Rural Broadband Expansion Unlikely in 2016

Advocates of rural broadband service will ask state lawmakers Wednesday to break a seven-year roadblock and pass a bill this year to let Tennessee municipal electric utilities extend broadband service into areas not served by commercial, for-profit providers.

But House Speaker Beth Harwell said Tuesday she doesn’t see that happening this year. Harwell, R-Nashville, told a group of small-business owners attending a National Federation of Independent Business lobbying day that the Legislature is likely to wait until after the state Department of Economic and Community Development completes a study of the issue that it launched last month before taking action.

The Tennessee Municipal Electric Power Association, comprising the state’s municipal-owned electric utilities, and other groups have scheduled a visit to the State Capitol Wednesday to press for action before the General Assembly adjourns its 2016 session by late April.

“The bill allows community-owned municipal electric broadband to be offered to more people and lets communities decide for themselves what they want broadband to look like,” said the association’s lobbyist, Jeremy Elrod. “Many of our members provide gigabit service, and this will allow them to get gigabit service to people who have no service or limited service.

“Broadband is like electricity in the 1930s. You wouldn’t have told rural people then that they’d have to wait years to get electric service. Why are we doing that with broadband?”

An estimated 422,000 households across Tennessee don’t have access to landline Internet speeds that meet the Federal Communications Commission minimum standard for high-speed broadband (25 megabits per second download capacity and 3 mbps upload). Another 1.6 million Tennessee households have access to only one provider, according to the association.

The Municipal Electric Power Association will be joined by other supporters of rural broadband, including the AARP, the mayors of rural Marion and Perry counties, and state lawmakers who support House Bill 1303/Senate Bill 1134, which would allow the utilities to provide broadband service outside their electric power service areas if those areas are not served by commercial providers.

But an opponent of the bill, a small Internet service businessman from Dayton, Tenn., raised the issue with Harwell at the NFIB gathering Tuesday.

“My business is in telecommunications and broadband; I’ve been coming up here on NFIB and lobbying my legislators three years in a row now,” said David Snyder, CEO of VolState Inc. and Revtel LLC in Dayton.

“I have many thousands of feet of fiber-optic cable undeployed in my business yard in Dayton, Tenn., where I desperately want to deploy fiberoptics,” he said. “But I fear competition from my government more than AT&T. What can be done to settle this issue so I can go ahead and invest?”

“I would love to settle this issue. We’re tired of it,” Harwell said. “I think you have a very legitimate concern. It’s just a tough call because businesses like to provide the service where there’s high clientele and they can get quick customers. Where our problem does exist is in some of these remote areas — I’ve been to every small county and every little city in the state just about — and there are some areas that would be financially difficult for a private company to reach out and make a profit off of providing to those areas. That’s what we’re trying to balance.

“But we continue to work on it. We’re waiting for that study. There are bills put in every year so I can’t promise you anything is going to be done this year in the Legislature,” she said.

Afterward, Harwell told reporters she wants to see the ECD study before acting on legislation.

“My preference would be that the private sector take this over,” she said. “We’ll see if they can come to the plate and offer enough services to our rural areas. If they can, that would be my preference. If they can’t, then I do think it becomes necessary for the public to enter.”

On other issues, Harwell told the NFIB she also does not expect to see legislative action on a gas tax increase this year but added, “It’s something we’re all probably going to eventually have to address.”

She said she was pleased that Gov. Bill Haslam proposed using $130 million in surplus revenue to restore half of $260 million taken from the state transportation fund to balance the state budget more than a decade ago during a revenue shortfall.

She said she expects legislation imposing a higher registration fee on electric vehicles because their drivers don’t pay gas taxes.

And she said there “are proposals being worked on that would look at ways to perhaps lower some taxes in other areas as we gradually increase the gas tax. For example, you could probably lower the Hall income tax (on income from stocks and bonds) as you raise the gas tax. Nobody ever wants to pay taxes, but the gas tax is at least a dedicated fund and everyone uses the roads. So you pay for what you use.

“But I don’t approach this without reservations, because I do see it as more of a tax on the working poor than anyone else,” Harwell said. “I mean rich people are not going to feel it, really, and the poor people aren’t using the roads that much. It’s that working class that’s going to feel this pinch. So it’s not something I think anyone in the General Assembly wants to rush into or do lightly.”

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