Missouri's HB 2078 Advances

Dear Readers: Since I first wrote this story with my attempt to analyze this bill, I have revisited my earlier interpretation. If you read this bill analysis before, you will notice some changes.

It is starting to become an annual pilgrimage to Jefferson City. Each year, House and Senate leaders on the telecom industry dole, introduce the same anti-competition bill.

This year the bill we are watching is HB 2078 in the House, yet another AT&T bill. We briefly introduced you to it in January when we requested you call Republican Representative Lyndall Fraker and the other Members of the House Utility Infrastructure Committee. Fraker is Chair of the Committee, often an indication that the committee will hear the bill.

AT&T donated $20,000 to the House Republican Campaign Committee, reports Ars Technica. Even though the check was deposited on February 15, 2016, Ars learned it was actually donated in September 2015, before session began. Regardless of when the money was donated, it is notable that AT&T contributed a total of $62,500 to political committees in Missouri, a place where the incumbent does not shy away from flexing its lobbying influence.

Last year, HB 437 was introduced and, after opposition from a number of private entities and public sector representatives, stalled in the House. Many of HB 437's anti-competitive characteristics are resurrected this year in HB 2078.

There are many things we don't like about this bill because it forces local governments to hold expensive referendums, dictates how they spend local revenue, and decrees cryptic rules that discourage partnerships with private providers.

"Competitive Services"

The bill would allow a municipality to offer "competitive services" as defined by the bill only if less than 50 percent of addresses in town are not being offered services "by any combination of service providers." We are not the only ones to document the overstatement of coverage of NTIA maps, which rely on self-reporting from the very companies that seek to limit municipal networks.

The bill goes on to provide various definitions of "competitive services," one of which is "communication service," which is an  ambiguous and confusing term that will have the effect of triggering the referendum requirement in the bill. Such an onerous requirement slows down local communities when they are trying to hasten economic development opportunities. 

The bill's backers attempt to put limits on what is "competitive" by preventing innovation from municipal networks. They use the words "substantially similar" to describe the types of services offered - another ambiguous term that can be conveniently reinterpreted later. 

"Exception"...Ya

HB 2078 creates a lip service "exception," as these bills always do, with a bar set so high no municipality could invoke it. We chose to highlight just a few aspects of a worthless section of a bill clearly and carefully drafted to prevent competition for the incumbents.

After a weekend reviewing the language of the bill, I see this as the correct interpretation :  that in order for a municipality to offer services by taking advantage of the exception, they must both double the speeds offered by incumbents and serve half the residences.

The most debilitating factor for any municipality that is subject to this law is that they would have to offer service to at least 50 percent of the addresses in the municipality from the first day. In other words, the community would have to wait until they have deployed a network to at least 50 percent of their community before they could begin providing service. Such a requirement would hobble any municipality that wanted to access revenues from one portion of a buildout to fund later expansions.

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A Word About Dark Fiber

The bill used the broad term "communications service" and "competitive service" which called into question whether or not it applied to dark fiber providers. Recently, Google Fiber announced it will lease dark fiber from Huntsville, Ting leases dark fiber from Westminster and has stated that it seeks similar partnerships elsewhere. There are other communities that have unique arrangements with private entities. HB 2078 inserts Missouri state law into potential partnerships between public and private entities that rest on dark fiber. It requires the same terms and conditions be made available to "all service providers." 

This section interferes with a municipalities ability to forge partnerships with private industry leaders. For example, the agreement between Westminster and Ting might have triggered the negative impacts of this bill because the two agreed on 5 years exclusivity for the provider. 

The Next Step for HB 2078

HB 2078 passed through the House Utility Infrastructure committee 16 - 2 on February 18th and next heads for the Select Committee on Utilities. If it passes there, it will move the the House Floor for approval.

Last year the same measure did not advance because it was a bad bill. Missouri already has restrictions in place but this bill will make it even harder for residents and businesses to ever have access to more choices and the better service that come with competition. The legislation is written and backed by elected officials who hold the distinction of being darlings of AT&T, CenturyLink, and Comcast. Until we put this issue to rest permanently by allowing local authority in Missouri, the pilgrimage to Jefferson City will get tougher every year.