Connect with us

Infrastructure

Pandemic Possible Inflection Point in States’ Move Away from Restrictions on Community Networks

The number of states restricting municipal broadband networks has dropped during the pandemic.

Published

2 years ago

on

Photo of Washington Gov. Jay Inslee from June 2019 by Gage Skidmore used with permission

In years past, states have implemented preemptive laws that make it more difficult or impossible for communities to build their own Internet networks.

These state barriers were often enacted at the behest of large telecom monopolies to limit competition, and include everything from outright bans on municipal broadband networks to oppressive restrictions and requirements which create legal uncertainty for communities attempting to offer telecommunications and Internet services, including via partnerships.

When the Covid-19 pandemic hit the United States in March 2020, there were 19 states maintaining significant restrictions on municipal networks. Today, the number of states upholding these barriers has been reduced to 17. The pandemic served as a turning point in the fight for local authority, and in the past year, Arkansas and Washington adopted legislation significantly rolling back legislative barriers on publicly owned broadband networks.

In February of 2021, both chambers of the Republican-dominated Arkansas State Legislature voted unanimously to send Senate Bill 74 to State Governor Asa Hutchinson, who signed the bill into law. The legislation grants government entities the authority to provide broadband services and expands the financing options available to municipalities to fund municipal broadband projects.

In May of 2021, Washington State Governor and Democrat Jay Inslee signed two bills expanding municipal authority to provide retail internet services to end-users, House Bill 1336 and Senate Bill 5383. Both bills reduce barriers to municipal networks, but House Bill 1336, which completely removes all previously-held restrictions on public broadband in the state of Washington, is expected to take legal precedence.

The recent progress made by Arkansas and Washington is extremely timely as more federal, state, and local funding is available to improve broadband infrastructure than ever before. Momentum for municipal broadband is mounting, but there is still a long road to travel to overturn the legal barriers which remain in 17 states.

Advancing, stalling and nearly retreating

Every year, bills aiming to expand the authority of local governments and municipal electric cooperatives to construct broadband networks are introduced in state legislatures. And every year, these bills stall, are withdrawn, and die as a result of the immense lobbying power of the private monopolies. In 2021, state legislators in Idaho, Montana, Missouri, Tennessee, Nebraska, and North Carolina, all introduced legislation to lessen state-held barriers against municipal broadband. Many of these bills died in committee after action on the legislation was indefinitely postponed.

To give an example, legislation (H.B. 422) introduced early on in Montana’s 2021 Legislative Session – which would have allowed the state’s local governments to own and operate community broadband networks – underwent a dramatic twist of fate when dozens of legislators who previously supported the proposal suddenly turned against it, causing the bill to die in a final House vote.

The bill’s sponsor, Democratic State Rep. Kelly Kortum, told the Daily Montanan that he attributes its failure to 11th-hour lobbying efforts of incumbent telecommunications companies in Montana, which he believes were caught off guard by the vast support the bill initially received.  “I expected it to fail on the House floor. It didn’t, and then the lobbying really began,” Kortum said.

Next door, in Idaho, it has been a cable monopoly and local telephone companies that have pushed hard against municipal open access approaches that would create robust competition. In largely rural states, some local telephone companies are deeply afraid of competing in an actual marketplace.

Many states preserved previously-established barriers throughout 2021, but one state, Ohio, nearly became the first state in a decade to erect new barriers to the establishment and expansion of municipal broadband networks.

In June, the Ohio Senate included an amendment that effectively banned the creation of municipal broadband networks in its two-year, $75-billion budget bill. Thankfully, after local officials, community broadband advocates, and angry residents and businesses from across the state spoke out against it, the anonymously-added amendment was removed from the budget. The governor and lieutenant governor, both Republicans, spoke out against these limits on municipal broadband.

While some state legislators are working tirelessly to reduce barriers to municipal broadband, the largest ISPs are able to use their outsized influence and cash reserves to block legislation that would undermine their control over the broadband marketplace. “In the 116th Congress alone, these corporations spent an astounding $234 million on lobbying and federal elections,” reports Common Cause and the Communications Workers of America, in a recent study, Broadband Gatekeepers: How ISP Lobbying and Political Influence Shapes the Digital Divide.

A partisan issue on the federal level

The Biden administration’s American Jobs Plan centered on bolstering nonprofit, municipal, and cooperative models to develop high-speed broadband infrastructure nationwide. Unfortunately, in the sausage-making, the focus on community broadband networks was dropped and outspoken federal support for municipal networks largely quieted as the monopoly lobbyists descended on Congress and the White House.

This is representative of a disconnect that exists between congressional Republicans and Republican officials on the local and state level. While expanding local internet choice is an overwhelmingly bipartisan issue at the local level, it is a highly partisan issue in Congress.

