Pennsylvania Broadband Authority Sees No Conflict in State Preemption Law and BEAD Rules

January 23, 2024 – Pennsylvania’s broadband authority recently changed its stance on whether a 2004 state law restricting publicly-owned broadband networks will pose a challenge for the state as it prepares to doll out $1.2 billion in federal broadband infrastructure funding.

In the state’s initial Volume 2 draft plan for the Broadband Equity, Access and Deployment grant program,

the broadband authority said to prevent conflict with federal law it would waive state statute that limits the circumstances under which local governments can establish their own internet networks.

Yet, following public input raising doubts regarding the authority’s capacity to override state law, the state broadband authority adopted a different perspective.

The most recent version of the state’s BEAD Volume II draft asserts that current state laws already accommodate federal infrastructure funding law, and as a result “new policies will not need to be developed.”

Under the 2004 state law, local governments are prohibited from offering internet service without first requesting the incumbent landline phone company in the area to provide the service. Only if the company refuses, may the local government proceed.

“Jockeying among industry representatives and advocates over the rules that will govern how the grant money is handed out has intensified,” reports SpotlightPA. “Supporters of publicly-owned broadband have pressured the state to resolve an apparent tension between the aims of the federal infrastructure law and a 2004 state law.”

Sixteen Republican state representatives also signed letters questioning the broadband authority’s ability to waive state law. “We are sure you understand the considerable legal implications of such a statement to bypass legislative intent and authority,” one of the letters said.

Brandon Carson, the executive director of the Pennsylvania Broadband Development Authority, told SpotlightPA that the initial draft’s language was based on federal guidance. But after taking a closer look in light of the public comments, the agency came to a different view. Carson stated that the federal government had not expressed concerns about a potential conflict, and the authority has not engaged in discussions with state lawmakers regarding the potential of removing the restrictions.

Pennsylvania is one of at least 16 states that impose restrictions on how government entities can provide broadband service. Legal restrictions against publicly-owned broadband range from straightforward bans to prohibitory financial restrictions and complicated legal requirements.

States with barriers could potentially see legal battles arise between municipalities, broadband authorities, and state governments over BEAD grant funding opportunities. 

Of states with preemption laws, South Carolina has been the most explicit in conveying that the state broadband authority “may raise any concerns for the consideration of the State General Assembly” regarding legal barriers to public broadband, as specified in the state’s BEAD Five-Year Action Plan.

South Carolina’s action plan firmly restates that the Infrastructure Investment and Jobs Act specifically stipulates that non-traditional broadband providers – including municipalities, political subdivisions, cooperatives, non-profits, Tribal governments, and utilities – are eligible to apply for IIJA-funded broadband grants. The plan further emphasizes that the BEAD program “encourages states to address laws that may restrict BEAD participation from nontraditional applicants.”

The subsequent BEAD Notice of Funding Opportunity goes on to say that “NTIA strongly encourages (states) to waive all such (preemption) laws for purposes of the Program.” 

Still, NTIA officials have already said the agency will not withhold BEAD funds from states that do not remove those barriers. Nevertheless, municipal providers in those states can directly petition the NTIA for funding if they are excluded from the state plan.