Localities Ready to Sue Ohio to Keep Muni Broadband

Localities are gearing up to sue Ohio unless lawmakers remove a proposed ban on municipal broadband that the Senate added to the state budget without hearings. A conference committee is expected to say in coming days if the amendment added this month will make the final budget that both chambers must pass and Gov. Mike DeWine (R) must sign by month’s end. The proposed ban could force existing muni providers to sell their businesses, said local officials in interviews last week.

“We have a lot invested here,” said Ernie Staten, director of Fairlawn’s Public Service Department. “We’re not just going to sit back and allow it to be taken from us.”

Some municipalities passed resolutions recently to condemn the proposed amendment that would prevent communities from serving areas that have at least 10 Mbps download and 1 Mbps upload, which is less than the federal government’s 25/3 Mbps broadband definition. The amendment would also prohibit localities from aggregating federal funds or using other revenue to fund or subsidize broadband. And the Senate removed broadband funding DeWine sought. Localities formally raising opposition include Summit and Medina counties and Fairlawn, Clinton, Munroe Falls and Silver Lake. Netflix, Google Fiber and the Fiber Broadband Association opposed the ban, in a June 10 letter to the governor.

Lt. Gov. Jon Husted (R) “would always prefer a private-sector solution,” a spokesperson emailed. “But when no private-sector solution exists or is forthcoming, private/public partnerships or non-profit providers must be available alternatives.” Husted said in a statement that he and DeWine want “the legislature to fully fund the budget for Broadband expansion and ensure those Ohioans are not left behind any longer.” The offices of DeWine, Ohio Senate President Matt Huffman (R) and House Speaker Bob Cupp (R) didn’t comment Friday.

Fairlawn will continue its muni broadband service if there's a ban, and the city is willing to go “all the way to the Supreme Court,” Staten said. He predicted “a concerted” legal effort by “quite a few” against the state. Or a carrier could try to sue cities that don't adhere to the ban, he said. The ban is unconstitutional because Ohio’s home rule lets communities spend money and provide services as they choose, and since a single-subject rule restricts the state from making policy in a budget bill, Staten contended. Fairlawn would be “happy” to debate the policy in hearings on a separate bill, he said: no public comment was allowed here.

Ice Miller anticipates its municipal clients will ask its Ohio law firm to represent them in a possible suit against the state, as the lawyers did in recent litigation against Ohio’s 2016 small-cells law that a court forced lawmakers to replace in 2018, said Christopher Miller in an interview with two other attorneys there. Ice Miller represented 50 jurisdictions in the small-cells case and thinks more groups could sue this time because the policy also affects school districts and port authorities, he said.

Putting the muni policy in the budget bill violates the state’s single-subject rule, which was why a court in the small-cells case ruled it unconstitutional to combine wireless infrastructure and animal cruelty policies in one bill (see 1706050052), said Miller. The lawyer said he suspects the cable industry -- specifically Charter Communications -- pitched the policy because other carriers told him they didn’t want to get involved. Charter and the Ohio Cable Telecommunications Association didn’t comment.

The proposed ban would stop Medina County’s network from expanding or adding customers, which would benefit only companies like Charter that seek to “close off any kind of competition,” said county board Vice President Steve Hambley (R). It would force government-owned networks to sell networks at discount rates to big providers, he said. Medina built a network where the county owns the backbone and now leases connections to 14 companies, said Hambley: Companies weren’t providing speeds, reliability or security needed by businesses. The former state rep said he spoke to Senate leader Huffman and legislators representing Medina.

Expect “a legal challenge by an impacted municipality or two (or more) if the language remains in the final version and the Governor doesn’t veto it,” emailed Ohio Municipal League Executive Director Kent Scarrett. While OML itself can’t sue due to lack of standing, Scarrett predicted a constitutional challenge about violating the home rule. Before then, a legislative conference committee will negotiate “behind the scenes,” he said.

Talks

The legislative conference committee first met Tuesday and is expected to finish by June 28, said Ice Miller's Jessica Voltolini. There has “been a ton of outreach by multiple stakeholders to Senate leadership, House leadership and the governor’s office,” she said. “It is on the radar of the conferees.”

Staten said the conference committee will probably vote by June 25 because DeWine said he wants five days to review the budget before the June 30 deadline. Fairlawn reached out to DeWine, Husted and various Ohio legislators, he said: some contacted state senators claimed not to realize the ban was in the more than 800-page omnibus bill when they voted.

“There’s no part of that amendment that can be included” in the budget bill, the Fairlawn official said. “There’s no compromise on our end.” Fairlawn wouldn’t be able to provide its gigabit fiber service to even existing customers because incumbents AT&T or Charter could probably serve any customer there with 10/1 Mbps, he said. “It kills everything that we’ve done.” If Fairlawn must turn off service, it would have to consider selling its network, he said.

The proposed ban would make it nearly impossible for many existing local Ohio networks to continue service because many of their customers could get 10/1 Mbps from incumbents, said Ice Miller’s Lindsay Miller: if satellite coverage counts, it’s possible no area in the state would qualify for muni broadband.

AT&T declined to comment. USTelecom wouldn't comment on Ohio but shared links to the group’s recent criticisms of muni networks.

“Community leaders are not anxious to become broadband providers but those who have been left behind have to take matters into their own hands,” said Fiber Broadband Association CEO Gary Bolton: Any state “proposing bans or in any way attempting to prevent its citizens from having access to fiber broadband is working at cross purposes” with their citizens, the Biden administration and bipartisan Congress members.