Hoping to ensure it can actually spend its share of historic broadband funding, Montana lawmakers have tweaked the state’s restrictions on community broadband. However, experts say most of the state law’s pointless restrictions remain intact, undermining state efforts to bring affordable, next-generation broadband access to Montana residents.

Montana’s one of seventeen states that have passed laws banning or restricting municipal broadband networks. The bills are usually ghost written by telecom monopoly lawyers, and in many states either outright prohibit community-owned broadband networks, or are designed to make funding and expanding such networks untenable.

Montana’s specific law, Mon. Code Ann. § 2-17-603, only allow municipalities to build and deliver broadband alternatives if there are no other private companies offering broadband within the municipality’s jurisdiction, or if the municipality can offer “advanced services” that are not available from incumbents.

Covid home schooling and telecommuting needs highlighted the counterproductive nature of such restrictions, driving some states—such as Arkansas and Washington—to dramatically roll back their restrictions.

In early March, Montana lawmakers made some subtle tweaks to the state law, but left nearly all of the state’s problematic restrictions intact. Lawyers tell ISLR the revisions, made via SB147, slightly tweak Montana’s restrictions to ensure that “political subdivisions of the state” can use federal funds to deliver broadband to regions deemed strictly unserved by the FCC.

Earlier this month, a new Colorado bill was introduced that, if passed, would rid the state of a law designed to protect monopoly Internet service providers (ISPs) from competition.

SB-183, titled “Local Government Provision Of Communications Services,” seeks to gut a law Big Telecom pushed state lawmakers to pass in 2005. That law, known as SB-152, prevented any of Colorado’s 272 municipalities from building and operating their own telecommunication infrastructure unless local voters first passed a referendum to “opt out.”

End of ‘the Qwest Law’?

Known also as “the Qwest law,” Qwest (now Lumen but more recently CenturyLink), with the help of Comcast, leaned on legislative allies to pass SB-152 to protect their monopoly profits. On our Community Broadband Bits podcast, Ken Fellman and Jeff Wilson, prominent telecom attorneys, recount how lobbyists for the monopoly ISPs were instrumental in pushing two false, but effective, narratives we’ve seen many times before: that SB-152 only sought to “level the playing field” so that private companies could compete with municipally run networks, and that SB-152 “protected” Coloradoans from irresponsible local governments, as if there were no such things as local elections.

But, if passed, the new proposed legislation (SB-183) – co-sponsored by a bipartisan-ish group of state legislators (10 Democrats and 2 Republicans) – would neuter SB-152 and allow local communities to decide for themselves if they wanted to pursue municipal broadband without needing special permission from the state.

More than 121 Colorado cities and towns have now opted out of SB152, a 17-year old state law backed by telecom monopolies greatly restricting the construction and funding of community broadband alternatives.

And the trend shows no sign of slowing down. 

Colorado’s SB152, passed in 2005 after lobbying pressure by Comcast and Centurylink, prohibits the use of municipal or county money for broadband infrastructure without first holding a public vote.

Deep pocketed monopolies know they can usually outspend municipalities, bombarding voters with misleading marketing to try and shift the vote in their favor. But SB152 is different from most of the other 17 state preemption laws ghost written by monopolies in a bid to stifle consumer choice: it includes a clause allowing voters to opt out of the restrictions entirely. Angry at decades of market failure, Colorado towns and cities are increasingly shaking off these unnecessary shackles in a bid to improve service. 

During the recent midterm elections, four additional communities (Castle Pines, Lone Tree, Pueblo and Trinidad) voted to opt out of the onerous state restrictions. With those votes, more than 121 Colorado communities have chosen to opt out of SB152, according to the latest tally by the Denver Post.

Across the country, the pandemic highlighted the essential nature of affordable fiber broadband networks. That in turn accelerated public annoyance at regional monopolies intent on maintaining a very broken, but very profitable status quo, Tim Scott, a project manager overseeing the buildout of Boulder’s broadband backbone, told the Denver Post. 

“Why do we accept this duopoly of service? That’s what we’re trying to do in Boulder is to make it more competitive,” Scott said. “What the pandemic did is it brought the delivery of broadband services to the attention of every mayor.”

A bipartisan coalition of Pennsylvania lawmakers have introduced legislation that attempts to reverse some of the state’s most-stringent provisions hamstringing municipal broadband builds.

