Tag: "taxes"

Posted August 4, 2020 by Ry Marcattilio-...

This week on the podcast we welcome Ernesto Falcon and Steve Blum. Ernesto is Senior Legislative Council at the Electronic Frontier Foundation, a powerhouse nonprofit organization defending civil liberties in the digital world. Steve Blum is President of Tellus Ventures Associates, which provides management and business development guidance for companies working in telecommunications. You can find him at tellusventures.com.

In this episode Christopher, Ernesto, and Steve talk about what’s going on with broadband in California. They discuss current legislation looking to make sure CA broadband subsidies result in high quality networks and don't leave people behind. Then they talk about a competing bill, and the consequences of investing public dollars in old network technology destined to leave those on the wrong side of the digital divide stranded there for another generation. Finally, they talk about the impact of campaign donations and T-Mobile merger conditions on the future of broadband in the state.

We want your feedback and suggestions for the show; please e-mail us or leave a comment below.

Read the transcript for this podcast.

This show is 35 minutes long and can be played on this page or via iTunes or the tool of your choice using this feed. You can listen to the interview on this page or visit the Community Broadband Bits page.

Listen to other episodes here or view all episodes in our index.

Subscribe to the Building Local Power podcast, also from the Institute for Local Self-Reliance, on ...

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Posted February 6, 2020 by Katie Kienbaum

At the end of 2019, Congress passed the Revitalizing Underdeveloped Rural Areas and Lands (RURAL) Act, fixing a tax law change that threatened to raise rates and delay the expansion of broadband for rural cooperative members across the country.

Passage of the RURAL Act ensures that cooperatives can accept federal funds for broadband deployment, disaster relief, and other efforts without risking their nonprofit tax exempt status. A change in the 2017 tax law would have labeled these funds as revenue for the first time, potentially causing co-ops to exceed the allowable percentage of non-member income they must maintain to remain tax exempt.

After Senators Tina Smith (D-Minn.) and Rob Portman(R-Ohio) and Representatives Adrian Smith (R-) and Terri Sewell (D-Ala.) introduced the bipartisan bill in April, it attracted 55 additional cosponsors in the Senate and more than 300 in the House. It was eventually incorporated into the consolidated appropriations act and signed into law in December.

“Obstacles From the Federal Government”

We described the possible impact of the 2017 tax law change on rural cooperatives over a year ago, when Senator Smith first brought the issue to our attention.

Failure to remedy it would have forced some co-ops to choose between continuing with desperately needed broadband and disaster recovery projects and increasing their members’ rates. Northwestern Electric Cooperative CEO Tyson Littau described the difficulty of that decision to the National Rural Electric Cooperative Association (NRECA):

Do we rebuild and try to strengthen our distribution system and pay the taxes, or do we delay the mitigation project that would improve 1,200 miles of line throughout our territory? I think we have a responsibility to the membership to improve the system for the future.

Gulf Coast Electric Cooperative was another co-op faced with the prospect of raising electric rates to...

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Posted December 24, 2019 by lgonzalez

It was about five years ago that we brought consultant Eric Lampland from Lookout Point Communications into the office for episode 80 of the Community Broadband Bits Podcast. We've completed more than 300 other episodes since then, but his insight still rings true on the many indirect cost savings of community broadband networks. As activity in our office slows down a little for the holiday season, we thought this would be a great time to revisit the conversation with Eric to remind listeners of some of the reasons why so many communities are interested in taking control of their connectivity options with public investment. Enjoy! 

Today, Lisa and I are joined by Eric Lampland for a discussion of how a community could justify building a community owned network from the indirect benefits that it would create, including the savings that each household realizes from competition driving down prices. Eric Lampland is the CEO and principal consultant of Lookout Point Communications, which helps local governments that are building a network or considering an investment.

Eric and I start by discussing how quickly the cost savings per household add up to equal more than the cost of building a network and we digress from there, covering other topics related to community owned networks. This includes how big cable companies would respond to this approach.

I have to note that most community networks have not been justified on this basis - the vast majority of community networks were designed to pay their full costs and they are doing so. Here, we discuss the general benefits of these networks that are often sidelined in the policy discussion and how they alone may justify a fiber network.

Toward the end, we begin discussing open access, something we will...

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Posted August 26, 2019 by lgonzalez

In June, Governor JB Pritzker signed the Rebuild Illinois capital plan, a $45 billion effort that will repair and improve all manner of infrastructure in the state. Within the plan, state leaders intend to dedicate $420 million to upgrade and expand broadband infrastructure. Such a significant investment can make a real difference in the state, as long as decision makers adopt smart policies and allow local communities to receive funding for broadband projects.

Gas Tax for Gigabits

An increase in the state’s motor fuel tax will fund most of the broadband initiative. The increase in gas prices at the pump, which took effect on July 1, jumped from 19 to 38 cents. Similarly, a special fuels tax on diesel, liquefied natural gas, and propane increased from 2.5 cents to 5 cents. State analysts anticipate the increase will garner an additional $1.24 billion to state coffers in 2020.

