Anti-Competition Bill Awaiting Final Vote in Louisiana House Would Limit Expansion of Electric Co-op Broadband

A bill close to being passed by the Louisiana State Legislature would allow electric cooperatives to expand Internet access but only in parts of the state without broadband currently. This limitation in the bill, SB 406, will keep Internet choice out of reach for many rural Lousianans and could even hamstring co-ops’ efforts to expand broadband to unserved areas.

“The language would restrict us from competing with others in the broadband market but would not stop them from cherry picking (customers) from cooperatives who choose to get in the broadband market,” Jeff Arnold, CEO of the Association of Louisiana Electric Cooperatives, explained to the Advocate.

As introduced, SB 406 explicitly authorized the state’s electric cooperatives to deploy broadband networks to connect their members using their existing electrical systems and easements. But, Senate amendments added to the bill later narrowed electric co-ops’ authority only to unserved areas, which include less than 13 percent of the state’s residents, according to the Federal Communications Commission (FCC). The Louisiana Senate voted unanimously in favor of the bill last week, and it’s currently in the House of Representatives awaiting a final reading and vote.

Louisiana Lawmakers Restrict Co-op Connectivity

While Louisiana state law does not prohibit electric cooperatives from offering Internet access, it is not expressly authorized, and one co-op that attempted to enter the business was held up by the state’s Public Service Commission, reported the Advocate. To fix that, SB 406 would specifically allow electric co-ops and their partners to provide broadband access and would permit them to use existing electrical easements and infrastructure to expand service.

However, new language added to the bill would stifle competition and challenge co-ops’ ability to expand broadband access. In particular, an amendment from the Senate Commerce Committee limits the authority only to areas without any broadband access, as defined by the FCC. The map below shows which parts of their service territories electric co-ops would be prohibited from providing broadband access in under SB 406.

Not only will this prevent broadband competition in rural Louisiana, but it could also undercut the feasibility of rural electric co-op projects in unserved areas. To make broadband networks financially possible, co-ops often need to balance low density areas with more populated communities. Otherwise, cooperatives might not be able to connect the most rural and unserved parts of their service territory — especially since co-ops can’t (and don’t want to) subsidize broadband projects with funds from their electric operations. Furthermore, as Arnold pointed out, SB 406’s new provisions put electric cooperatives at the whim of broadband providers that might choose to expand in only the most profitable parts of the state, making the most difficult to connect communities even harder to serve.

An additional amendment to SB 406 requires electric co-ops that start offering Internet access to also make poles and easements accessible to other broadband providers.

Legislators Push and Co-ops Push Back

As a result of the new bill amendments, Louisiana electric cooperatives no longer back SB 406. “Arnold said the co-op boards had supported the legislation until amendments pushed by the telecommunications industry were added by the Senate on Friday,” the Advocate reported earlier this week.

Yet, bill author Senator Beth Mizell appeared to paint the co-ops — not the large telecom monopolies — as the greedy profiteers during the Senate’s vote on SB 406. “We have voices whispering in our ears here all day long,” said Mizell, the Center Square reported. “But our people are back in our district, and they don’t have a lobbyist. They’re not paying anybody to speak for them [except] all of us.”

If SB 406 is signed into law, one small solace for the state’s electric cooperatives is that the legislation pegs the classification of “unserved” to the FCC’s definition of broadband, which it could raise in the coming years, opening more areas up to the electric co-ops. In addition, the FCC’s plan to collect more granular broadband data could make further areas eligible for co-op broadband service.

Read the text of SB 406 [pdf] or download below.