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...

At the Institute for Local Self-Reliance, we recognize the power of small businesses in local communities. As federal lawmakers consider where they stand on the issue of network neutrality protections, small businesses can join forces to let Congress know that they need network neutrality to stay strong. Fight For The Future (FFTF) has launched a campaign that takes advantage of “Small Business Week” and its proximity to a crucial vote involving the Congressional Review Act (CRA).

Sign, Host, Deliver, Speak

FFTF encourages business owners to express their support for network neutrality by signing a short letter they’ve prepared that succinctly addresses the issue for small businesses:

Dear Member of Congress,

We are companies who rely on the open Internet to grow our business and reach customers online. We are asking Congress to issue a “Resolution of Disapproval” to restore net neutrality and the other consumer protections that were lost when the Federal Communications Commission (FCC) voted to repeal the 2015 Open Internet Order in December 2017.

Users and businesses need certainty that they will not be blocked, throttled or charged extra fees by Internet service providers. We cannot afford to be left unprotected while Congress deliberates.

We will accept nothing less than the protections embodied in the 2015 order. Please ensure the FCC keeps its tools to protect consumers and business like ours.

Thank you for considering our views.

Sincerely,

Fight for the Future

Thousands of businesses have already signed on to the letter to be delivered to members of Congress on May 2nd, the high point of “Small Business Week.”

FFTF also offers suggestions, resources, and media materials for local folks who want to attend an event happening in their area or who want to organize a local event. If you want to organize a letter delivery, FFTF offers a package of resources that includes steps to take, graphics and media for outreach, recruitment ideas, and points to consider when talking to the press. It’s all you need in one place — you add the energy.

With strong...

After the FCC chose to overturn federal network neutrality protections on December 14th, 2017, open Internet advocates and elected officials that favor network neutrality have sought avenues past the Commission to reinstate the policy. In Louisiana, four groups of citizens organized together to form Team Internet and stage Louisiana rallies in four cities in January. Their goal was to bring attention to the overwhelming opinion that network neutrality benefits Internet users and to convince Senator John Kennedy that he should vote to block the harmful FCC decision.

Fight for the Future (FFTF), Free Press Action Fund, and Demand Progress worked together to form Team Internet, which organized protests in Lafayette, Shreveport, Baton Rouge, and New Orleans at Kennedy’s offices. At the Lafayette office, a group of advocates led by Layne St. Julien presented petitions with more than 6,000 signatures to Kennedy’s deputy state director, Jay Vicknair. The petitions urged Sen. Kennedy to use his vote to overturn the FCC action.

According to Vicknair, constituents have called and emailed the office in numbers rivaled only by last year’s healthcare debates.

Advocate Tool, The CRA

Proponents of network neutrality — mostly people, companies, and entities that aren’t big ISPs — consider the FCC’s order harmful. In order to regain network neutrality protections, which would remove the threat of paid prioritization and better ensure an open exchange of ideas online, advocates hope to use the Congressional Review Act (CRA). Under the CRA, Congress can reverse the FCC decision within 60 legislative days of it being published in the Federal Register as long as there is a majority vote. At last count, 50 Senators had committed to supporting a reversal. Public Knowledge has created a quick video describing the process:

At the recent Team Internet protest, attendees called on Kennedy to “be a hero” and be the 51st.

In A Net Neutrality Zone

Kennedy’s Lafayette office where St. Julien and other activists met Kennedy’s staff, operates in a community where the...

Christopher went to Atlanta for the Broadband Communities Economic Development Conference in early November, and while he was there, he touched base with this week’s guest Will Rinehart. Will is the Director of Technology and Innovation Policy at the American Action Forum, a DC nonprofit organization that’s been around since 2009.

Will and Christopher don’t always see eye to eye on issues that affect telecommunications and broadband policy, but both agree that it’s important to have spirited debate to share perspectives. Only by examining issues from different sides can we craft policy that creates lasting benefits.

In this interview, Will describes his organization and his work there. Chris and Will look at compelling issues such as ISP competition, government regulations, and how the FCC’s 2015 upgraded definition of broadband has reverberated in the market. The two get into franchising and ubiquitous broadband, local authority, and connectivity in rural America. It’s a spirited discussion chock-full of issues.

You can tweet to Will, he’s @WillRinehart on Twitter.

Read the transcript for this show here.

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