Report: Network Bans not Insurmountable

State restrictions on public broadband networks don’t necessarily mean your community can’t build its own public network, says community broadband organizer Craig Settles. But the laws do create unnecessary, and sometimes impossible, hurdles.

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Communities that want to build their own municipal broadband networks don’t necessarily have to wait on a federal court decision before they get started, according to a report from a community broadband proponent.

That’s because state laws that restrict publicly owned networks frequently contain loopholes that, to varrying degrees, allow for community broadband, according to Craig Settles, a community broadband consultant.

From Nebraska’s short-and-sweet ban on public-broadband to Florida’s “minefield” of laws that make it hard to raise money for public broadband, to a somewhat obscure and limited provision in California law, the limitations vary greatly. Groups interested in starting a public network should look at the fine print to make sure they know exactly how and where public broadband is prohibited, Settles says.

Last week the Federal Communications Commission voted to oppose laws in North Carolina and Tennessee that restrict publicly owned networks. Everyone expects the telecommunications industry to challenge the FCC in court, so it may be a while before there’s a definitive answer.

In the meantime, state restrictions that remain on the books may not be a complete roadblock for some types of community-owned networks, Settles said.

There’s a general perception that these laws are outright bans, Settles wrote in a report released earlier this year. But only six of the 21 restrictive states actually ban the networks. And even in some of those states, there are still legal avenues for building a publicly owned broadband network.

“One big surprise uncovered while researching these laws is the depth of belief in many of these states that there are total bans when, in fact, many of the barriers are relatively small or at least manageable for cities willing to put in some hard work,” Settles wrote.

Settles also wrote that rural areas in states with public broadband restrictions were especially vulnerable, because they could wind up with no broadband and only cellular for telephone service.

“Few people are aware of the state‐by‐state stealth campaign by large incumbents [phone companies] to get out from under Carrier of Last Resort (COLR) obligations,” he wrote. “This is a state‐regulation issue, so the national media have given it little coverage, and it is obscure telecom law, so probably not on the radar of local media. However, the issue will loom large in states with anti‐muni network laws.”

EDITOR’S NOTE: Kentucky could be the latest state to eliminate land-line phone regulations for many customers, following this national trend. 

If rural communities lose their traditional phone service and aren’t allowed to build public broadband networks, they would have few options left for communications, Settles said.

Settles looked at the laws in states that limit public entities’ ability to own or operate a broadband network. (Settles counts 21 such states, though we often see the number at 19 or 20 in other reports, because Settles includes a narrow provision in California law as a restriction). Settles sorted these state laws into three groups: if-then laws, minefield laws and total-ban laws.

The If‐Then Laws are fairly straightforward requirements rather than restrictions, and they don’t require communities to jump through too many hoops …. A couple of laws, such as the one in Washington state, are pretty simple. Several states such as Iowa and Colorado require communities to hold referenda: if a ballot measure passes, then the community can build a network. Pennsylvania is one of the states in which communities need to present their broadband wishes to the incumbent [service provider] for the area. If the incumbent won’t build it, then the community can move forward.

Settles says the bigger problem with “if-then” laws is the perception that such laws are an outright ban. In Pennsylvania, for example, only one community has built its own network.

[Minefield laws] create multiple layers of rules that are so onerous as to make compliance a significant financial burden. Or they are worded so vaguely that they become minefields in which one wrong step could trigger incumbents to take legal action. North Carolina and Louisiana are two states with laws of this type. 

The city of Wilson, North Carolina, was one of the municipal broadband networks that petitioned the FCC to rescind the state law.

Total-ban laws are just what they sound like – a complete prohibition on publicly owned networks. “However, there may be loopholes in a couple of state laws that can be exploited,” Settles writes.

While the restrictions aren’t always impossible to overcome, Settles said at the very least they create another set of problems for communities that are already facing obstacles.

Settles believes the long-term solution to state restrictions on public networks is to overturn them in state legislatures and, with the help of the FCC, fight them in courts.

Settles’ report includes a description of each state law restricting public networks and numerous examples of communities that have successfully navigated them.

Not every community could successfully build a public broadband network, even if the restrictions are rescinded, Settles said. But he said states that don’t have such restrictions have been more successful overall in completing last-mile networks.

State legislatures that have enacted restrictions on public networks generally have argued that it is unfair for a public entity to compete with private enterprise to provide a business service. Community broadband proponents, including 400 or so public networks around the country, say that in many cases public networks are the only good option because private enterprise hasn’t served the market.

 

Topics: Ag and Trade
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