Should Congress Act on Anti-Municipal Broadband Legislation?

 

This week Congresswoman Chellie Pingree (D-Maine) signed on to cosponsor H.R 4814, a bill that would prohibit states from passing laws impeding the construction of municipal broadband networks (anti-municipal broadband laws). Such laws currently exist in 20 states, and can make it significantly harder, if not impossible, for local governments to make direct investments in broadband infrastructure.

Access to the Internet is the most significant economic enabler of our time.  Broadband access enhances access to education, healthcare, and economic opportunity. Its importance is so clear to economic development professionals that many towns are choosing to build their own broadband networks or provide TIFs and other incentives to their local carriers in order to encourage their construction.  These towns see broadband Internet access as a key competitive advantage.  They know it will be easier to bring businesses and skilled workforces to their communities if they have high speed broadband access.

anti-municipal broadband map

A state law that prevents a town from taking action to advance broadband access, likewise, puts a community at a significant economic disadvantage as compared to similarly situated communities in neighboring states. This makes municipal broadband very much an issue of digital equity – one that hits home for us, since two of our home states, Alabama and Missouri have restrictive laws.

Interestingly, the companies that make up the OTELCO family and many others around the country were founded, built, and paid for by local farmers and businessmen in the late 1800s when private industry couldn’t make a business case to build telephone infrastructure in rural areas. What would these communities look like today if the federal government made it illegal for those farmers and businessmen to build that, then state-of-the-art, communication infrastructure?

Why States Pass Anti-Municipal Broadband Laws

Proponents of anti-municipal broadband laws take the paternalistic view that the states need to protect taxpayers, and the municipalities themselves from the investment risk should the network fail to attract enough subscribers to be self-sustaining.  While this does happen from time to time, many municipal networks are profitable.  In addition, a simple “profit and loss” calculation doesn’t always paint the whole picture for a community, which is equally interested in attracting and retaining businesses and homeowners.

Community Broadband opponents also point out that municipalities don’t necessarily have prior experience building and operating telecommunications networks – an observation that, while true in most cases, completely ignores the fact that towns usually contract with an experienced provider or providers to operate the network and serve customers. Leverett MA is a great example where OTELCO serves as the ISP and handles all customer facing functions, and Holyoke Gas and Electric is the network operator and manages the physical network infrastructure maintenance and operation.

At the end of the day, it really comes down to whether or not you believe the government should make direct investments in infrastructure or leave those investments to private industry, even in cases where private industry is not actively investing in the community.

States Taking a Different Approach

Fiber TownWhile some states are moving to restrict municipal networks, others are encouraging local action to improve broadband availability in unserved and rural areas. For example Maine has a provision for the ConnectME Authority to award planning grants and infrastructure grants to communities planning to build their own broadband networks.  Massachusetts also set aside $40 million for communities to pursue broadband solutions, although it did encourage them to work with established providers on their projects.

These investments by State governments are encouraging local investment by communities and by private industry.  Massachusetts currently has several projects underway in its Western Hill Towns, and Maine has several towns conducting feasibility studies.  In many cases, networks are being built in towns that have no Cable TV and very limited DSL – networks that might not otherwise have been built.

Congress Could Level the Playing Field

The current environment has already created digital “haves” and “have-nots,” particularly in rural areas.  The divergent paths of the states will perpetuate rural “have-nots” in some states, while states that are investing close the gap more quickly. A law that removes barriers to local investment would put the power to act in the hands of those most effected by the lack of commercial investment, and put rural Alabama on a level playing field with rural Massachusetts for Internet commerce, educations and jobs.