The Rebuild Plan also grants state bonding authority for infrastructure projects and Cook County municipalities are permitted to raise their gas taxes by an additional three cents per gallon. There are also title and registration fees that will contribute to the fund.

As part of the plan, Illinois created the Connect Illinois initiative, which is part of the Illinois Department of Commerce. One of the goals of the initiative's Broadband Office is to provide all K-12 students with high-speed Internet access at no charge. As part of the Rebuild Illinois plan, $20 million will be used to update and expand the Illinois Century Network, which serves K-12 schools, colleges and universities, public libraries, and Internet access providers.

seal-illinois.pngConnect Illinois and the initiative’s Broadband Office will administer the grants made possible by the fuel tax increase. The office will also work to determine federal grants that are available and how best to access them to advance the state's goals.

Connectivity Council

In mid-August, Pritzker...

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Posted November 9, 2018 by Katie Kienbaum

For many rural Americans, the local electric or telephone cooperative is their best hope for finally obtaining modern-day connectivity. With the support of government funding, rural cooperatives have brought electricity, telephone service, and more recently broadband access to some of the most rugged and sparsely populated places in the country.

However, recent tax code changes might prevent co-ops from connecting more rural communities. Cooperatives could potentially lose their tax exempt status if they accept government grants for broadband expansion and disaster recovery — an unintended yet foreseeable consequence of the Republican “Tax Cuts and Jobs Act” passed late last year. In a press release, Senator Tina Smith called attention to the oversight, noting, “This uncertainty has caused cooperatives significant concern and frozen some of their grant applications.”

Who’s Ready for Some Tax Policy?

As nonprofit membership corporations, rural electric and telephone cooperatives are exempted from paying taxes under section 501(c)(12) of the Internal Revenue Code (IRC). To maintain this tax exempt status, cooperatives must derive at least 85 percent of their income from members (e.g., from selling electricity). This is sometimes referred to as the the member income test or the income source test.

Not all sources of non-member income are included when calculating this percentage. Revenue from utility pole rentals, for instance, is exempted. In the past, rural cooperatives also excluded federal and state grants from the member income test, based on assorted rulings from the Internal Revenue Service (one example is Rev. Rul. 93-16, 1993–1 C.B. 26, which held that a federal grant given to an airport should not be considered income for tax purposes). As long as co-ops treated the government funding as a source of capital, not income, they could accept as much grant money as they wanted without the...

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Posted February 7, 2018 by christopher

We are checking back in with Ernie Staten, Deputy Director of Public Service in Fairlawn, Ohio now that their muncipal Fiber-to-the-Home (FTTH) network - FairlawnGig - is built out and they are still building the citywide Wi-Fi network that will accompany it. We previously talked with Ernie when the network was being built two years ago in episode 201.

Fairlawn is located near Akron and a city without a municpal electric utility. Though they started expecting to work with a local partner ISP, they quickly decided it would be better to both own and operate the network. 

Though the network is quite young, it has already helped to boost property values and has attracted new businesses. FairlawnGig was also the primary reason one local business expanded in Fairlawn rather than moving to another location. In short, the network has provided a strong, positive impact almost immediately. 

This show is 24 minutes long and can be played on this page or via iTunes or the tool of your choice using this feed.

Read the transcript for this show here.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.

Posted October 2, 2017 by Staff

This is the transcript for Episode 272 of the Community Broadband Bits Podcast. Christopher Mitchell sits down with three local leaders in Lyndon Township, Michigan, to discuss how the community decided to pursue a Fiber-to-the-Home network. Listen to this episode here.

Gary Munce: We had a voter turnout of 43 percent of the Township residents. That is by far and away the largest turnout for any August election in the history of voting in Lyndon township.

Lisa Gonzalez: This is episode 272 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. In August, the small community of Lyndon Township, Michigan voted to raise property taxes to fund publicly-owned fiber optic infrastructure. Marc Keezer, Gary Munce, and Ben Fineman from Lyndon joined Christopher to talk about the vote, their proposed network, and how they spread the word about improving connectivity in their rural community. Our guests also describe the work of Michigan Broadband Cooperative that's working on the Lyndon project. Now, here's Marc, Gary, Ben, and Christopher.

Chris Mitchell: Welcome to another edition of the Community Broadband Bits podcasts. I'm Chris Mitchell, and today I'm speaking with a cohort of folks from Lyndon Township in Michigan. I'll start with introducing Marc Keezer, Lyndon Township Supervisor. Welcome to the show.

Marc Keezer: Thank you, Chris.

Chris Mitchell: We also have Gary Munce who led the Lyndon Broadband initiative ballot campaign and is also a board member of the Michigan Broadband Cooperative. Welcome to the show.

Gary Munce: Thanks, Chris.

