Supervisors Seek Antitrust Investigation of OpenBand

With a public hearing set next week on a franchise agreement for the television, telephone and Internet provider OpenBand, the Loudoun County Board of Supervisors voted Tuesday to ask the Virginia Attorney General to investigate the company for possible antitrust violations.

The feud between OpenBand and two of the communities it serves – Lansdowne and Broadlands Southern Walk – has gone on for years. The main complaint centers on a requirement to pay for OpenBand’s service even if residents are unhappy with it. Furthermore, the exclusive easement agreements that just recently came to light bar other providers from serving homes within those easements; so even residents willing to pay for two services would not have the option.

“Both barriers must be removed or circumvented if residents of the two communities are to have access to the same service options as the other county residents,” according to legal opinions from the Hubacher & Ames law firm obtained by the county. “The combination of the exclusive easements, bulk pricing and multiple corporate subsidiaries suggests the possibility of an antitrust violation.”

With that opinion, supervisors pressed forward Tuesday.

“It’s a very complex issue. There is enough smoke here to warrant us at least asking the question to settle some of these issues,” said Supervisor Jim Burton (I-Blue Ridge).

Supervisor Eugene Delgaudio opposed the measure, saying the board was reaching beyond its role.

“This is a major step,” Delgaudio said. “Based on the opinions, I respectfully disagree with the board taking this up as an issue. It implies there was wrongdoing. I feel that this is an improper position for the county to be taking.”

But Delgaudio stood alone.

“This is a difficult situation for homeowners who have to buy OpenBand,” said Supervisor Andrea McGimsey (D-Potomac), expressing concerns about the easements and 75-year contracts. “I think it’s absolutely appropriate for us at the local level to ask a higher level of government to take a look at issues they have more control over.”

Supervisors have no authority to take action regarding antitrust laws, so they are asking the state to examine the issue.

“We’ve heard, from a lot of residents, concerns about not only the service, which we will deal with as the franchise agreement, but the contracts and how the contracts came about and the exclusivity of these easements,” Supervisor Lori Waters (R-Broad Run) said, adding that both communities continue to raise concerns about the quality of the service “and their inability to get another provider while still being obligated to pay for a service they do not avail themselves of.”

Sharon Hawkins, a spokeswoman for OpenBand, did not directly respond to the antitrust accusations, but said she did not believe any potential investigation should hinder progress on the franchise agreement. OpenBand’s franchise agreement expired several years ago and it has been operating under extensions.

“OpenBand continues to work in good faith with the county and partner communities, toward continued service expansion and enhancements, and continued excellence in customer service,” Hawkins said. “We hope that today's decision by the board of supervisors doesn't slow the franchise agreement approval process significantly, as this request to the attorney general doesn't directly impact that decision.”

The Southern Walk Homeowners Association expressed support for the investigation request: “The Southern Walk Homeowners Association believes the board of supervisors clearly understands the complexity of the various exclusive blanket easements, which prevent any other telecommunications company entry into our community. The Southern Walk HOA hopes Attorney General Cuccinelli will carefully review the ‘exclusive easements’ and Van Metre/OpenBand's self-dealing, as it relates to the Virginia Non-Stock Corporation Act.”

Southern Walk filed has also filed a lawsuit against OpenBand in federal court.

The request was approved on a 6-1-2 vote, with Delgaudio opposed. County Chairman Scott K. York (I-At Large) and Supervisor Stevens Millers (D-Dulles) were at another event representing the board during the vote. Miller said he supports the request.

On a separate 7-0-2 vote, the board agreed to advertise another public hearing for the franchise agreement. York and Miller were not present.

For more information about the franchise agreement, visit www.loudoun.gov/cable.