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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.

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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 IdahoMontanaMissouriTennesseeNebraska, 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 Kortumtold 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.

Former Assistant Editor 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. She has a passion for universal access and a vendetta against anyone who stands in the way of her getting better broadband. She is now Associate Broadband Researcher at the Institute for Local Self Reliance's Community Broadband Network Initiative.

Infrastructure

With State Plan and Federal Funds, California in Good Position to Close Digital Divide

Ernesto Falcon of the EFF says the state’s current plans, assisted by the IIJA, will connect everyone in the state.

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Ernesto Falcon, senior legislative counsel at the Electronic Frontier Foundation

WASHINGTON, January 25, 2022 – California’s current expansion plans plus federal infrastructure funding puts the state’s efforts to close the digital divide in a good position, counsel at the Electronic Frontier Foundation said Wednesday.

Ernesto Falcon, senior legislative counsel at fiber-access nonprofit the Electronic Frontier Foundation, said on a Fiber for Breakfast event hosted by the Fiber Broadband Association that new money from the Infrastructure Investment and Jobs Act will help it focus its efforts on providing access to unserved individuals and work more to improve broadband speeds for those who have access to less than 25 Megabits per second download and 3 Mbps upload – considered underserved.

Falcon remarked that California is making sure to place fiber infrastructure in urban markets rather than just focusing on rural markets – a common mistake made, he said, due to the perception that rural areas are in need of much less connectivity improvement than urban ones.

At the present, urban Los Angeles County is “contemplating how to deliver universal fiber,” he said. And at the same time, certain organizations are working to ensure rural areas do continue to receive sufficient focus, such as joint powers authority Golden State Connect Authority.

Much of California’s broadband policy is guided by its state broadband infrastructure law. Key pillars of the law to the state’s connectivity mission include authorizing the California Public Utilities Commission to help communities develop grants and feasibility studies, and to deploy both rural and urban exchange points through a middle mile fiber network.

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FCC

Federal Communications Commission Implements Rules for Affordable Connectivity Program

The agency implemented new rules on the Affordable Connectivity Program, which makes a new subsidy permanent.

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Photo of Jessica Rosenworcel by Rob Kunzig of Morning Consult

WASHINGTON, January 24, 2022 – The Federal Communications Commission adopted rules Friday for its Affordable Connectivity Program that changes and, in some cases narrows, the eligibility requirements for the subsidy to allow for more households to be connected.

An extension of the former Emergency Broadband Benefit Program, which offered discounts to broadband service providers to subsidize connectivity and devices, the new program will make it easier for providers to get in the program by automatically making eligible providers in good standing.

Additionally, the FCC maintains that the monthly discount on broadband service is limited to one internet discount per household rather than allowing the benefit for separate members of a household. “Adopting a one-per-household limitation best ensures that Program funding is available to the largest possible number of eligible households,” the agency said in its report.

To accommodate the volume of eligible households enrolling in the ACP, the FCC allowed providers until March 22 – 60 days after its Friday order is published in the Federal Register– to make necessary changes to ensure that the ACP can be applied to providers’ currently sold plans.

“So much of our day to day—work, education, healthcare and more—has migrated online. As a result, it’s more apparent than ever before that broadband is no longer nice-to-have, it’s need-to-have, for everyone, everywhere,” said FCC Chairwoman Jessica Rosenworcel. “But there are far too many households across the country that are wrestling with how to pay for gas and groceries and also keep up with the broadband bill. This program, like its predecessor, can make a meaningful difference.”

The Infrastructure Investment and Jobs Act transformed the EBB to the longer-term Affordable Connectivity Program by allocating an additional $14.2 billion to it.

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Funding

Infrastructure Bill Brings New Focus on Decision Making at Community Level

Funneling of infrastructure funds through states differs from Obama-era broadband programs.

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WASHINGTON, January 24, 2022 – Community broadband advocates say the ability for local governments to decide what can be done with broadband money from the recently-enacted Infrastructure Investment and Jobs Act is the best way to manage federal funds for broadband expansion efforts.

During a Broadband Breakfast Live Online event on Wednesday, leaders at community broadband advocacy group Institute for Local Self-Reliance said this sets up a local community-based approach to connectivity, bypassing some of the issues with the Federal Communications Commission’s limited broadband maps.

Sean Gonsalves, a senior reporter, editor and researcher at the ILSR, said that local communities are the best source of information on where within their boundaries there are connectivity issues – far surpassing the knowledge of the FCC’s maps.

