Municipal Broadband War Moves to State Legislatures

Municipal broadband tensions flared in state legislatures as sessions got underway this month. Lawmakers in multiple states have introduced or said they will propose bills -- either to restrict or promote local networks. Community broadband supporters said in interviews this week they expect more. One bill in Virginia to reign in local governments peaked tensions between communities and tech heavyweights. Also this month, a Missouri lawmaker proposed increased state restrictions, and Colorado legislators introduced a repeal of an existing ban. Community broadband supporters predict legislative activity this year in North Carolina and Tennessee, states affected by the FCC loss at the U.S. Court of Appeals for the 6th Circuit.

“It’s all about the states right now,” said Craig Settles, industry analyst and community broadband supporter. The state legislatures are closer to the situation than Washington, and the “corporatist” new administration isn’t likely to favor community broadband, said Settles, predicting “vigorous outpouring” on both sides.

It could be tough to change state laws for many years, said Institute for Local Self-Reliance Community Broadband Networks Policy Director Christopher Mitchell. He believes the public largely supports municipal broadband, he said, but “there’s not enough popular interest to overcome incumbent power in the legislature.” Even so, he predicted more communities will find alternative models to work around existing restrictions.

Some see merits to state restrictions, which incumbent ISPs tend to support. “There are a lot of folks out there that see municipal broadband as a panacea” and open-access dark fiber as “the long-term solution for broadband,” said Doug Brake, telecom policy analyst for the Information Technology and Innovation Foundation. “We would much rather see long-term dynamic competition of different forms of technology.”

Virginia

Facing threat of veto and condemnation from multiple city councils, tech companies and community broadband advocates, Virginia House Delegate Kathy Byron (R) Wednesday floated a substitute amendment to her HB-2108.

The first draft of the Virginia bill drew “incredible condemnation” that likely surprised its sponsor, Mitchell said: Community broadband advocates are reaching out to explain their objections, but “the challenge is that her bill comes out and says we’re going to saw off your legs at the hip.” There isn’t much desire for muni broadband supporters to negotiate with Byron on a bill that looks like a “handout” to incumbents, he said.

The substitute amendment says localities would get no Freedom of Information Act exemptions “based on confidential proprietary records, trade secrets, or working papers” related to planning or providing broadband services. It would ban localities from holding closed meetings about providing broadband services. It would set rules for how a locality may price the service. And it would establish a mechanism to bring lawsuits against localities that don’t comply with the proposed law.

The House Commerce and Labor Committee planned to have heard the amendment at a meeting Thursday, but opponents continued to protest the bill even with the changes and before the meeting the committee postponed hearing on the item until Feb. 2. "Some additional amendments have been requested by interested parties," a committee spokesman said. One advocacy group -- Friends of Municipal Broadband -- sent an email alert Wednesday urging communities to testify Thursday: “Bring copies of any formal resolutions, letters of objection, and similar that you can use to help make our case.”

Forcing municipal networks to share trade secrets would advantage private ISPs, which don’t have to do the same, Mitchell said. The amended bill’s pricing limits would prevent local governments from responding to short-term deals from ISPs, he said, and it would leave local governments vulnerable to lawsuits. “This is nonsense designed to make it all but impossible for municipal networks to meet the needs of their businesses and residents that have [been] ignored by the industry forces that wrote this law.” The Virginia Cable Telecommunications Association -- which includes Charter Communications, Comcast and Cox -- supported the initial bill, said Wednesday it was studying the substitute, and didn’t comment Thursday.

Virginia has some broadband restrictions, but communities figured out how to work within them, Settles said. While technically Virginia localities can’t provide broadband themselves under current law, they have been able to work around it by setting up broadband authorities, he said. Supporters of the new Virginia legislation seek to close those loopholes, he said.

The Roanoke City Council condemned the original Byron bill in a resolution passed Jan. 17, saying the legislation threatened the Roanoke Valley Broadband Authority. The original version restricted localities from building in any area where at least one private ISP serves 10/1 Mbps, speeds “nowhere near a high enough threshold to meet enterprise customer needs and attract new economic development to the state,” Roanoke City Councilmember Raphael Ferris emailed Monday. Byron later stripped that condition, but Ferris emailed Wednesday that he still had reservations. “It is not as bad as the previous version, but it is still bad," he said. "Many of its provisions are already sufficiently covered by Virginia law on Authorities in general, but tailored to favor the legacy carriers in ways not provided for by regulations applicable to other authorities.”

The Alexandria IT Commission slammed the bill in a Thursday letter. “This dooms our communities to economic stagnation,” wrote Commission Chairman Phillip Acosta. Tech companies and associations -- including Google, NATOA, Netflix, Nokia and the Telecommunications Industry Association -- also condemned the initial Virginia bill in a Jan. 19 letter to House Commerce and Labor Committee Chairman Terry Kilgore. Gov. Terry McAuliffe (D) threatened to veto the initial bill, reported The Roanoke Times. His office didn’t comment, nor did Byron.