But experts suggest that while the bill may be well-intentioned, a cleaner approach would be to eliminate the state’s harmful and dated restrictions on municipal broadband entirely. 

As it currently stands, Pennsylvania law prohibits municipalities from providing broadband to state residents for money, unless existing telecom providers don’t currently provide broadband access at the address, and those providers claim they’re willing to do so sometime within 14 months of being asked. 

Under the state law, the only metric used to determine whether an ISP is adequately “serving” an “underserved” area is advertised speed. No additional metrics, including price or quality of service, are used to make such a determination. 

Such restrictions not only hamstring creative, local municipal broadband solutions, it gives telecom industry giants the ability to effectively veto or delay any new promising builds simply by promising that they might someday extend advertised speeds to under-served territories.

New Bill Takes Aim at State Preemption Law

Enter SB1363, a new bill introduced in November to the Pennsylvania legislature that attempts to scale back at least some aspects of the state’s problematic restrictions on municipal broadband. 

The bill, sponsored by Pennsylvania State Senator John I. Kane (D), starts by adopting a more modern standard definition of broadband of 100 Megabits per second (Mbps) in both directions, a dramatic boost from the FCC’s current definition of broadband: a paltry 25 Mbps downstream, 3 Mbps upstream.

After years of efforts, the telecom industry and a range of independent broadband experts are making progress in a quest to make broadband grants tax exempt, a move industry players large and small say is necessary if the federal government wants the historic round of new federal broadband funding to benefit as many un- and under-served Americans as possible. 

During previous broadband grant programs, such as the (Broadband Technology Opportunities Program) BTOP and (Broadband Initiatives Program) BIP grants in 2010, the Internal Revenue Service had the authority to unilaterally exempt some grants from taxation. 

The Tax Cuts and Jobs Act (TCJA) required that broadband grants be treated as taxable income. As a result, telecom industry watchers have been warning since March that upwards of 21 percent of new grant awards would need to be paid back to the United States government in the form of taxation, complicating project financing and scale. 

“Entities expecting to receive grant funds would need to budget for the tax bill, potentially requiring a reduction in the scope of their project,” Casey Lide of the law firm Keller & Heckman wrote in a post detailing the implications. “Entities might also consider structuring a project so that grant funds are received by tax-exempt entities.”

With more than $50 billion in Infrastructure Investment and Jobs Act (IIJA) and American Rescue Plan Act (ARPA) funding waiting in the wings, industry players large and small are working to reverse the changes imposed in 2017 before the tax man comes knocking.

Today marks a full year since Gigi Sohn was nominated to fill the fifth and final seat on the Federal Communications Commission (FCC). Since her nomination, Sohn has gone through two confirmation hearings and a constant barrage of right-wing attacks pushed by the big cable and telecom monopolies. 

With the lame duck session of Congress just weeks away, an array of public interest groups are ramping up a campaign to push Sen. Chuck Schumer and the White House to schedule a vote to confirm her nomination before the end of the year.

Time is Running Out

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Dozens of press releases are being issued today to bring attention to the apparent foot-dragging of the U.S. Senate and White House that has left the FCC in a 2-2 deadlock for nearly two years.

Public Knowledge issued a statement today calling on Senate leaders to confirm President Biden’s nominee:

Today marks a full year since Gigi Sohn was nominated to fill the fifth and final seat on the Federal Communications Commission (FCC). Since her nomination, Sohn has gone through two confirmation hearings and a constant barrage of right-wing attacks pushed by the big cable and telecom monopolies. 

With the lame duck session of Congress just weeks away, an array of public interest groups are ramping up a campaign to push Sen. Chuck Schumer and the White House to schedule a vote to confirm her nomination before the end of the year.

Time is Running Out

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Dozens of press releases are being issued today to bring attention to the apparent foot-dragging of the U.S. Senate and White House that has left the FCC in a 2-2 deadlock for nearly two years.

Public Knowledge issued a statement today calling on Senate leaders to confirm President Biden’s nominee:

The agency has not had a full five-member commission for the entire Biden administration, which has effectively stalled key consumer protection priorities as well as our nation’s work to provide high-speed broadband to those on the wrong side of the digital divide. Public Knowledge urges Sen. Chuck Schumer (D-NY) to call the vote confirming Gigi Sohn to the FCC to get the nation’s broadband agenda back on track.