The infrastructure legislation, which became law in November, will provide a minimum of $100 million to each of the states to use toward broadband expansion. The states that have applied for American Rescue Plan money now have heaps of cash to work with fully connected their boundaries with high-speed internet.

Christopher Mitchell, director of the ILSR, said Wednesday that for many states the law “may solve almost all their rural broadband problems.”

Local approaches may also make it easier to hold accountable officials who do not effectively spend IIJA funds, Mitchell said, adding that was one component of the law that was missing from the FCC’s Rural Digital Opportunity Fund.

Broadband Breakfast Editor and Publisher Drew Clark stated that the law’s structure of funneling money through states is noteworthy, as the notion of responsibility for individual states to enforce policy has long been a “conservative talking point.”

The panel noted that like RDOF, the Broadband Technology Opportunities Program from Barack Obama’s presidency also differed from the IIJA in that it did not rely on individual states to dispense funds.

Mitchell attributes these differences in the IIJA in part to general trends toward decentralization in policy.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the January 19, 2022, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.

Wednesday, January 19, 2022, 12 Noon ET — The Community Broadband Network Approach to Infrastructure Funding

Community broadband networks will play a crucial role in the implementation of the Infrastructure, Investment and Jobs Act, particularly the Broadband Equity, Access and Deployment program, and the Digital Equity Act. This vital session of Broadband Breakfast Live Online will bring our friends from MuniNetworks.org, the Community Broadband Networks Initiative of the Institute for Local Self Reliance, to discuss the issues, trends and concerns they are following. What open questions remain about the IIJA rules? How do the Treasury Department’s rules on the State & Local Fiscal Recovery Funds program interact with the IIJA program? What concerns should community networks have about the next stages of federal funding in their states?

Panelists for this Broadband Breakfast Live Online session:

  • DeAnne Cuellar, Community Broadband Outreach Team Lead, ILSR’s Community Broadband Network Initiative
  • Sean Gonsalves, Senior Reporter, Editor and Researcher, ILSR’s Community Broadband Network Initiative
  • Ry Marcattilio-McCracken, Senior Researcher, ILSR’s Community Broadband Network Initiative
  • Christopher Mitchell, Director, ILSR’s Community Broadband Network Initiative
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Please note: Our event on “State Broadband Officials and the Broadband Infrastructure Surge” has been moved to February 16, 2022.

Panelist resources:

DeAnne Cuellar is a tech equity advocate and communications strategist from San Antonio, Texas. She served as Mayor Ron Nirenberg’s digital inclusion appointee to the City of San Antonio’s Innovation & Technology Committee, resulting in several policy and funding priorities to close the digital divide. As a social impact entrepreneur, she co-founded several cross-sector nonprofit initiatives, advocating for justice, equity, diversity, and inclusion for historically underrepresented communities.

Sean Gonsalves is a longtime former reporter, columnist, and news editor with the Cape Cod Times. He is also a former nationally syndicated columnist in 22 newspapers, including the Oakland Tribune, Kansas City Star and Seattle Post-Intelligencer. His work has also appeared in the Boston Globe, USA Today, the Washington Post and the International Herald-Tribune. Sean joined the Institute for Local Self Reliance staff in October 2020 as a senior reporter, editor and researcher for ILSR’s Community Broadband Network Initiative.

Ry Marcattilio-McCracken is Senior Researcher with the Institute for Local Self-Reliance’s Community Broadband Networks Initiative. He is interested in the democratizing power of technology, systems engineering, and the history of science, technology, and medicine. Previously, Ry worked as an Adjunct Professor of American History in Oklahoma, Rhode Island, and Minnesota. Ry holds a Ph.D. in American History from Oklahoma State University.

Christopher Mitchell is the Director of the Community Broadband Networks Initiative with the Institute for Local Self-Reliance in Minneapolis. Mitchell, a leading national expert on community networks, Internet access, and local broadband policies, built MuniNetworks.org, the comprehensive online clearinghouse of information about local government policies to improve Internet access. Its interactive community broadband network map tracks more than 600 such networks. He also hosts audio and video shows online, including Community Broadband Bits and Connect This!, and Public Knowledge presented Christopher with its Internet Protocol award in 2021, which honors those who have made significant contributions to Internet policy.

Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Drew brings experts and practitioners together to advance the benefits provided by broadband. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative, the Partnership for a Connected Illinois. He is also the President of the Rural Telecommunications Congress.

WATCH HERE, or on YouTubeTwitter 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 YouTubeTwitter and Facebook

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

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