For example, in the same month that the Republican-dominated Arkansas State Legislature removed restrictions on municipal broadband, Congressional Republicans introduced a bill package attempting to ban communities from constructing their own networks and engaging in public-private partnerships nationwide.

Meanwhile, congressional Democrats have pushed to preempt states from enacting or enforcing laws that restrict municipalities from building and operating broadband networks. In March, congressional Democrats introduced the Community Broadband Act, which would prohibit banning or limiting the ability of any state, regional, or local governments to build broadband networks and provide Internet services. However, the Democrats were ultimately not united in pushing that language into the infrastructure bill.

A web of legal barriers

Common approaches to preempting municipal broadband networks range from straightforward bans to confusing financial restrictions and complicated legal requirements. While some states have established one main barrier to community broadband, many more have adopted a web of regulations that kill any possibility of municipal connectivity, if only because of the legal uncertainty created by complex and vague laws.

Out of the 17 states with restrictions on municipal networks, a few explicitly ban local governments from providing communications services to their citizens. In Nevada, only municipalities with less than 25,000 people and counties with less than 55,000 people can offer telecommunications services. Tennessee bars municipalities without electric utilities from providing Internet access in most situations. Local governments in Missouri and Texas are limited to offering Internet access and no other telecommunications services. Montana and Pennsylvania state laws permit municipal networks, but only in unserved communities, with vague definitions of what that means.

In states that don’t expressly forbid municipal networks, state legislatures can still establish legal roadblocks that deter investment in community broadband networks. One of the strongest examples of this is North Carolina, where an array of burdensome restrictions and requirements “collectively have the practical effect of impairing public communications initiatives,” according to the Coalition for Local Internet Choice [pdf].

Other states, including Virginia, Florida, and South Carolina, require that municipal networks impute private sector costs, pay additional taxes, set excessively high prices, and/or refrain from subsidizing affordable service, in the name of protecting private “competition.” In other states, legislators have established stringent procedural requirements, including a prescribed bidding process in Michigan and community referenda in Alabama and Minnesota.

To learn more

To learn more about the legislative bans states maintain, check out this resource [pdf], maintained by the Coalition for Local Internet Choice (CLIC), which summarizes state barriers to public broadband as of July 2021.

CLIC’s list is focused on a more legalistic look at state barriers and still includes Washington and Arkansas, while they see how the law settles. The Institute for Local Self Reliance focuses on the 17 states where state limits significantly restrain municipal broadband networks and partnerships, while agreeing with CLIC that additional states have barriers that can also discourage investment.

Editor’s Note: This piece was authored by Jericho Casper, a reporter for the Institute for Local Self Reliance’s Community Broadband Network Initiative. Originally appearing at MuniNetworks.org on September 15, 2021, the piece is republished with permission.

Related Topics:

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.

Continue Reading
Click to comment

Leave a Reply

Funding

Treasury Announces New Compliance Obligations for Broadband Grants

The Treasury announced a proposal to revise broadband grant compliance obligations Tuesday.

Published

49 mins ago

on

March 31, 2023

By

Photo of Brooke Coleman of Widelity

WASHINGTON, March 31, 2023 – The Treasury Department announced Tuesday new proposed guidance for compliance obligations for recipients of grant money issued through the American Rescue Plan Act’s State and Local Fiscal Recovery Fund and Capital Projects Fund. 

Recipients of any federal grant must be compliant with a series of laws most commonly referred to as the Uniform Guidance, found in Title 2, Section 200 of the Code of Federal Regulations, or sometimes merely referred to as “Part 200.” The law specifies how recipients should manage federal funds, including the reporting and auditing of those funds. 

However, in response to broadband industry concerns that such obligations would increase program costs, the Treasury issued a proposed new guidance in which recipients of CPF and SLFRF may differ from the Uniform Guidance.  

“Bringing those [Uniform Guidance] rules to reality is challenging and not possible in some cases, at least in the broadband space,” said Brooke Coleman from network engineering consulting company Widelity at a Broadband Breakfast Live Online Event Wednesday. “The guidance will provide additional flexibility for the applicants and for the program to make it more of a reality.” 

Brooke Coleman of Widelity

The proposed guidance specifies different compliance rules applicable to an internet service provider based on whether the ISP is a subrecipient of the award or a contractor. The Uniform Guidance provides guidelines for whether recipients should consider separate entities as contractors or subrecipients. 

“Each recipient should make this determination based on the nature of the broadband program it has established and its relationship with the ISPs,” read the proposed guidance.  