Although disappointing for advocates of local Internet choice weary of monopoly providers working to stifle competition, what we are seeing coming out of Montana’s state broadband grant program, Connect MT, shouldn’t be all that surprising.

Last week we learned that the state’s Department of Administration had recommended that nearly half of the Connect MT funding – $126 million – be awarded to Charter Communications, which has been aggressively lobbying Montana legislators (and funding campaigns in opposition to community broadband proposals in other states).

It did not go unnoticed by Montana Free Press deputy editor Eric Dietrich who recently reported that the recommended award to Charter “has plowed into rocky ground as (the state) considers a list of recommended projects this month.”

‘Not Perfect by Any Means’

The story raises questions about the state’s ranking system for proposed projects and notes that the lion’s share of grant money being recommended for Charter “has drawn the ire of smaller, Montana-based companies that want more support for their own networks.”

In hearings this month, Department of Administration Director Misty Ann Giles, the committee’s vice-chair, described the $258 million program as a learning experience for the state government, which hasn’t previously managed a large broadband program. The scoring system the department used to rank applications, she said at an Aug. 2 meeting, ‘is not perfect by any means.’

‘This is a first-in-kind program for the state of Montana, so there’s definitely some lessons learned,’ Giles said.

Giles and committee chair Sen. Jason Ellsworth, R-Hamilton, have also said the state will have the chance to fine-tune its awards process and fund additional projects as it works through additional federal broadband money it expects to receive through the Infrastructure Investment and Jobs Act.

After passage of the American Rescue Plan Act, the Republican-controlled Montana Legislature established advisory committees to make recommendations to the governor about how the state’s Rescue Plan funds should be spent on infrastructure, including broadband.

There is a long-term solution to the broadband affordability gap that can be found in America’s first gig city. Thanks to Chattanooga’s wildly successful municipal broadband network, EPB Fiber, and its partnership with The Enterprise Center and Hamilton County Schools, over 15,000 low-income students in 8,500 households in Hamilton County are already getting a decade of free high-speed Internet service at no cost through a program known as HCS EdConnect.

It was borne out of the community’s response to the pandemic as local leaders looked to leverage an existing community asset to allow students to participate in distance learning, enable educators to expand educational opportunities outside the classroom, and support parents in pursuing their own professional and personal goals.

It’s an example of the one of the many benefits of having a locally-controlled, publicly-owned broadband network in which the infrastructure is seen as a public good like roads or a water system. It’s an approach that sees broadband infrastructure as something that should be accessible to everyone in the community and not used as a tool to simply benefit those who can afford it.

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We wanted to visually document the power that HCS EdConnect has had in transforming the lives of program participants by weaving together a compilation of video diaries that will give you a glimpse of how a visionary municipal network made this Tennessee county more resilient in the face of the pandemic and ensured no one in their community was left on the wrong side of the digital divide.

The Biden Administration is poised to celebrate the nation's largest telecommunications monopolies today even as these companies do the bare minimum for digital equity while undermining his administration's broadband agenda.

Christopher Mitchell, Director of the Community Broadband Networks Program at the Institute for Local Self-Reliance, had this to say today about the undue influence of Big Telecom and its effort to block the confirmation of GiGi Sohn as an FCC commissioner: 

As we enter the third year of a pandemic that has supposedly redefined the crucial importance of broadband, the Federal Communications Commission has failed to update the definition of broadband it set in 2015. Few expect the FCC to publish accurate maps of where broadband is until 2023. It might help if President Biden seated his third commissioner. 

The Biden Administration took a painfully long time to nominate the most obvious candidate for the position - Gigi Sohn - and has done precious little to have her confirmed in a reasonable time frame. Though it would be easy to blame Republican opposition, the truth is that it simply does not appear to be a priority for the Administration.

We join the effort to praise all companies that are helping move toward digital equity, but if simply discounting the cost of service from cable and telephone providers were sufficient, we might have less of a problem now, 11 years after Comcast launched Internet Essentials. To actually connect everyone, we will need an effective FCC as well as local engagement. However, some of the very companies being praised by the President today are spending millions in lobbying and ad-blitzes to prevent Gigi Sohn from being confirmed and to stop needed investments.

If they succeed in blocking Gigi, they will have confirmed something else: that they are the actual regulator of telecom services and the Biden Administration is not serious about the lofty goals it set in 2021.