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Bills In Washington State Legislature Would Allow Public Utility Districts into Retail Broadband

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Photo of Washington State Sen. Lisa Wellman from her website

Though Washington is home to one of the nation’s fastest growing tech hubs, many communities throughout the state lack adequate broadband infrastructure. The stark divide between those Washingtonians with reliable home broadband connections, and those without, became especially salient last year, when many were forced to rely on their home Internet access for work, school, health, socialization, and much more.

A year into the pandemic, it seems lawmakers in Olympia are finally waking up to the connectivity issues currently plaguing the state. In January, bills aiming to advance broadband connectivity by allowing public entities to participate in the retail broadband market were presented in the House and Senate of the Washington State Legislature. The two bills have both cleared their respective chambers, and are waiting to be heard in committees of the opposite legislative chamber.

Discussions surrounding the two bills will continue on March 11th, when Washington’s Senate Energy Committee is set to hold a hearing for House Bill 1336, one of two bills being considered (the other is Senate Bill 5383).

Both bills aim to grant public entities, such as Public Utility Districts and ports, the authority to operate as Internet Service Providers. Currently PUDs and ports can build broadband networks but must offer wholesale access to private ISPs, and are prohibited from offering direct retail services to residents and businesses. The bills being considered now would allow them to deliver Internet access to Washington residents without a charter or third-party business overseeing network management operations.

While the bills are similar, they possess important differences. At the heart of the dispute between the two proposed laws is a preemption clause included in Senate Bill 5383, sponsored by State Sen. Lisa Wellman.

Wellman’s bill gives incredible veto power to private, incumbent ISPs. SB 5383 would change existing state laws to allow PUDs and ports to offer broadband service directly to residents only if they do not “receive notice from the governor’s statewide broadband office that an existing broadband service provider has not submitted an objection.”

SB 5383 would give private companies authority over public entities that want to expand into territory or build in areas where incumbent ISPs claim they plan to expand service within the next six months.

House Bill 1336, sponsored by State Rep. Drew Hansen, does not include such a veto clause. Instead, HB 1336 would grant retail authority to PUDs, ports and municipalities with populations under 10,000 without requiring private third-party network managers or operators. Hansen’s legislation would initiate critical changes to state laws, under which counties and small towns operating without a charter currently lack any authority to provide telecommunications services.

Champions of SB 5383 claim the new law would focus more on rural broadband than Hansen’s legislation. The Senate Bill calls for creating maps that pinpoint underserved areas and targeting these communities with funds and incentives. Yet, SB 5383 does not allow counties or municipalities to provide telecommunications services directly, nor does it allow ports or small towns operating without a charter to provide services directly.

Public-backed vs. Private-backed

While Comcast, small telecom companies, and business lobbyists have supported Wellman’s more limited legislative proposal, PUDs, ports, rural health clinics, the Suquamish Tribe, parents, teachers, broadband activists, and over a thousand citizens who signed up to testify, have rallied behind Hansen’s bill.

Many in the public sector have voiced concerns with SB 5383 and the veto power it gives private telecommunications companies. Some have also criticized Wellman, a former Apple executive, as being a naïve champion employed by for-profit telecom lobbyists.

“The veto provision allowing an ‘existing broadband service provider’ to block a public utility district from providing Internet [access] is anti-competitive and frankly insulting,” said Devin Glaser, Executive Director of Upgrade Seattle.

There are a number of reasons for a local government to provide a utility directly, without waiting for the private sector’s permission, he said, noting how incumbent providers often do not provide service to all residents in a community, have unreasonable pricing, or offer speeds that are insufficient for individuals attempting to work from home.

Objecting to Wellman’s proposal, Glaser maintained that Washington residents deserve a competitive market in the delivery of Internet services. “If the private sector wishes to compete with a public utility district, town, port, or county, they can offer better service or lower prices,” he said.

In the absence of reliable broadband at competitive prices, many PUDs have worked within current state limitations to offer broadband on a wholesale basis, through dark fiber or open access networks. For more on this tune into Episode 316 of the Community Broadband Bits podcast, where Justin Holzgrove of Mason County PUD 3 and Isak Finer from COS Systems discuss how COS Systems is helping the public utility’s strategic deployment approach in Mason County, Washington.

Claims of Overbuilding Are Suspect

Wellman argues that the veto power provided to ISPs by SB 5383 will prevent “overbuilds” and encourage public entities only to build infrastructure where it currently does not exist.

Still, others have contended that the veto clause included in SB 5383 will allow incumbent ISPs too much leverage to convince the Washington Statewide Broadband Office that some community broadband initiatives — aimed at connecting the unserved, creating a more competitive marketplace, and improving end-user experience — classify as “overbuilding”.

