remaining $20 million would remain in the VATI budget for use on new internet access projects serving rural residents.