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    OpenBand sues county, HOAs for $50 million; alleges unlawful conduct

    In yet another twist to a nearly three year saga, telecommunications firm OpenBand on Oct. 10 filed a lawsuit against 15 defendants,  alleging Loudoun Supervisors Ralph Buona and Shawn Williams acted beyond their lawful authority in attempting to force a compromise between the business and two homeowners associations.

    In the lawsuit, OpenBand says Buona (R-Ashburn) and Williams (R-Broad Run) told the firm they must cut a deal with two HOAs already embroiled in a private legal battle with the firm in order to secure enough votes with fellow supervisors to approve a 2012 franchise agreement.

    OpenBand is asking for not less than $50 million in compensatory damages to be determined by a jury as well as an order declaring that the Loudoun Board of Supervisor’s Sept. 18 denial of a franchise agreement exceeded the scope of legitimate authority granted by the Board of Virginia Code, among others.

    The Loudoun Board of Supervisors, Buona, Williams, Lansdowne on the Potomac Homeowners Association and its board members as well Southern Walk at Broadlands Homeowners Association and its board members are all named as defendants in the lawsuit.

    Buona declined to comment on the lawsuit, citing pending litigation. Williams could not be reached for comment prior to press deadline.

    County Attorney John Roberts and Chairman Scott York did not return calls for comment.

    Ben Young, director of government affairs for OpenBand said the firm filed the lawsuit with regret.

    “It was filed with regret. We regret that it’s come to this but we would rather be spending our money on upgrading service then litigating. But this is the option we were given,” Young said.

    In the lawsuit, OpenBand says Loudoun supervisors pressured and coerced them to relinquish a series of private contracts and real property rights agreed on in 2001 with developer Van Metre and to make cash payments to the HOAs as a precondition to the firm receiving a new franchise agreement that would have given them access to public right-of-ways.

    OpenBand has an initial Telecommunications Service Agreement with the HOAs for 25 years, followed by four 10-year renewal periods, for a total of 65 years.
    However, despite the private agreement, by county law telecommunications providers, such as Comcast and Verizon Fios, must have a franchise agreement that allows access to public-right-of-ways in order to provide service to communities. 

    “The Board’s egregious actions amounted to extortion. Rather than evaluate [OpenBand Multimedia’s] 2012 franchise application based on lawful criteria, the Board, specifically through Buona and Williams, refused to approve the 2012 franchise agreement unless [OpenBand Multimedia] acceded to the HOAs demands,” the lawsuit says.

    These demands made by the HOAs and backed by the Board exceeded supervisors’ regulatory authority under state and federal law and the Loudoun County Open Video Systems (OVS) ordinance, according the lawsuit.

    A ‘no’ from the start

    Buona, the lawsuit says, met with OpenBand representatives in November where the supervisor indicated that if the firm reapplied for a franchise agreement, he would not judge the application on its merits. Even if the application was in full compliance with all applicable regulatory OVS recommendations, Buona allegedly said he would deny the franchise agreement unless OpenBand made concessions of their rights under the agreement made with Van Metre to provide exclusive cable, phone and Internet programming to the HOAs.

    At the same time, Lansdowne on the Potomac and Southern Walk at Broadlands had lawsuits pending in federal courts, alleging OpenBand’s agreement with Van Metre for the private easements violated Federal Communication Commission laws.

    OpenBand was denied a franchise agreement by the previous Board of Supervisors in November 2011. Less than 30 days later, the firm filed a lawsuit in Loudoun County Circuit Court, asking that the new supervisors be made to reverse the decision. That lawsuit is still pending.

    The current Board agreed to take a new look at the franchise agreement, but ultimately denied it on Sept. 18 by a 5-3-1 vote – a day before the agreement was set to expire.
    York (R-At Large), Ken Reid (R-Leesburg), Geary Higgins (R-Catoctin), Buona and Williams voted to deny the franchise agreement. Supervisors Matt Letourneau (R-Dulles), Eugene Delgaudio (R-Sterling) and Suzanne Volpe (R-Algonkian) were in favor of striking the deal with Open Band, while Janet Clarke (R-Blue Ridge) abstained.

    The county denied the agreement even though OpenBand had never been found in violation of any service provisions within its original franchise agreement.

    OpenBand says no board member identified any substantive deficiency with the 2012 franchise application. In fact, the board’s outside telecommunications counsel told the board that “compared to the franchises given to Comcast and Verizon, [OpenBand’s] proposed franchise agreement was more favorable to the county and to residents than the Comcast or Verizon agreements.”

    Settle other litigation first

    OpenBand alleges that while the 2012 franchise agreement was pending, Buona and Williams said they would not approve the application unless OpenBand settled their litigation with the HOAs and relinquished their rights under the Telecommunications Service Rights and easements.

    Williams allegedly made such public announcements and voted on matters relating to the 2012 franchise agreement, despite also being a homeowner in the Southern Walk development and previously serving on its HOA board.

    In a April 23 meeting at Buona’s invitation, OpenBand representatives met Jeff Chapman, president of the Lansdowne on the Potomac HOA and Jon Whitbeck, who serves on its board of directors.