The term overbuilding, often used to describe the construction of new, futureproof networks in localities where only one incumbent ISP offers service, has been widely utilized by lobbyists attempting to protect private companies’ monopolies on telecommunications services.

For an in-depth discussion of “overbuilding” and competition, watch or listen to Episode 7 of the Connect This! Show.

In conversation with the Institute for Local Self-Reliance, Laura Loe, Executive Director of Share the Cities, called lobbyists’ utilization of the term overbuilding an “excuse to not allow public entities to eat into private profits,” which echoes a point made more substantively by John Sallet in the recently published report, Broadband For America’s Future [pdf]. In that report, Sallet wrote “what some call ‘overbuilding’ should be called by a more familiar term: competition.”

ILSR’s Director of the Community Broadband Networks initiative Christopher Mitchell voiced concern that SB 5383 will allow an incumbent ISP claiming to offer 100 Mbps service for $150 per month to some residents of an area the ability to veto a PUD attempting to expand gigabit fiber to everyone in a region for a much more reasonable price to end-users. “This ‘right of first refusal’ is counter-productive and poorly constructed,” Mitchell said. “It demonstrates that some lawmakers are more worried about the concerns of deep-pocketed monopolies than the small businesses and residents that desperately need more investment in rural Washington.”

Moving Towards Digital Equity

Discussions surrounding the two bills will continue on March 11th, when Washington’s Senate Energy Committee is set to hold a hearing for HB 1336. Loe considers the hearing scheduled for Thursday an organizational victory for the public sector. According to Loe, who heads a Seattle-based special interest group focused on housing and other tenant rights, it took a month of campaigning before Sen. Reuven Carlyle, a recipient of telecom PAC money, announced he would allow the bill to be heard in the state Senate.

Loe maintained that while HB 1336 will not resolve all of the factors that perpetuate digital inequity, it is critical in overturning Washington’s restrictions on public broadband and a step in the direction towards more universal access to broadband infrastructure.

“This bill isn’t doing anything for digital equity,” reminded Loe. “I don’t want people afterwards to feel tricked when Hansen’s House Bill goes through, and … Washington residents are essentially getting Comcast services again.” This is a big, but important, conflict over access for a comparatively small number of rural residents.

“This bill won’t help an elder access telemedicine; this bill won’t help a student who doesn’t have a laptop,” Loe said, adding a sobering dynamic to the conversation surrounding the legislation.

Loe believes there is confusion on both sides about what HB 1336 will actually do, if enacted.  “HB 1336 is not mandating public broadband,” said Loe. “We would still need to fight on a municipal level” after the law passes, in order to get reliable, affordable broadband to all Washington residents.

Read full text of bills below.

Editor’s Note: This piece was authored by Jericho Casper with the Institute for Local Self Reliance’s Community Broadband Network Initiative. Originally published on MuniNetworks.org, the piece is part of a collaborative reporting effort between Broadband Breakfast and the Community Broadband Networks program at ILSR.

Contributing Reporter Jericho Casper graduated from the University of Virginia studying media policy. She grew up in Newport News in an area heavily impacted by the digital divide and has a passion for universal access and a vendetta against anyone who stands in the way of her getting better broadband.

Open Access

Financing Mechanisms for Community Broadband, Panel 3 at Digital Infrastructure Investment

Panel 3 video. Join the Broadband Breakfast Club to watch the full-length videos from Digital Infrastructure Investment.

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Video from Panel 3 at Digital Infrastructure Investment: Kim McKinley, Chief Marketing Officer, UTOPIA Fiber, Jeff Christensen, President & CEO, EntryPoint Networks, Jane Coffin, Chief Community Officer, Connect Humanity, Robert Wack, former Westminster Common Council President and leader of the Open Access Citywide Fiber Network Initiative, and moderated by Christopher Mitchell, Director, Community Broadband Networks, Institute for Local Self-Reliance

For a free article summarizing the event, see Communities Need Governance Seat on Broadband Builds, Conference Hears: Communities need to be involved in decision-making when it comes to broadband builds, Broadband Breakfast, November 17, 2022

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Open Access

In Video Session, Christopher Mitchell Digs Into Community Ownership and Open Access Networks

The conversation dealt with open access networks, and whether cities are well-suited to play a role in developing them.

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Screenshot of Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance.

September 29, 2022 – Community-owned, open access networks protect communities against irresponsible network operators and stimulate innovation, said Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, at a Broadband.Money Ask Me Anything! event Friday.