Proposed rule changes 

Under the default Part 200 rules, recipients are required to use program income to offset total allowable costs and reduce the Federal award and non-Federal entity contributions. Program income refers to any income stemming from grant-funded programs and would include any revenue from the end user to the ISP.  

The proposed guidance specifies that any income generated by a subrecipient ISP will not be considered program income. A contracted ISP can also be permitted to retain its income, per the decision of the recipient.   

Furthermore, the guidance states that all subrecipients to awards must follow procurement rules and cost principles. These rules would require that all recipients must first issue a procurement for contracts out to bid before deciding on a contractor.  

Because many recipients have established relationships with their ISPs, this rule could pose problems for procurement and potentially introduce more costs to deployment. The Treasury’s proposed guidance would relieve recipients and subrecipients of a fixed amount of this requirement but would retain the requirement for contracted ISPs. 

Additional rule changes include project property ownership and auditing requirements. 

Under the proposed guidance, ownership of the property may be transferred to the ISP under certain conditions. These conditions include participating in federal subsidizing programs for low-income households, using the property for authorized project scope, and continuing to provide internet connection at the agreed upon speed.  

Audit requirements will also differ under the proposed guidance. Recipients will be required to oversee contractors in place of audits to ensure that the contractors perform in accordance with agreed upon terms. However, subrecipients are still required, as specified in the Uniform Guidance, to submit audits to the Federal Audit Clearinghouse, the government-wide auditor for federal grant programs. 

Experts at a Broadband Breakfast Live Online panel Wednesday are hopeful that the Treasury’s guidance given for the CPF and SLFRF programs sets a precedent for providing further guidance for other federal broadband programs, like the $42.5 billion Broadband Equity Access and Deployment program.  

Comments to the Treasury regarding the proposed guidance may be submitted by April 11. Recipients may not implement Treasury guidance until the rules are finalized. 

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, March 29, 2023, 12 Noon ET – Cost-Sharing and Other Compliance Requirements for Broadband Deployment

One key factor in the $42.5 Broadband Equity, Access and Deployment program is the matching requirement: Subgrantees must find matching funds of at least 25 percent of the total project cost. Matching funds can be provided by local governments, utility companies, nonprofit organizations and other entities. In addition, states are required to incentivize higher matches whenever possible. How should state broadband offices approach cost-sharing and other compliance requirements as they prepare for broadband deployment?

Panelists

  • Carol Mattey, Principal, Mattey Consulting LLC
  • Brooke Coleman, Senior Manager of Business Development, Widelity
  • Jorge Fuenzalida, Managing Partner, JLA Advisors
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Carol Mattey, founder of Mattey Consulting LLC, has over 30 years of experience as a senior executive in the U.S. government, consultant and lawyer focusing on communications public policy. From 2010 to 2017, Carol was Deputy Chief of the Wireline Competition Bureau at the Federal Communications Commission, focusing on the FCC’s ongoing initiatives to reform over $9 billion in annual federal spending known as the Universal Service Fund, which supports broadband connectivity for rural areas, schools, libraries, healthcare providers and low-income consumers. She led the development and implementation of the Connect America Fund to extend broadband to unserved areas in the United States. After leaving the FCC in 2017, Ms. Mattey formed a consulting practice that focuses on government funding strategy and execution, public policy advocacy, and regulatory compliance

Brooke Coleman is the Senior Manager of the Business Development division of Widelity’s Compliance Team. Her expertise lies in federal and state grant programs, specializing in broadband programs created by multiple government acts, such as the American Rescue Plan, IIJA, and more. With a background and Master’s Degree in Instructional Practice, her unique perspective aids clients in accessing the money that they need for underserved and unserved communities in need of broadband assistance.

Jorge Fuenzalida is a Managing Partner of JLA Advisors and has more than 25 years of telecommunications experience directing projects for wireless and wireline telecommunications carriers, equipment manufacturers, cable MSOs, and private equity companies in areas of wireless technology, corporate strategy, and wireless solutions. Prior to joining JLA, Jorge was Head of Strategy & Planning for Ericsson’s Digital Services unit in North America, and previously vice president and general manager of inCode Consulting (division of Ericsson Inc.).

Drew Clark (moderator) is CEO of Breakfast Media LLC. He has led the Broadband Breakfast community since 2008. An early proponent of better broadband, better lives, he initially founded the Broadband Census crowdsourcing campaign for broadband data. As Editor and Publisher, Clark presides over the leading media company advocating for higher-capacity internet everywhere through topical, timely and intelligent coverage. Clark also served as head of the Partnership for a Connected Illinois, a state broadband initiative.

Graphic from Adobe Stock used with permission

WATCH HERE, or on YouTube, Twitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTube, Twitter and Facebook.

See a complete list of upcoming and past Broadband Breakfast Live Online events.

