With each new legislative session come the new bills from the incumbents aiming to limit competition. We typically expect at least one and begin looking for them early in January as legislatures begin assembling in state capitols; this year the anti-muni efforts begin in Virginia and Missouri.
"Show-Me" Your Bill
Missouri’s communities have been the object of legislative persecution from big national incumbents and the legislators they back for several years. When we learned that another effort to severely limit the ability for municipalities to bring better connectivity to the community was afoot, we weren’t surprised.
This year, the bill is from Republican Senator Ed Emery, who has recently moved from the House to the Senate. Surprisingly, Emery’s bio reports that he also worked with his father and grandfather in their feed and grain business. As some one with a connection to farmers, one would expect him to understand the importance of high-speed connectivity in today’s agriculture industry. Emery also has a significant history in the utilities industry. He’s received both the Legislator of the Year Award from the Missouri Cable Telecommunications Association and the Leadership Award from the Missouri Telecommunications Industry Association.
SB 186 starts out strong by prohibiting local government from offering “competitive service,” which includes both retail or wholesale models. By preventing wholesale models, the bill interferes with a municipality’s ability to work with private sector partners, a major complaint about the bill introduced last year.
The bill states that voters can only choose to allow a municipality to offer any services after the community has engaged in a very thorough feasibility study and the results have been publicized. As with last year’s bill, SB 186 sets up onerous hurdles that threaten to sabotage a network in the early days, discouraging local communities from pursuing a chance to serve residents, businesses, and municipal facilities. The bill also dictates ballot language, establishes geographical limits on any local network, and clearly established that no funds from other municipal services can be directed toward a municipal network. Much of SB 186’s language comes from last year’s bill.
Meanwhile In Virginia
Fresh from Virginia comes HB 2108, the “Virginia Broadband Deployment Act," which makes changes to existing law by adding an entire section. The bill also repeals several disclosure exclusions relating to telecommunications; those exclusion are now under the Freedom of information Act.
Like many of the other bills we’ve seen in the past, it leads off with permissive language but then lays out conditions that effectively kill plans to deploy. The Virginia bill very clearly states that municipalities can engage in offering services, as long as their goal is to bring connectivity to “specific unserved areas.”
As in the Missouri legislation, Virginia communities must engage an independent consulting firm to create a comprehensive broadband assessment. HB 2108, however, specifically mentions the Center for Innovation Technology, which describes itself as a nonprofit, that “plugs gaps at the earliest stages of the Innovation Continuum – commercialization and seed funding….” Like the Missouri bill, the legislation in Virginia requires a community to publish the results of the assessment. In Virginia, communities must adopt very specific plans and goals for the unserved areas and publish them.
While it’s good to be specific about what a community plans to do, incumbent providers don’t have to adhere to the same level of transparency. As a result, publicly owned networks are at a disadvantage under such requirements when an incumbent knows where, what, when, and how much a municipality intends to invest to bring service to its community. When incumbents build or upgrade, they are not subject to the same level of exposure. Potential private partners who may consider leasing infrastructure or working with a community in some other capacity could also be put off by drastic transparency rules.
HB 2108 imposes very specific requirements on local governments when they begin to solicit proposals, putting an undue burden on them. They are responsible for ensuring the solicitations are sent out, specifically to incumbents, and the response window is six months. Local communities must act fast if incumbents don’t wish to upgrade or deploy in unserved areas because they have to then hold public hearings and vote on whether or not to provide services within one year of the assessment. If they don't comply within the timeline, they must obtain a new assessment at their own expense.
Of course, the anti-competitive nature of the bill prevents all but the most rural and unconnected areas from deploying Internet access infrastructure. From Section 5. of the bill, Provision of broadband expansion services:
Any locality or affiliate project to provide broadband expansion services shall be designed and built or otherwise implemented so that at the time of authorization, the project (i) does not duplicate existing broadband facilities offering broadband speeds to customers, within 90 percent of the geographic area of the project, and (ii) does not duplicate service to customers who already are in a position to connect to an Internet service offering broadband speeds, for 90 percent of the projected residential and commercial customers who will be served by the project or otherwise are within the service area of the project.
Even though the FCC defines broadband as 25 Megabits per second (Mbps) download and 3 Mbps upload, this bill lowers the standard to 10 Mbps download and 1 Mbps upload.
Read the full text of HB 2108 here.
The bill patron is Republican Kathy J. Byron, who is friendly with the telecommunications industry. She has received healthy campaign donations from AT&T, Verizon, CenturyLink, and Comcast. Delegate Byron is a member of the House Science and Technology Committee, which increases the likelihood that this bill will be heard in her committee. She is also Vice-Chairman of the House Commerce and Labor Committee and on the Finance Committee. Byron’s website says that she is on the American Legislative Exchange Council (ALEC) as part of the organization’s Communication and Information Task Force. As many of our readers know, ALEC conducts state level campaigns to use legislators like Byron to pass legislation that will advance an ultra-conservative and anti-competitive agenda.
We'll Be Watching
At this writing, HB 2108 is waiting for committee assignment review.
As these bills move through the process we’ll be watching.