Missouri

A Missouri bill by state Sen. Ed Emery (R) would prohibit local governments from offering competitive services, including retail and wholesale models, unless the community releases a public feasibility study and voters allow it.

The bill hasn't attracted the same level of controversy as the Virginia bill, but is also dangerous for communities, said Mitchell. It's the latest in a yearly attempt to limit Missouri broadband investment to only a few industry players, he said. “Every year it comes close” to passing, he said.

The same group of tech companies and associations that rejected the Virginia bill also signed joint opposition to the Missouri bill. “SB 186 would amount to a virtual ban on local choice,” they said in a Jan. 23 letter to Missouri Senate Local Government and Elections Committee Chairman Dan Hegeman. The bill is identical to one from last year, “which did not pass after extensive analysis and discussion exposed its deep flaws,” they wrote. Emery didn’t comment.

It's not unreasonable to require localities to do feasibility studies, countered Brake. Deploying broadband is “a serious undertaking,” he said.

Colorado

Not all legislation seeks to restrict broadband. Colorado Democratic state Sen. Kerry Donovan and Senate Minority Leader Lucía Guzmán introduced SB-42 to repeal broadband restrictions passed in 2005. Many communities voted in November and previous elections to opt out of the 2005 statute known as Senate Bill 152 (see 1611090024), but SB-42 aims to remove the law.

The bill could get a hearing in early February, Colorado Counties Inc. Policy Director Eric Bergman told us. CCI, representing county commissioners, developed the bill. The success of the opt-out ballot votes shows the restrictions are ripe for repeal, he said. Communities may have a way out, but ballot votes are a “waste of time and resources,” he said. Counties hold votes once a year, but waiting for November can cause unnecessary delay, he said. The legislators didn’t comment.

It’s the third time that state legislators have tried to repeal the law, but this year it's pared back to a straight repeal of SB-152. The telecom industry probably won’t support a straight repeal of the old law, and that could keep the legislation from moving forward, said Colorado Municipal League Deputy Director Kevin Bommer. But the league still supports the bill, he said. “If it doesn’t make it through, we haven’t lost anything.”

The risk of unintended new restrictions​ worries some advocates, who see the existing system of opt-out votes as not ideal but manageable. “The possibility that you can make a passable situation very bleak in a hurry” may be reason to continue working within the ban rather than repeal it, said Settles. Mitchell said he worries legislative negotiations could inadvertently lead to ISPs winning new restrictions. Bergman said the bill sponsors committed to fighting any such amendments: “This is not going to fix everything. But it’s one step.”

North Carolina, Tennessee

Community broadband advocates predicted legislative activity this year in the two states where a federal court last year upheld state bans on expanding government-run broadband outside their municipal boundaries.

North Carolina Rep. Susan Martin and Sen. Harry Brown last year pledged to save the town of Pinetops, which got fiber service from the adjacent city of Wilson after the FCC pre-empted the state ban and expansion was briefly legal. Community broadband advocates saw Democratic Gov. Roy Cooper's win over Republican incumbent Pat McCrory as a positive sign for changing the 2011 law (see 1612050053). Martin and Brown didn’t comment. Martin and Brown are Republicans serving rural areas.

North Carolina legislators might address Pinetops separately from broader municipal broadband changes, said Mitchell. It would be “foolish” not to allow Pinetops to use the Wilson Greenlight service that’s already there, he said. If they don’t, “it will be like a gift for those who are looking for the perfect media moment to show how bad these laws are.”

Decoupling Pinetops from the broader law changes isn’t definite, said Settles. “The question is how much fight do pro-community broadband people want to bring to the table?”

Warring Ideologies

Incumbent phone and cable companies push perennially for state restrictions on municipal broadband in legislatures, Mitchell said. Lawmakers should resist attempts to restrict municipal broadband, he said.

“Generally, state restrictions are legitimate,” countered Brake. He opposes municipal broadband that tries to “cherry-pick overbuilt areas” that already have private networks: “That just makes the economics more difficult for existing networks.”

“CenturyLink will continue to work closely with communities, local leaders and policymakers on creative public-private partnerships that bring high-speed internet services to more American homes and businesses,” a spokeswoman emailed. “If local governments choose to compete with private internet service providers, there needs to be a level playing field.”

It’s not that local governments want to compete, emailed Ferris. “Resources available to local governments are scarce, and localities have no desire to invest in new infrastructure if the private sector will provide the necessary backbone. However, we consider broadband to be a utility in today's competitive economic environment, and as such it is sometimes necessary to extend that utility to under developed and sometimes undeveloped areas -- areas that the legacy providers are not interested in serving.”