Continue Reading

Funding

Growing Investment in Digital Infrastructure, Especially Fiber: Connected America Conference

As providers attempt to expand their fiber footprints, some are turning to open access networks.

Published

20 hours ago

on

March 30, 2023

By

Photo of panelists at Connected America 2023

DALLAS, March 30, 2023 — Private sector investment continues to play a key role in supporting and shaping digital infrastructure development, as the increasing demand for high-speed connectivity clashes with industry-wide economic challenges, experts said Wednesday at Connected America.

“Despite a possible recession… it doesn’t feel like there is a slowdown in the need for digital infrastructure,” said Jennifer Fritzsche, managing director at Greenhill & Co.

While this infrastructure comes in many different forms, Fritzsche said that she was seeing particularly fast growth in data centers. “There’s been tremendous need for more capital there.”

Fritzsche also emphasized the growing demand and competition for fiber, calling it the “lifeblood” of future networks. “A lot of people are leaning in here, and I think that’s created a more challenging environment in the fiber-to-the-home space,” Fritzsche said.

As several providers aggressively attempt to expand their fiber footprints, some are turning to open access networks. The use of shared infrastructure “opens up an interesting model for competition, but it also makes it very difficult for anybody to really get a good, solid return,” argued David Rottmayer, telecommunications expert and host of the “Let’s Talk Telecom” podcast.

In December, AT&T announced a plan to bring fiber to 1.5 million customer locations outside its existing footprint, utilizing an open access platform. The outcome of this “1.5 million test” may influence other providers to either embrace or avoid similar models, said William Dauska, managing director at Citizens Capital Markets.

In response to the growing popularity of fiber, incumbent telecommunications and cable providers are investing heavily in advertising and sales, said Steve Lee, founder and managing director of Layer 7 Capital.

“Fixed wireless is becoming a real thing,” Lee said. “These carriers are being really focused on 5G as an alternative to FTTH, and I think you’re going to see a lot more of that in the new future.”

Fritzche countered that while fixed wireless may be the “here and now,” the rapid growth of fiber adoption means that major providers will have to be very careful in maintaining the same standard of service for existing wireless customers.

“I tend to think fiber is always the preferred solution, especially as you see the consumption that’s happening,” she said. “I do think there’s a place for fixed wireless, LEOs, satellite, but it’s probably not in the areas that are consuming the most demand.”

Across different types of infrastructure, Rottmayer pointed to high interest rates and government grant programs as two factors potentially hindering private sector investment. The grant programs tend to favor incumbents with an established base, he said, which poses a challenge for startup entities.

Continue Reading

Broadband Mapping & Data

Altice Disputing Locations New York Claims is Underserved in FCC Broadband Map

New York filed 31,000 location challenges against the FCC’s mapping data.

Published

1 day ago

on

March 30, 2023

By

Photo of Altice CEO Dennis Matthew from the company

WASHINGTON, March 30, 2023 – Internet service provider Altice USA is challenging claims by the state of New York that its fixed broadband maps are inaccurate, according to a company letter to the Federal Communications Commission.

New York was one of the earliest challengers of the accuracy of the Federal Communications Commission’s preliminary broadband data fabric, which includes service provider data and constitutes the foundation of the commission’s broadband availability map. The state, which created its own map in anticipation of having to challenge the federal data, claimed that there were 31,500 missing locations in the first version of the fabric before the map’s preliminary release in November.

On Monday, Altice filed to the FCC a request for confidentiality in anticipation of submitting data it said challenges the state’s contentions. The FCC allows for challenges to its fabric, including allowing the provider to dispute a challenge by providing evidence that it serves or could and is willing to serve the location being contested.

“In response to a bulk challenge filed by the Empire State Development Corporation, Altice is submitting lists of location IDs where the company has previously provided service, where the company currently provides service to an active subscriber, and where the company could and is willing to provide service,” Altice said in its letter to the FCC.

“Altice is also submitting a supporting affidavit that includes information regarding the number of challenged locations that Altice currently serves or formerly served,” it added.

Broadband Breakfast reached out to Altice’s communications representatives about how many locations it’s challenging and did not hear back in time for publishing.

FCC Chairwoman Jessica Rosenworcel said last week the commission added nearly three million locations – one million net new locations – and has “largely completed” the second version of the map fabric. The commission releases updated maps every six months.

The map will be used by the National Telecommunications and Information Administration to deliver to the states the $42.5 billion in broadband infrastructure funds from its Broadband Equity, Access and Deployment program. Fewer underserved locations in a state will mean less BEAD funding.

Continue Reading

Signup for Broadband Breakfast News



Broadband Breakfast Research Partner

BroadbandNow: Internet Provider Search and research on the digital divide

Trending