    During this meeting, Chapman is quoted in the lawsuit as repeatedly saying “You gotta give me something on price,” concerning OpenBand’s Telecommunications Service Rights and pricing.

    The franchise agreement was placed on the Loudoun board’s agenda for a May 2 vote, but was delayed by more than a month in the hopes of getting the HOAs and OpenBand to settle their differences.

    But Chairman York conceded during the May 2 meeting that linking the private battle between the HOAs and OpenBand and its public franchise agreement was improper and beyond the board’s authority.

    “I hope that OpenBand, as well as the HOAs, will come to an agreement that revises the original agreement because quite frankly the difficulty we have if we turn this down is to explain to a court why we did not agree to a franchise agreement that is better than the other franchise agreements that we agreed to. We can’t explain that,” York is quoted as saying in the lawsuit.

    In the weeks that followed OpenBand says Chapman, in a phone conversation with the firm’s representatives, demanded it reduce the price it charged under its Telecommunications Service Rights by 30 to 50 percent.

    By the time of the June 12 vote on the firm’s franchise agreement, Buona is alleged to have asked OpenBand to put a price on the private easements. The easements are not owned by OpenBand Multimedia, the franchise applicant, but by the firm’s entities in Lansdowne and Broadlands, which did not have business before Loudoun supervisors.

    Buona on June 12 got supervisors to agree to another delay on the franchise agreement vote, placing it for discussion during a Sept. 18 meeting. The idea was to give the HOAs more time to negotiate with OpenBand.

    Free legal advice

    The lawsuit says on June 18, Steven Fredley and Michael Nilsson, attorneys for the Lansdowne HOA, sent an unsolicited letter to the county’s attorney advising the county how to defend OpenBand Multimedia’s appeal from the denial of the 2011 franchise application.

    Despite not being a party in the appeal, the Lansdowne HOA paid for legal advice and gave it to the county for free. The letter tells the county that OpenBand Multimedia’s appeal had no legal merit and the 2011 denial was not reviewable on appeal. It also said the Loudoun Board’s regulatory authority was subject to “no limitation at all.”

    The lawsuit goes on to further allege that Buona in an Aug. 23 meeting with OpenBand’s representatives said the firm had to cut a deal with the Lansdowne HOA and he could get five votes in favor of the 2012 franchise application.

    Buona, the lawsuit says, reasoned “You can’t divorce politics from it.” The supervisor also said that “If we can get this done, I have the ability to get five votes,” noting that he could “swing” York back and bring along Supervisor Letourneau, among others.

    Further, Buona is quoted in the lawsuit as saying if an agreement between OpenBand and the HOAs was close but not final by the Sept. 18 board meeting, he would further manipulate the franchise process in order to secure concessions from OpenBand by moving to “kick it down the road” for another 20 to 30 days.

    Two days later, attorneys for the Lansdowne HOA sent a letter to Buona and Williams containing the HOA’s settlement demands, which included amending OpenBand’s Telecommunications Service Rights to expire for all services in 10 years, relinquishing its easement rights in eight years and reducing its pricing by 35 percent from the rates charged by comparable providers.

    In a Sept. 10 letter, the Southern Walk HOA sent a similar letter, demanding OpenBand’s Telecommunications Service Rights expire in five years and that the firm forfeit all of the option years. The HOA also demanded that the price charged to homeowners be reduced to $89 and that OpenBand provide an additional 10 percent discount on top of the proposed price reduction to “defray the costs Southern Walk incurs that are associated with foreclosed, vacant or delinquent lots.”

    The Southern Walk letter told supervisors that if OpenBand agreed to the terms, it would withdraw its objection to a 2012 franchise agreement application.

    Southern Walk HOA President Erika Cotti, who is also listed as a defendant in the lawsuit, declined to comment, saying she had not yet been served.

    The defendants have 30 days to respond to the lawsuit in court.

    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 Times Community Media and sits on its Board of Directors.

    Comments

    Open Band would be out of business if it weren’t for these type of deals. Van Metre should be barred from building in Loudoun since they were part of this mess. yeah, I looked at both areas when buying and glad I didn’t(and not once did the Van Metre sales person mention anything about 75 year contract). It’s hard to believe in a county with so much wealth and great school systems, we’re stuck with a shady/deceitful company like Open Band.


    Does the 5 year development law apply to the MWAA?


    I continue to wonder about the side note to all of this on a local level.  You have Chuck Shotten, constantly attacking and mocking both this news site, and OpenBand, and all people republicans, while seeking support from republicans for a local election.  Why?


    Oh the irony of OpenBand saying the defendants tried to Extort “a better deal”.  All the while Bill Dean, who gave more than $100K towards last year’s elections.  He though he had bought the Board of Sups, State Delegates etc.  Instead the General Assembly passed a law (thanks to Senator Herring’s SB-628) that prohibits a developer from entering into a contract longer than 5 years and the LCRC BoS voted to deny OpenBand’s second franchise application.
    Yes, OpenBand is the victim.  They have been wrongly targeted. OpenBand was so wronged, that they needed to file suit against 11 private citizens, who have the misfortune of being volunteers on their respective HOAs.  Darn those pesky citizen volunteers and double darn those BoS member who only tried to advocate for their constituents.  OpenBand is the greatest, most technically advanced company and they have done nothing wrong.


