In an attempt to void an exclusive service contract with Dulles-based OpenBand, the Southern Walk at Broadlands HOA has filed suit in U.S. District Court.The lawsuit, filed May 13, seeks declaratory relief on three counts, including questions over the agreement’s legality, unconscionability and unenforceable servitude. OpenBand has until June 6 to answer the suit.
In the lawsuit, the HOA alleges that Van Metre, the builders of the Southern Walk, is violating a Federal Communications Commission ruling. Van Metre, it says, obtained and provided OpenBand blanket easements on every property that prevents competition. OpenBand established a contract with Southern Walk at Broadlands with a minimum term of 25 years and a maximum term of 65 years with no option to opt out.
An Oct. 31, 2007, FCC ruling says any exclusive access for video services and other real estate development is illegal under “applicable federal communications law.” The ruling has a grandfathering clause, saying the law could be enforced on new contracts and existing contracts.
The lawsuit is the latest in a series of issues over OpenBand’s service to several HOAs, including Lansdowne, Lansdowne Village Green, part of Leisure World and in the Broadlands Southern Walk.
Loudoun County supervisors are now in talks about whether to renew OpenBand’s franchise agreement, which expired in June 2009.
Many residents of the neighborhoods serviced by OpenBand have been outspoken against the franchise agreement, arguing there’s no room for competition and the quality of service they do receive is inadequate. A public hearing is set for June 13 on the franchise agreement.
If Loudoun supervisors agree to renew the franchise agreement, they would be granting the right to use the public right-of-way to the extent that the company needs to get into the subdivisions.
The rights are identical to the those that Verizon or Comcast have to provide service.
Last month, a county Government Services and Finance Committee agreed to ask the full board to tap state Attorney Ken Cuccinelli to begin an antitrust investigation of OpenBand. Should Cuccinelli find violations, the subcommittee wants the attorney general to proceed with litigation if he determines there is cause for such an endeavor.
The full board will take up that issue on June 7.
But in the lawsuit filed by the HOA, residents allege the county isn’t doing enough to protect them from a monopoly. The county is attempting to backdate OpenBand’s franchise agreement prior to its expiration.
“To our knowledge the county has yet to impose any fines, as detailed in OpenBand’s franchise agreement,” residents allege in an executive summary filed with the lawsuit.
According to the agreement, non-compliance subjects OpenBand to a fine of $500 per day, from the date of non-compliance.
“Simply put OpenBand continues to act in violation of county laws and have had very little regard for their customer base,” residents say in the executive summary.
Editor’s Note: OpenBand is a subsidiary of M.C. Dean, a Dulles-based engineering firm. M.C. Dean is the former owner of the Loudoun Independent, which merged with the Loudoun Times-Mirror in July 2010. Bill Dean, M.C. Dean CEO and President, holds a minority interest in ArCom Publishing and sits on its Board of Directors