Shentel Reports Being Overbuilt with Federal Money

Dec 23, 2023

By Ted Hearn, Editor of Policyband

Washington, D.C., Dec. 23, 2023 – Taxpayer money isn’t supposed to fund broadband network deployments in places where Internet access service already exists.

It’s the so-called overbuild problem – some say it’s a real threat, while others say there are safeguards.

In a recent federal filing, a Virginia-based fiber broadband company reported being overbuilt by a competing provider that used federal subsidies.

“We have seen American Rescue Plan Act funding utilized by other providers in at least two of our markets to overbuild our existing broadband cable plant, bringing further competition,” said Chris Kyle, Vice President of Industry Affairs and Regulatory for Shentel in Edinburg, Va.

Kyle did not name the overbuilder or identify the specific markets. Under the American Rescue Plan Act, Virginia received $220 million to expand high-speed Internet access to more than 76,800 homes and businesses. Virginia’s allocation included $8.6 million for fiber construction to unserved locations in Frederick County – an area where Shentel offers service.

Shentel, a 121-year-old communications company, passes 202,000 locations in communities in Virginia, West Virginia, Pennsylvania, Maryland, and Delaware with its GloFiber Internet access service, Kyle said.

Kyle’s Dec. 14 disclosure – made under penalty of perjury before the Federal Communications Commission – comes as the Biden Administration begins to send out $42.45 billion in broadband grants under the Broadband Equity, Access, and Deployment (BEAD) Program.

Shentel, a 121-year-ol communications company, passes 202,000 locations in communities in Virginia, West Virginia, Pennsylvania, Maryland, and Delaware with its GloFiber Internet access service, Kyle said.

The Commerce Department’s National Telecommunications and Information Administration recently announced that Louisiana was the first state to be approved for its BEAD allocation – about $1.3 billion. Kansas and Virginia look close to being the next awardees.

In 2022 Senate testimony, Commerce Secretary Gina Raimondo promised that BEAD money would not invade the turf of broadband incumbents like Shentel.

“The statute is clear – unserved first,” Raimondo said. “We aren’t going to overbuild. We don’t want to overbuild.”

Doug Dawson, President of CCG Consulting in Utah, claims that NTIA and the states will hear from incumbents if they believe they will be overbuilt with federal money.

“All of the state grant programs I’ve worked with have a challenge process to make sure this doesn’t happen, and it looks like the BEAD grants have several crosschecks to make sure this doesn’t happen,” Dawson wrote on his POTs and PANs blog.