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Editorial: The most anti-growth bill in Richmond

Editorial: The most anti-growth bill in Richmond

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The most dangerous bill now pending before the General Assembly is one you’ve never heard of.

It has nothing to do with any of the usual headline-grabbing issues. It doesn’t deal with abortion or bathrooms or guns or photo ID at the polls. Instead, it’s a technical little bill that appears to modestly regulate who can offer broadband Internet services in Virginia, but actually stifles the potential for economic growth in rural Virginia and some non-rural places, too.

We call your unfavorable attention to House Bill 2108, introduced by Del. Kathy Byron, R-Campbell County.

In the spirit of naming bills the exact opposite of what they would do, her so-called “Virginia Broadband Deployment Act” would actually make it harder to extend broadband to areas that don’t presently have it — or don’t have enough of it.

Here’s why this bill should raise red flags for any legislator interested in creating jobs: “Twenty-first century economic development is all about broadband and workforce,” says Roanoke City Manager Chris Morrill. Byron’s bill would make it difficult for localities to provide the former, which also has negative implications for the latter. “If you don’t have broadband, Millennials don’t want to be there,” Morrill says.

Why would any legislator introduce a bill that would hurt economic growth? Here’s what’s really going on: This appears to be a battle between the telecommunications industry and local governments, but is really a battle between the telecommunications industry and the rest of the business community.

Telecommunications companies happily point out that they already provide broadband Internet. That is very true. However, they are for-profit companies and, quite naturally, provide services where they can make a profit, and at the levels at which they can make a profit — and they don’t provide services where they can’t make a profit. That’s how the free market works. Nothing wrong with that. Now, here’s the problem: There are plenty of people in the business community who want more service, and faster service, than the free market can supply.

Here’s why this becomes a public issue and not just a private dispute: This is really about economic development. Broadband is becoming a key infrastructure requirement the same way that highways and airports are. If a community doesn’t have it, well, businesses move on to the places that do.

Local example: In 2015, the marketing company Wordsmith moved out of Wytheville because Internet speeds there weren’t fast enough to handle the files it needed to move back and forth with its clients. It set up shop in the Virginia Tech Corporate Research Center instead. Good news for Blacksburg; not so good for Wytheville.

Nationally, Chattanooga and Kansas City have seen themselves become boom towns for technology companies specifically because they do have fast Internet service.

So what happens when the economy demands more and faster Internet service than Internet providers can economically provide? That’s where some localities – including those in the Roanoke Valley — have formed municipal broadband authorities to lay their own fiber. Localities see this as simply providing infrastructure, just as they provide water and sewer. Telecommunications companies see this as competition — perhaps even socialism.

But is it really? The Roanoke Valley Broadband Authority wasn’t formed because Marxists in local government want to seize the commanding heights of the economy. It was formed because capitalists in the business community were insisting on more service than their fellow capitalists in the telecommunications industry could profitably provide. Local governments simply came down on the side of economic growth, as they should.

Byron’s bill would make it difficult for existing municipal broadband authorities to expand and new ones to get started. Curiously, for a bill sponsored by a Republican, it would create more regulation, by requiring that the state authorize any creation or expansion of a broadband authority (plus lays on other regulations, as well.) For a bill that purports to protect the free market, it actually distrusts the free market: If telecommunications companies were already providing the service the rest of the business community wanted, the business community wouldn’t be clamoring for local governments to step in.

The telecommunications lobby has the better ideological argument: Government shouldn’t be competing with the private sector.

Those promoting economic development have the better practical argument: We’re competing in a global economy and many of our competitors — both domestic and foreign — have faster Internet connections than the private sector can provide. Do we simply give up? Or do we do something? Given a choice between ideological purity and the practicality of economic growth, we’re always going to choose economic growth.

Analogy: If we had only privately-built highways, but really needed an interstate to spur economic growth, and private companies couldn’t or wouldn’t build it because they didn’t think they could make enough money on it, wouldn’t we opt for the government-built interstate? Sure we would, because it would be good for jobs overall. Same thing here.

Here’s a real-world example: The Franklin County Board of Supervisors is currently studying the availability of Internet service in that rural county. Private companies serve the populated areas where they can make money — and quite understandably don’t serve the areas where they can’t. The problem is that Internet service is no longer a luxury, but a necessity — and an expectation. Some students resort to doing their homework on the front steps of the school — because they can access the Internet there, but can’t at home. That also means large portions of the county are essentially no-go zones for any business that requires broadband service. That’s not a good business model for Franklin County in the modern economy.

One option Franklin could consider is joining the Roanoke Valley Broadband Authority, or creating its own. Byron’s bill would make that more difficult, perhaps even impossible. Her bill may protect one industry, but hurts the economy overall.

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