Bills Limiting Broadband Move Forward in Mo. and Tenn. Legislatures

This week could be critical in two states that are considering additional limitations on municipal and co-op-owned broadband.

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Broadband planners and supporters in Missouri and Tennessee say that legislative battles for publicly owned broadband have reached the tipping point this week.

In Missouri, a bill that would prohibit municipalities from running broadband networks passed out of the State Senate Jobs, Economic Development, and Local Government Committee into the full Senate for debate. State Senator Ed Emery initiated Senate Bill 186 in January.

In Tennessee, several competing bills are in play, including one touted as a compromise that keeps the ban on municipal networks while allowing co-ops to offer broadband under certain conditions. Other proposals would remove municipal broadband limitations completely.

UPDATE: On Wednesday, March, 8, the Tennessee bill was amended with the governor’s cooperation to allow co-ops to provide video. The original bill prevented co-ops from providing voice or video over any broadband networks they built. The last-minute change indicates that the wording of the bill is still open to negotiation — either to favor municipalities or to favor the positions of large telecommunications corporations that oppose the measure. In 2016, for example, when the Legislature was on the brink of removing municipal broadband restrictions entirely, AT&T forestalled the vote by helping push through a measure to study the issue for another year.

Rural broadband advocates tout municipal and co-op broadband as one method of improving broadband service for rural consumers, where commercial providers have been reluctant to invest. With municipal broadband, local governments help build out, manage, or underwrite costs of the network. Power co-operatives are membership entities managed by an elected board of directors.

Battle lines drawn in Missouri

In Missouri, telecommunications incumbents and their legislative ally, Senator Emery, are attempting to kill municipal networks using a “scorched earth” approach. SB 186 prevents cities from selling any type of goods or services – including broadband – when there is one or more private-sector entities already providing that service or good.

The bill’s blanket restrictions hide the proposal’s impact on municipal broadband. Broadband advocates, aside from a handful of groups such as the Missouri Association of Municipal Utilities (MAMU), were caught unaware.

Also, the bill’s fine print gives incumbents the upper hand in defining broadband. For example, while the Federal Communications Commission defines broadband as 25 Mbps download and 3 Mbps upload, incumbents could offer 10 Mbps down and 1 Mbps and still prevent a municipality from starting its own network.

The incumbents have stated publicly they do not want to have speed thresholds that define “un-served” or “underserved.” MAMU has stated that any speeds lower than the current FCC definition are insufficient.

Proponents of SB 186 argue that as long as a community has one provider, there is sufficient competition, so no municipal buildout is required. Opponents say areas that have only one are operating within a monopoly and ought to have the right to build a competing network.

The bill also prohibits cities from creating partnerships with private sector companies to provide broadband.

The bill further handicaps cities that are eligible to build networks. SB 189 would require a community wanting the network for economic development must wait until businesses ask for broadband. The bill also requires cities to have a referendum on the network.

“SB 186 sets up onerous hurdles that threaten to sabotage a network in the early days,” according to the Institute for Local Self-Reliance. “The bill also dictates ballot language, establishes geographical limits on any local network, and clearly establishes that no funds from other municipal services can be directed toward a municipal network.”

 

In Tennessee, the battle is to repeal the anti-muni law

In 2016, Tennessee legislators push hard to repeal their law restricting municipal and co-op-owned broadband. When repeal of the ban looked like it could pass, AT&T convinced legislators to “study the issue,” subsequently buying a year’s delay.

In January this year, Governor Bill Haslam released a proposal that would allow co-ops to build broadband networks, but the bill still prohibits municipalities from building a network.

Co-ops cannot use the proceeds from one business unit (electricity services) to underwrite their Internet business. Further, co-ops can’t sell voice services. The original bill also prevented co-ops from providing video services, but there are indications the governor is compromising with legislators on that issue. (The proposals are House Bill 0529 and Senate Bill 1215.)

Haslam said removing all restrictions on municipal and co-op broadband was unfair to commercial providers. Opponents of the bill are pushing back, saying big incumbents are accepting federal subsidies that fatten their bottom line and using their power to preserve monopolies.

State Representative Dan Howell (R-22nd District) released the following statement:

“I believe it’s unfair that AT&T of Tennessee received $156 million in federal subsidies in September 2015 to provide broadband to the rural areas of Tennessee, while using their deep pockets and 14 lobbyists to kill HB 1303 [in 2016] and, as a result, any competition to their and the other big telecoms’ monopoly.”

The House bill moved out of subcommittee this week and goes to the Business and Utilities Committee for debate. The legislative battle is likely to be intense, as some legislators may back the governor’s bill even though it doesn’t deliver all they want. Other bills in play would relieve restrictions on municipalities and co-ops.

“Since the legislators feel that HB 0529 is most likely to pass and it’s better than nothing, some of them are putting their weight behind it,” said Rebecca Levings, a broadband advocate from Chattanooga. But she said some of those legislators were feeling heat not to support the governor’s bill.

“There is hope of things changing. Some of our Republican legislators here are behind the 8 Ball, meaning they’re more responsive to constituent pressure, and some aren’t.”

Constituent pressure in Virginia earlier this year blocked a bill that would have stopped municipal broadband development. A campaign to stop that legislation included news stories, editorials, op-eds, and letters to the editor in publications large and small around the state. The campaign also included web and social media. So far, efforts in Missouri and Tennessee have not reached a similar pitch.

National community broadband advocates such as Christopher Mitchell of the Institute for Local Self Reliance who worked recently to de-fang Virginia’s anti-municipal network bill, believe similar activities should occur in Missouri and Tennessee. “It’s essential for people to advocate publicly for local investments in broadband,” he said. “Communities need to enlist volunteers to counterbalance the incumbents because they have all the money in the world. Get citizens to go online to post on Facebook and Twitter, e-mail their legislators, talk to their church groups.”

Craig Settles is a broadband industry analyst, consultant to local governments, and author of “Building the Gigabit City.” He also hosts the Gigbit Nation talk show and writes about key broadband issues.

 

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