Grays Harbor is one of the many communities across the state vying for more than $400 million in mostly federal dollars Washington state has earmarked for new broadband infrastructure. It’s also one of several PUDs whose efforts have been thwarted by private telecommunications companies that leveraged a sometimes opaque objection process to scuttle otherwise competitive applications.
This story is a part of Crosscut’s WA Recovery Watch, an investigative project tracking federal dollars in Washington state.
Legislators say the objection process was meant to encourage cooperation with existing internet service providers. But public utilities paint a picture of companies exploiting the process with dubious claims about existing service and open-ended promises about expanding service that they may or may not follow through on.
Comcast’s objection came through the Public Works Board, a 14-member committee of volunteers appointed by the governor. It’s one of three bodies that award broadband grants in Washington.
In December, the Public Works Board rejected eight rural funding projects over “credible objections” in the most recent round of funding. According to documents obtained by Crosscut via public records request, those objections include three from Comcast and three from Rural Wireless, a Nevada-based company that markets itself as a startup and serves about 8,000 customers in the Western U.S.
The Legislature made changes to the project application process this year that broadband staff members say resulted from Grays Harbor’s experience. Now the Public Works Board may also enact reforms to its objection process that would require objectors to provide more evidence of existing service or concrete plans to expand service. The board will consider the proposed changes at its April 1 meeting.
“The objection process wasn’t well-defined,” Hanny said. “There was no opportunity for anybody to mitigate any concerns or issues, and really the people that suffered are the citizens of the Oakville-Porter area that still don’t have a clear path to broadband.”
A problematic objection process
In theory, the objection process is meant to avoid funding projects that would replicate existing infrastructure or result in “overbuild,” said Sen. Lisa Wellman, D-Mercer Island, who sponsored the 2019 bill that created both the state Broadband Office and the objection process.
“The process isn’t one of trying to pit people against or groups against each other,” Wellman said. “The process is trying to get broadband out to as many people as possible without overbuilding.”
Broadband grants are awarded through a competitive process open to local governments, tribes, nonprofits and for-profit companies. After a funding cycle closes, the Public Works Board publishes the proposed project areas on its website, at which point existing providers have 30 days to submit written objections stating that they either already provide, or will commit to providing, equally fast internet service in the area within two years.
Wellman said a minor overlap shouldn’t disqualify a project, and she would like to see the Public Works Board take the initiative to resolve the overlap issue rather than disqualify the application. Under state statute, the board can also choose to fund only part of the requested amount.
But Public Works Board staff and leadership said the statute did not specify how much “overbuild” ought to disqualify a project — so they rejected applications that contained any overlap at all.
A public records request submitted to the state Department of Commerce for the Comcast objection document has not yet been returned. But Comcast spokesperson Andy Colley wrote in an email that the company objected to Grays Harbor PUD’s application because it “would result in redundant service” to 249 homes and businesses in Oakville where Comcast already offers speeds of 100 megabits per second (Mbps).
State data suggest actual connection speeds are much lower. In speed tests submitted to the state Broadband Office, 68% of Grays Harbor internet users registered speeds lower than 25 Mbps, the federal definition of broadband (Washington state recently upped its definition to 100 Mbps). A map of those results shows users in the area of the grant proposal — the Elma to Oakville corridor along Highway 12 — getting some of the lowest speeds.
(Disclosure: Comcast has served as a sponsor for a number of past and ongoing Cascade Public Media events.)
Public Works Board Vice Chair Gary Rowe, who is in charge of the broadband committee, said staff members rate and rank the applications before presenting them to the board, which largely accepts staff recommendations unless there’s a specific concern. There was no board discussion about the specific objected projects, and he didn’t know the details about the areas in question in the Grays Harbor proposal.
“If there was a credible objection, then the application wasn’t considered for funding,” Rowe said. “We took the staff information there. We didn’t go and look at maps to see what the overlap was or not and that type of thing, we took it as a credible objection and went from there.”
