Community Broadband Legislation Roundup - May 4, 2021

Snapshot

Nebraska Senate rejects amendment supporting municipal broadband in spending plan

Michigan Governor vetoes bill granting private ISPs property tax exemptions

Montana, Iowa and Maine channel Rescue Plan funds towards new broadband grant initiatives

The State Scene

Nebraska

The Nebraska Senate approved a plan to spend $40 million over the next two years on expanding rural access to high-speed Internet by a unanimous vote on Tuesday, but only after an amendment to L.B. 388 that would have allowed municipalities to offer retail broadband services was rejected.

State Sen. Justin Wayne introduced the amendment, saying that “broadband should be considered a critical infrastructure need and that private telecommunications companies have not stepped up to serve the whole state,” the Lincoln Journal Star reports.

Wayne urged Nebraska Senators “to look to Nebraska's history of public power as a model, as well as to the example of other states that are allowing cities to offer broadband.” The amendment ultimately failed by a vote of 20-24. Wayne assured fellow Senators that he will reintroduce the amendment in the future. 

The bill marked the first time the Nebraska Legislature has suggested using state tax dollars to fund broadband deployment. As it was submitted to Gov. Pete Ricketts for his signature, the bill would annually allocate, until funds run out, $20 million in grants to projects that increase access to high-speed broadband in unserved regions of Nebraska. It would prioritize projects in regions which lack access to Internet service with speeds of at least 25 Megabits per second (Mbps) download/3 Mbps upload. Grant recipients would be required to deploy networks capable of providing service of at least 100/100 Mbps within 18 months. 

Michigan

Michigan Gov. Gretchen Whitmer vetoed H.B. 4210 on April 14, a bill which would have granted Internet Service Providers (ISPs) a personal property tax exemption on broadband infrastructure first installed or used after December 31, 2020. H.B. 4210 has been rereferred to the House Committee on Communications and Technology.

Gov. Whitmer rejected the bill, saying the speeds it called for won't keep up with modern bandwidth requirements. ISPs eligible for the tax cut were merely required to offer Internet services with speeds of 25 Mbps download/3 Mbps upload, the minimum speed for broadband as the FCC defines it. The exemption would reduce property tax revenue to the state. 

The bill’s sponsor, State Rep. Beth Griffin, argues that the intent of the bill is to spur deployment of Internet resources in rural areas, but the tax benefit would be implemented statewide. There is no evidence that changing these tax policies results in more investment and there are fears it mostly benefits larger monopolies in areas already considered served.

In a fiscal analysis, the House Committee on Communications and Technology found that there is limited market potential for private ISPs looking to expand access in rural Michigan. The Committee further found that H.B. 4210 “would be unlikely to lower prices sufficiently to entice those who do not [currently] subscribe for cost reasons to join.” Affordability may be one of the biggest barriers to broadband adoption in Michigan. One third of Michigan households that do not subscribe to Internet service indicate it is because the service is too expensive. 

Michigan has pursued a variety of options to create an incentive for broadband deployment into underserved areas of the state in the past; however, this legislation would likely not fuel the deployment of fiber networks in rural regions. State legislators in the Senate are currently working on a similar bill.

Montana

The Montana House passed a bill that creates a grant program to use the state’s general fund and federal broadband stimulus money to finance broadband expansion projects in underserved and unserved regions of the State. S.B. 297, the ConnectMT Act, was passed on Tuesday, sending the measure to State Gov. Greg Gianforte for approval. 

Under the program, government entities are not eligible to apply for funding, but private ISPs with proven track records would be able receive funding for projects, provided recipients commit to pay 20 percent of overall costs. The state of Montana would match the ISPs, covering the remaining 80 percent of total costs. 

A companion bill, H.B. 632, would allocate incoming federal Rescue Plan money and currently directs $275 million to go towards the grant program. However, that amount isn’t final and State Sen. Jason Ellsworth, the sponsor of the Senate bill, said he’s “still expecting to get more funding” for the grant initiative. 

The House bill also contains a provision enabling local governments to partner with private ISPs to provide Internet services, but it is unclear whether that provision will remain.

Iowa 

Iowa Gov. Kim Reynolds signed a bill creating the Empower Rural Iowa Broadband Grant Fund, which aims to expand high-speed Internet access into underserved regions of Iowa. H.F. 848 was passed unanimously in both the State House and State Senate. 

Now, state lawmakers are waiting for Gov. Reynolds to move on H.F. 867, a larger state budget proposal that would provide funding for the Rural Broadband Grant initiative, which also received unanimous approval from both legislative chambers.

In January, Gov. Reynolds proposed investing $450 million over the next three years to expand Internet access in the state and called on lawmakers to allocate $150 million for the program in fiscal year 2022. The House budget bill instead appropriates $100 million for the program. 

"There is a bipartisan agreement that this is something the state needs to continue to look into, both setting up the grant program and devoting resources to it," Rep. Chris Hall told KMA Land. "The House and Senate have chosen to allocate $100 million from the state's general fund to go toward the cause of broadband expansion."

Maine

As state lawmakers in Maine wrestle with how to best expand access to broadband in the Pine Tree State, L.D. 1484, a bipartisan bill was introduced in the Maine State Senate on April 12. The bill calls for devoting $129 million of anticipated federal Rescue Plan funds toward establishing the Maine Connectivity Authority.

The bill would amend laws governing the ConnectMaine Authority to empower the new connectivity authority to issue bonds, own broadband infrastructure, and hold equity in broadband projects. It would also allow the authority to issue grants and enter into agreements with the public and private sector to coordinate the buildout of broadband infrastructure.