Tag: "taxes"

Posted October 4, 2022 by Ry Marcattilio

Join us live on Thursday, October 6, at 5pm ET for the latest episode of the Connect This! Show. Co-hosts Christopher Mitchell (ILSR) and Travis Carter (USI Fiber) will be joined by regular guest Doug Dawson (CCG Consulting) and industry veteran Heather (HBG Strategies). They talk about the economics of broadband deployment, from the effect of taxes, to rural fixed wireless, to whether fiber is ever "too expensive" to build.

Email us at broadband@muninetworks.org with feedback and ideas for the show.

Subscribe to the show using this feed or find it on the Connect This! page, watch on YouTube Live, on Facebook live, or below.

Posted August 3, 2022 by Karl Bode

Ashland, Oregon has long been a trailblazer in terms of meeting community demand for faster, more affordable broadband access.

The city-owned network has also had a bumpy road—at times being branded as an example of municipal broadband failure. But the network continues to grow as it faces down an urgently-needed pivot toward a fiber-based future. 

Despite the current economic healthiness of the network and the clear benefits it’s brought to the community over the last 20 years, local officials are talking about divesting instead of making the financial commitment to continue the investment the city has already made.

The community-owned Ashland Fiber Network (AFN) was first developed in the late 1990s by locals angry at the high prices and historically terrible customer service by the local cable company. Like so many community broadband alternatives, it was a network built from grassroots frustration at consolidated market failure. 

Benefits of the community networks were on stark display during the telecommuting and home education boom of the Covid-19 crisis, when the city announced it would be providing free 30 Mbps broadband to all city residents without access to the Internet. 

AFN is an open access network, meaning that numerous companies are allowed shared access to the core city network, delivering a variety of broadband, phone, and TV services. As a result, the network’s no-contract broadband pricing tends to be simpler and less expensive than options found in cities dominated by one or two private sector telecom monopolies.

One central benefit of the network remains that it forced regional incumbent Charter to more seriously compete on price. As with other, similar projects, the network has also proven more responsive to the citizens it serves. 

The Best Laid Plans...

While AFN was a pioneering effort that embraced numerous disruptive ideas in its quest to disrupt the nation’s monopolies, some early managerial missteps, combined with an early decision to embrace the money pit that is cable television...

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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 Lisa Gonzalez

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 Lisa Gonzalez

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.png Connect 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 Mitchell

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 Mitchell

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.

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