Federal Focus On Municipal Builds Rubs Against States’ Policy Opposing Practice: Report

April 8, 2021 – President Joe Biden’s new broadband plan, which emphasizes the importance of municipal-owned networks, is likely to cause tensions with states that have restrictive rules in place against those kinds of builds, according to a new report.

That focus on local networks in Biden’s infrastructure plan, which includes $100 billion for broadband, has some in the telecom industry critical or uneasy, while others are excited about the possibilities.

New federal funding with attached rules prioritizing municipal and co-op networks will likely collide with policy in almost half the country, as shown in a BroadbandNow report released Wednesday that details restrictive legislation that is currently on the books in 18 states and minor “roadblocks” in five other states.

BroadbandNow has monitored municipal broadband for several years, and the methodology for this report was done differently than in the past. “Instead of tallying every state that restricts municipal broadband in some way, we’re looking at those that explicitly bar or make it unreasonably difficult to establish such networks,” it reads.

“The broadband sector has come into the forefront of public discourse, with millions of Americans struggling to stay online amidst the pandemic. In many communities, local governments have turned to creating their own solutions where private competition has not met the needs of the populace,” writes Tyler Cooper, chief editor at BroadbandNow.

“These barriers vary from state to state, but tend to take the form of outright bans on the establishment and/or operation of municipal broadband infrastructure,” the report reads. “As well as bureaucratic obstacles that make it functionally infeasible to create a citywide network.”

The report also found that “five additional states (Iowa, Arkansas, Colorado, Oregon, and Wyoming) have other types of roadblocks in place that make establishing networks more difficult than it needs to be.” Those roadblocks include items like vague legal stipulations, restrictions on certain pricing mechanisms, proposal-stage barriers, phantom cost requirements, and extra tax burdens.

Several states have introduced legislation to reduce those restrictions, including an Arkansas bill that passed in February 2021, a Washington bill still in progress, a Montana bill that failed, and three bills stalled in Tennessee and Idaho, according to the report.

A Republican-led House bill called the CONNECT Act would restrict government-run broadband networks nationwide as long as more than one other broadband service was already available in an area. The bill was introduced on February 18 by Missouri Rep. Billy Long.

In direct opposition to that effort, Biden’s American Jobs Plan would prioritize funding for “broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives,” according to a White House statement.