Subsidy Programs

 

The cable industry is prohibited from applying for grants offered by the Virginia Tobacco Indemnification and Revitalization Commission. Grants are available to local governments and nonprofits only. The cable industry supports sensible and targeted government initiatives designed to spur broadband deployment in unserved areas of the country where absent some help, no private party would find it viable to build a high-speed broadband network. We believe that the government can and should play a role in making certain that the incredible economic and social benefits of broadband connectivity are extended to households and small businesses in those unserved areas. However, government assistance for broadband deployment must be carefully targeted to solely unserved communities.

 

In 2016, for the first time, the Virginia State Budget allocated funding to be used by the private sector for broadband construction in unserved areas. The Budget language serves as an example of how government assistance should be used for broadband deployment. 

 

“... shall facilitate the extension of broadband networks by the private sector and shall focus solely on unserved areas. Areas designated to receive funds for construction through the federal Connect America program or receiving other state or federal funds for construction are not eligible to receive funds through the Virginia Telecommunications Initiative. The Department shall encourage additional assistance from the local governments in areas designated to receive funds to lower the overall cost and further assist in the timely completion of construction, including assistance with permits, rights of way, easement and other issues that may hinder or delay timely construction.”

 

In served areas of the Commonwealth, taxpayer dollars have been used to overbuild existing broadband deployed as a result of private investment in infrastructure, often in rural and smaller markets. Government owned and managed systems are not required to abide by the same regulatory requirements as the private sector, as such they focus on unserved areas only. States that allow municipal broadband providers to overbuild existing telecommunications providers stifle private investment and deployment.


Government programs subsidizing broadband should prioritize deployment in unserved areas. To best utilize scarce government resources, funding should be targeted first to unserved communities, rather than forcing taxpayers and telecommunications consumers to subsidize competitors to existing broadband providers. Government funds targeted to unserved areas promote efficiency and complement competitive markets by targeting support to those limited areas of the Commonwealth where no service is offered.

Any government broadband project should be targeted for middle mile projects only and not last mile. Programs should seek public-private partnerships whereby government provides the middle mile fiber to which private telecommunications providers could provide the last mile access to consumers. Competitive bidding among all interested companies is proven to be just as effective in delivering broadband to areas that need it, while staying true to the principles of efficiency, competitive neutrality and fiscal control.

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1111 East Main Street, Suite 802

Richmond, Virginia 23219

804-780-1776

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