Public Works Board staff said they didn’t feel they had the authority to allow Grays Harbor PUD to modify its application to cut out the offending area after the application had been submitted. Rowe said the recently passed House bill should solve this problem by allowing applicants to revise their project area after submitting.
“That’s one project that could easily have been funded had Grays Harbor had the opportunity just to cut a very small area out of their project,” said Sheila Richardson, broadband program manager of the Public Works Board.
Unsubstantiated claims
Colin Willenbrock said he is all too familiar with companies taking advantage of the objection process to stifle competition. Willenbrock works as general manager of the Pend Oreille Public Utility District, which has applied three times now for funding — twice through the Public Works Board and once through the state Broadband Office.
Each time, the Pend Oreille PUD was hit with an objection from Rural Telecom Inc., an Idaho-based company that does business as Pend Oreille Telephone Co.
In its objection, RTI asserted it serves more than half of the 904 homes in the proposed project area with broadband speeds, a claim Willenbrock described as “unsubstantiated.” The PUD commissioned its own research on service speeds, which showed many of those customers have much slower connections. And the state Broadband Office survey found that out of about 240 respondents in Pend Oreille County, 85% logged speeds lower than the federal definition of broadband.
In Eastern Washington, objections from Rural Wireless disqualified a combined $10.7 million in funding for three projects in Adams and Franklin counties. Public Works Board records indicate the objections included promises to improve service to those areas.
“It’s a fair process to say, ‘OK, we don’t want to waste money if it’s already being built to,’ but you have to somehow verify the legitimacy of these claims,” Willenbrock said. “Otherwise it’s a big kick the can down the road, and the customers are the ones who suffer.”
Neither Pend Oreille nor Grays Harbor PUD provides service directly to consumers. And unlike Jefferson County PUD, which is taking advantage of a recent law change to get into the retail internet business, neither plans to compete in the broadband marketplace. Both aimed to create open-access networks, where companies like Comcast and RTI could access new customers without having to pay for the infrastructure.
“We’re not trying to compete with RTI or any of the private telcos,” Willenbrock said. “We’re just trying to fill a niche that hasn’t been filled.”
Potential reforms
Rowe said he believes House Bill 1673 addressed the issues with the application process that resulted in Grays Harbor PUD getting disqualified. The bill, which the Public Works Board requested, creates a “preapplication” process by which applicants can submit a proposed project area and refine it in response to any objection from an existing service provider.
“We recognize that that was a problem,” Rowe said. “There should be an opportunity for an applicant to revise their application.”
In the case of Pend Oreille PUD, RTI told the Public Works Board in its objection that it planned to build fiber to more than 90% of the “potential customers” in the project area by 2024. State statute says objectors must either already provide service or commit to building it within two years.
Even if RTI doesn’t follow through, it can continue to object to Pend Oreille PUD’s funding applications, but the Public Works Board is not allowed to reject Pend Oreille on the basis of that objection, unless RTI can prove that its failure to build out new service was “the result of factors beyond the broadband service provider’s control.”
Public Works Board staff admit there are few mechanisms to hold companies like RTI to those vague promises.
“It became clear with the objections that there wasn’t a whole lot of evidence that [the buildout] was going to happen,” said Richardson, the broadband manager. “They didn’t have to provide that, because we really have nothing spelled out as to what we expect to see in order to decide to deny funding the project or considering the project.”
Richardson has proposed adding additional questions to the form objectors must fill out that would require them to substantiate their plans to extend broadband service to the areas in question by providing documents like engineering plans, permits or right-of-way agreements.
The Public Works Board is scheduled to vote on those changes on April 1.
Both Hanny and Willenbrock credited the Public Works Board with working to address the issues with the process, and both plan to apply again for the next round of funding, which is currently open and closes on April 26.
But Willenbrock said he isn’t sure exactly what to do differently. The feedback Pend Oreille PUD got on its application indicated lt could have more clearly articulated some of the strengths of its proposal, but that wasn’t very helpful. The thing that’s holding the PUD back, it seems, is out of its control.
“We just want to know what we need to do to improve next time,” Willenbrock said. “We’re still kind of scratching our heads.”
