The 2000+ homeowners in Lansdowne on the Potomac in Leesburg received some welcome news recently when its homeowners association (HOA) Board of Directors outlined a pending agreement to buy out OpenBand's exclusive -- and hotly contested -- monopoly cable, internet and telephone service contract.
While certain relatively minor details are still to be worked out, homeowners can expect to spend less money on their cable, internet and telephone services -- or either service individually -- than they are effectively paying through the required 'bundled' charges in their current monthly HOA fee.
The HOA sued OpenBand to get out of the contract but did so after a five-year statue-of-llimitations had expired. It did save other HOAs in Virginia the risk of similar deals when its experience helped motivate state lawmakers to outlaw such contracts in the future.
OpenBand countered by suing the HOA's board, the Loudoun County Board of Supervisors and – individually – Supervisors Ralph Buona and Shawn Williams, claiming interference after the Lansdowne and other HOAs’ complaints effectively prevented OpenBand from earning a franchise agreement to sell its video services elsewhere in the county. That lawsuit was ultimately tossed out by a Virginia Circuit Court judge. A resulting legal stalemate motivated both sides to pursue a settlement.
Now, the HOA -- albeit it for a price to be finalized -- is set to get out of the contract that otherwise would have legally obligated homeowners to buy OpenBand's "bundle" for a total of another 50-plus years under Virginia law. Homeowners have Lansdowne Development Corp. CEO Leonard "Hobie" Mitchel to thank for that. Attempts to contact Mitchel via phone and email met with no responses.
OpenBand secured their long-term monopoly service contract when it agreed with Mitchel to 'wire' all homes at its own cost back in the early 2000s. At the time, Virginia and federal law allowed such contracts. Also at that time, Lansdowne on the Potomac was one of the first planned communities to receive "high-speed" internet access deploying fiber-optic wires. Since then the law has been repealed and federal law expressly prohibited such deals. But the Virginia Constitution does not permit any law - state or federal -- to apply retroactively. So despite heroic efforts by Buona, homeowners were stuck.
The draft agreement stipulates that OpenBand is to continue its monopoly service for up to 30 months after the agreement is signed with maximum 5% annual price increases. After that, homeowners are free to buy the services they want at whatever the 'market' is willing to provide. If no competitor materializes, OpenBand would remain the only option for wired service. I'd like to think Lansdowne on the Potomac would present an attractive marketing opportunity to the likes of Verizon, Comcast, Cox, and Direct TV, et al. Many residents already have signed up for Direct TV satellite service because of its additional channel offerings.
One not-so-minor detail which earned the current Board members applause at this week's meeting which drew an estimated 80+ homeowners: they've been paying $25 every month toward a fund to settle matters with OpenBand. So no one-time special assessment is in the offing. Homeowners could get a "dividend" back if the settlement comes in under the funds that have been socked away. Either way, the HOA fee is expected to decrease after the 30-month period because it won't include OpenBand's charges.
Check back for updates. And because this makes Lansdowne on the Potomac an even more attractive -- and cost-effective -- place to live / raise a family / downsize, give me a call and I can share the rest of the Lansdowne story with you. I should know, my husband and I live there!