Open Band Serves County with 2011 Lawsuit

By Erika Jacobson Moore

Sept. 2o, 2012

Less than 24 hours after the Board of Supervisors voted to deny its cable franchise, Dulles-based telecommunications company OpenBand followed through with the suit it filed last year and served Loudoun County with legal action.

Sources confirmed today that the county was served with the suit Wednesday. Tuesday night the Board of Supervisors voted 5-3-1 to deny OpenBand its cable franchise, which is needed to provide services to county residents. Those opposing the denial warned their fellow supervisors a suit was imminent.

OpenBand originally filed the lawsuit Dec. 2 of last year, after the previous Board of Supervisors voted that November also to deny the franchise agreement. At the time, OpenBand representatives said it did not intend to serve the lawsuit, but “erred on the side of caution” in its filing. Under Virginia law a company or person has 30 days from an action’s date to sue a municipality. The Dec. 2 filing marked exactly 30 days from the previous board’s denial.

The company could have served the county, and moved forward with the lawsuit, at any time within a year of the filing.

OpenBand representatives declined to comment on the board’s Tuesday vote or the lawsuit. Last year when the suit was filed, OpenBand representatives said they believed politics—the county election occurred only days later—thwarted their efforts to get a fair review of the franchise agreement and they intended to refile once the new Board of Supervisors took office.

While county supervisors were reviewing the application, MC Dean, and owner Bill Dean, made significant campaign contributions to Republican board candidates, all of whom were successful in winning seats in November, leading many OpenBand customers to accuse the company of trying to buy a positive outcome on its franchise agreement.

In the December 2011 lawsuit OpenBand sought equitable and injunctive relief from the county and a judgment that the board’s denial was “unreasonable, arbitrary and capricious.” While not confirmed, sources say the suit served to the county is the same as the one originally filed.

In the suit, OpenBand attorneys stated that in the denial of the franchise, the Board of Supervisors “exceeded the authority granted to it” by the Virginia State Code because it “constitutes regulation of an open video system to a greater extent” than the federal law allows.

“Congress reduced regulation of OVS operators as a means to encourage telecommunications common carriers to provide multichannel video programming service in competition with established franchise cable operators…” the lawsuit reads, citing the federal Telecommunications Act of 1996. “…federal law is explicit: the authority of local governments to regulate OVS through the franchising process or otherwise is limited.”

While OpenBand agreed to the requirements of the amended franchise agreement, its representatives continually—during both review processes—reminded both Boards of Supervisors that they were going beyond federal law.

The suit also cites the Virginia law, enacted two years after the federal law, which “expressly recognizes the Congressionally-imposed limits on OVS franchises…”

OpenBand requested that the Circuit Court prevent the county from terminating its operations in Loudoun and compel the county to grant a franchise of not less than 12 months and “without burdensome and punitive terms and conditions…”

The suit puts the issue of OpenBand and its role in the county where many have predicted it will end up: before a judge. It is the latest step the long-running drama surrounding the OpenBand franchise and the TV, telephone and Internet services it provides to several Loudoun neighborhoods through bulk billing agreements. OpenBand maintains that the agreements are standards and help the company recoup the investments it has made into the following communities: Southern Walk at Broadlands, Lansdowne on the Potomac and Lansdowne Village Greens. But residents say the agreements have been designed to give OpenBand exclusive access to the communities over multiple decades.

For two years under the previous board the county reviewed the OpenBand franchise, a process that was complicated by a discovery that the existing franchise under which the company still operates had lapsed in June 2009 without the county’s knowledge, two lawsuits in federal courts filed by Southern Walk and Lansdowne on the Potomac, and a Board of Supervisors’ request for an anti-trust determination and possible investigation by State Attorney General Ken Cuccinelli. Under the previous franchise agreement, OpenBand has the right to provide service for up to three years after it ends. That period ended in June, but the current board granted an extension to allow for a decision last week.

The extension was so supervisors who represent the three communities could have the opportunity to continue to facilitate negotiations between the HOAs and OpenBand, in hopes of coming to an agreement and seeing an end to litigation brought by Southern Walk and Lansdowne on the Potomac. Those negotiations failed, however, leading to Tuesday’s vote, where some supervisors said the lack of a settlement of HOA lawsuits meant they could not support the franchise.

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