    Well I hope to BoS knows what they are doing.  Past performance would suggest they don’t, and went “cowboy” on this whole thing and will get torn apart by a competent attorney in court.  As a tax payer who would have to foot bill, I hope not. 

    I don’t live in an OpenBand area either but definitely support shutting this mess down.  I’d also actively avoid buying in an OpenBand area.  I was looking at homes the other day online and saw a nice SFH in Broadlands.  Then I noticed it was in Southern Walk.  Never mind. 

    I find it funny that OB thought they would make it 75 years, or whatever the agreement is for, without a torch and pitchfork revolt from the homeowners.  Everyone loves being forced to pay for substandard service, whether you use it or not, and also get to pay for the empty house next door who aren’t paying any of their bills.  Van Metre just laughed their way to the bank when they handed over the HOA.


    Good news for the HOAs, the FCC just filed an amicus brief urging the 4th Circuit to uphold Judge Trenga’s ruling. Stating OpenBand’s exclusive easement(s) violate Federal Law.


    I am a Loudoun resident but do not live in an OpenBand community.  1) None of the services should be mandatory.  2) The services should be available a-la-cart.  3) The HOA’s should not be the collection arm for OpenBand.  4) Other services (ex. FIOS) should not be prohibited from the OpenBand communities/right-of-ways.


    oranges869 - You seem to think we knew there was a 70 year deal in place; that is not the case. That fact was only found out when the homeowners got control of the HOA. Van Metre did that now illegal deal when they had control.

    Also it is not $89, it is much more.


    This absurd action by OpenBandit (OB) is one that should come as no surprise to anyone!  Instead of OB recognizing and accepting the fact that the majority of its subscribers are fed up with its dismal service and trying to settle their legitimate gripes in a fair and equitable manner, OB turns around and files a massive lawsuit against the very government body, of which two of its members went “over and beyond the call of duty” in their effort to assist in resolving.
    And talk about the “pot calling the kettle black”’ OB has the gall to refer to the board’s “egregious” actions as amounting to “extortion.” “Egregious”… the very word that describes its 65 year agreement that chains its disgruntled subscribers to OB!  As for OB’s other “E” word—-“extortion”—-this is what its subscriber’s feel they are doing each month when they have to pay for the substandard services they receive from OB. 
    I would suggest that OB would be far better off in its effort to service its customers, if it adopted another “E” word in its business practices—-“ETHICS”.


    Why would Open Band agree to any price reduction. 89 dollars minus 10% are you kidding me? If they reduced the price 35 to 50% then the homeowners would be ok with open band? c’mon man!  Homeowners need to pay up and if you cannot sell or rent the properties then maybe that’s a problem you should have considered before buying.


    Ooo.  Sounds like the BoS made sugar daddy very, very mad.


    Online records now show the suit. The only named defendants listed are the BOS, Supervisor Buona,and Supervisor Williams.

    This kind of attack on elected officials by a corporate entity unhappy with their votes is utterly disgusting.


    They are on the ropes. Their win to force the HOA in Southernwalk to pay legal fees overturned. They lost against Landsdowne, and now all of the cases against them are consolidating.

    They have been loosing the franchise battle for 4 years now. They have not fulfilled its promises to the people forced to buy their product thus not fulfilling their agreement with the county.

    Virginia made a new low preventing the shady deal Van Metre and Open Band created from happening again. They made a 70 year deal together; even more shady is Van Metre has a large share in the company. VA says you cannot make more than a 5 year deal ever now. The VA AG’s office is looking at the whole deal to see if it is even legal before the law and maybe after the elections will finally take the case on.

    Open Band does not have a customer that is not forced via these shady deals in their system because they have an inferior product at a higher price than any of its competition. Without the 70 year exclusive deal which is likely to go away they have no business and will go under.


    I vote OpenBand for worst run company in the county and probably world. So, they’d rather spend money on a lawsuit than clean up their act and provide up to date technology? Poor Ben Young will be stuck with this kind of shady business dealing the rest of his working life….Defending a poorly run business is not the way to get a head in life Ben.


    Did Ben Young write this article for you?  Certainly reads like it.


    Open Band is an ongoing criminal enterprise. let’s see what the Federal court says about the egregious agreements that were signed by insiderers at the Lansdowne HOA and Open Band. i wil bet the agreements that restrict competition and access are not consistent with Federal law and will be voided. problem solved.


    The Circuit Court’s on-line records have no record that OpenBand’s suit has been filed or served.  So how exactly did the LTM get a copy of a lawsuit, before they filed and served the 15+ defendants.


    It’s certainly not surprising that OpenBand gives this scoop to the paper partly owned by Bill Dean, owner of MC Dean and OpenBand.

    Two different Boards voted this down, of two decidedly differing political persuasions.  Just like HCA, another sore loser.

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