“AT&T, Frontier, these companies have a history of failing to meet community needs,” said Mitchell. “If I had a choice between open broadband fixed wireless and fiber from AT&T, I’d be really, you know, checking it out.”

“[AT&T] is a company that will sell your data at the first opportunity, it’s a company that will raise your bill every chance it gets,” Mitchell added.

ILSR’s director said that in communities in which local ownership isn’t possible, such as in a town with a deeply corrupt government, there still exist contractual provisions that can maximize local control.

A right of first refusal, for instance, gives communities the option to purchase their local network if the original provider chooses to sell. Mitchell also suggested communities write performance-based contracts that institute penalties for network partners who fail to meet clearly outlined performance benchmarks.

Conversation entered realm of open access discussion

The wide-ranging conversation also dealt with the issues of open access networks, and whether cities are well-suited to play a role in developing them.

 “The cities are the custodians of their rights of way – they need to be, they must be,” said Drew Clark, editor and publisher of Broadband Breakfast. Because of the cities inherent role as custodians of their rights of way, Clark said that open-access networks provide cities with the opportunity to own the infrastructure portion of their broadband networks, while still offering private companies the ability to serve as network operators or application service providers.

Mitchell agreed that open access networks can be critical to broadband innovation. “We need to have millions – ideally tens of million – of Americans in thriving areas that have open access to kind of see what we can do with networks,” he said.

“Maybe a lot of those ideas won’t work out, but I think we don’t want to foreclose that path.”

In addition to overseeing digital infrastructure projects, communities can promote digital equity by utilizing established, trusted community-based institutions – such as food pantries or faith groups – to boost digital literacy and distribute devices, Mitchell said.

Mitchell added that these efforts must be ongoing: “This is more about building connections now.”

Broadband.Money is a sponsor of Broadband Breakfast.

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Funding

Anticipating Launch, Yellowstone Fiber to Seek Federal Funds for Rural Broadband

With service beginning in late September, non-profit fiber ISP aims to serve rural Gallatin County

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Photo of Greg Metzger in July 2022 from Yellowstone Fiber

BOZEMAN, Montana, July 27, 2022 – Officials at the non-profit internet entity Yellowstone Fiber announced Thursday that they would pursue federal broadband funding to expand network construction in rural areas of its footprint in Montana.

Because every state is poised to receive a minimum of $100 million to expand broadband infrastructure under the bipartisan Infrastructure Investment and Jobs Act, officials at Yellowstone Fiber believe they are well-suited to obtain funding to connect homes, businesses, farms, and ranches to high-speed fiber internet in the sections of the Montana’s Gallatin County north of Bozeman.

Although Yellowstone Fiber is just going live with its first customers in September – and began offering pre-sales in late July – the new fiber entity believes that the availability of funding through the Broadband Equity, Access and Deployment program of IIJA offers a unique opportunity.

As with all states, Montana will receive a minimum of $100 million to expand high-speed broadband infrastructure to the nearly one-third of state residents who currently lack access.

Speaking about the impending launch of services on Yellowstone Fiber, CEO Greg Metzger said, “This is an important milestone for Yellowstone Fiber and we’re enormously excited to announce we’ll have the network live in a matter of weeks.”

“For decades, people in rural Montana have been limited by slow and expensive internet service and empty promises by cable providers. Today’s announcement signals we’re serious about connecting rural Gallatin County to high-speed fiber and the limitless possibilities that it brings,” he said.

Yellowstone Fiber is building an open access network, which means that Yellowstone builds, owns, and operates the fiber infrastructure, then leases space on its high-speed fiber to service providers, including Blackfoot Communications, Skynet Communications, Global Net, TCT and XMission.

In an interview, Metzger touted the role that open access networks play in enabling free market competition, including better prices, service, and reliability.

Metzger, an entrepreneur who previously manufactured plastic deposit bags for banks, sold that business and bought a furniture company in Montana.

Although he said he would rather be playing golf, when he stumbled across a new funding mechanism, he decided to create a non-profit entity designed to serve his community with fiber optic network services.

Yellowstone Fiber was formerly Bozeman Fiber, and was created in 2015 as an economic development initiative to address the lack of true high-speed broadband in Gallatin County, Montana.

A group was formed including the City of Bozeman, Gallatin County, the Bozeman School District and business leaders and funded by eight banks with a Community Reinvestment Act-designated loan.

This $4,000,000 was used to create a fiber ring connecting anchor tenants including the city, county and the school district, and also servicing the Cannery district and downtown Bozeman.

Anchor operations began in the fall of 2016, and commercial operations in February 2017. In 2020, the network formed an operational partnership with Utah-based UTOPIA Fiber to bring fiber-to-the-home services to every address in Gallatin County.

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