Chris Mitchell: And our third guest is Ben Fineman who volunteers as president of the Michigan Broadband Cooperative and is someone that I know has been working on this for a long time. Welcome to the show.

Ben Fineman: Thank you very much for having us, Chris.

Chris Mitchell: So we got three guys from Lyndon township working on this for a long time. I think a good place to start is with Marc Keezer, Lyndon Township Supervisor for people who might have forgotten already. So tell us a little bit about...

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Posted September 26, 2017 by christopher

Michigan's Lyndon Township set a local election turnout record in August when voters supported a measure to build a municipal fiber network by 2:1 margin. The initiative was largely organized and supported by the Michigan Broadband Cooperative, a local effort to improve Internet access in the community. 

To better understand their approach, organizing, and future plans, we have three guests on episode 272 of the Community Broadband Bits podcast. Ben Fineman volunteers as the president of the Michigan Broadband Cooperative, Marc Keezer is the Lyndon Township Supervisor, and Gary Munce led the ballot campaign and is also a board member of the Michigan Broadband Cooperative.

We discuss a variety of issues around their approach, including how the increased property tax to pay for the network will work. We also discuss the education campaign, next steps, and their hopes for helping other communities avoid at least some of the hard work they went through. 

Read the transcript for this show here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 30 minutes long and can be played on this page or via iTunes or the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.

Posted January 25, 2017 by lgonzalez

Local officials in Columbia County, Georgia, wanted better public safety communications, synchronized traffic signals, and better connectivity for government facilities. They decided the best strategy was a publicly owned network and their decision is creating opportunities they hadn't anticipated.

When he considers how the county expanded its fiber network to improve economic development, education, and public savings, Columbia County Broadband Utility (C3BU) Broadband Manager Lewis Foster still sounds a little surprised. After all, Columbia County planned on using the network for a limited purpose, but then they realized the diversity of the asset. "It was almost an afterthought," he says.

Poor Options Created A Positive Path

Before the idea of a publicly owned network saw the light of day in Columbia County, local leaders contacted the incumbent providers to set up a dark fiber lease. To their dismay, incumbents AT&T, Comcast, and WOW, would not lease the county dark fiber.

County officials approached incumbents in 2007 and 2008 hoping to secure a dark fiber lease. The large providers, however, said they either didn’t have any dark fiber to lease, they could offer lit services, or they would build a dark fiber network for the county to use. Incumbents demanded a model where the county would pay the construction costs but the infrastructure would be owned and operated by the incumbents – who would then charge the County for access to the network the county had paid for. Foster recalls that incumbents we’re most interested in charging premium rates for lit services. Columbia County officials wanted a better option and found a more fiscally responsible approach in simply owning the network.

recovery1.gif

As county leaders developed a plan to deploy fiber, the Obama administration and Congressional Democrats crafted the American Recovery and Reinvestment Act (ARRA). In 2009, with Columbia County's $18 million project plan well developed, they applied for stimulus funding. Their project obtained a $13.5 million stimulus grant; they used county sales tax funds to pay the $4.5 million local match. When the recession hit in 2008, says Foster, the cost to complete other budgeted projects decreased, leaving the county with unspent sales tax funds that they applied to the C3BU project. He...

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Posted June 22, 2016 by lgonzalez

Rockport was the first community in Maine to build a fiber-optic network to serve businesses, but their pioneering initiative will not extend to Fiber-to-the-Home (FTTH). At their annual town meeting on June 15th, the local Opera House was packed as citizens showed up to speak on funding an FTTH engineering and network design study. After an extended debate, attendees voted on the measure and defeated the town warrant to spend $300,000 on the project.

According to the Penobscot Bay Pilot, passions flared as a number of people stood up to explain their vote. Several people in support of the project had previous experience with life after fiber:

Deborah Hall, on the other hand, said she led an effort in another state to take fiber optics to 500 homes. That effort resulted in the fact that the “average resident is now saving 100 dollars every month in getting rid of Comcast.”

She recounted how the fiber optic system already in place in Rockport was a draw for her family to return to live in the town. They improved their Internet on Russell Avenue by personally spending the money to extend the fiber to their home, and consequently “reduced our collective Internet and television bills by $155 a month. That’s over 50 percent.”

Rockport’s youth described their dilemma, living in a place where connectivity was less than adequate:

Thomas R. Murphy said he also grew up in town but said: “I am leaving this town to seek a technology career, and am moving to Austin. I have to do this because we do not have technology in this town.”

He warned that sticking with the status quo, residents were paying a company “to make profits and take profits to shareholders in other places.”

“We can keep our resources here and improve lives of everyone. This is an investment we need to make for our future. Costs can be spread thoughtfully by the town, and we can pay forward to the future of the town.”

People at the meeting who did not support the project did not like the idea of paying an estimated $150 more per year in property taxes, even though it would significantly lower monthly Internet...

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