Two sides on Municipal Broadband bill SB 313

Senate Bill 313, by Majority Leader Chip Rogers (R-Woodstock), which he calls the Broadband Investment Equity Act is running into opposition from the Georgia Municipal Association, Google and Columbia County.

According to Rogers’s press release:

The primary goal of SB 313 is to protect taxpayers and encourage private investment by requiring local governments to engage and educate its citizens through public hearings and special election prior to starting a new communications network.  Additionally, the local government must solicit RFP’s from private providers and show fiscal responsibility through a cost-benefit analysis of its plan.  The Broadband Investment Equity Act bill asserts that when a government entity provides a broadband in competition with a private business, it must play by the same rules that apply to private business.

“Broadband is a vital tool for education reform and economic development.  This bill will allow for robust competition in the communication marketplace and encourage continued economic growth throughout our state,” said Rogers.  “By extending our long-standing commitment to policies that encourage private investment and market-driven competition, we are putting the needs of our citizens above those of government.”

The Broadband Investment Equity Act prevents local governments from discriminating against access of rights-of-way or poles and ensuring they provide reasonable rates, terms and conditions to private providers.  Like private business, public providers are prohibited from paying for communication networks with tax revenue or revenue from any other service provided by local government.  Additionally, the bill requires local government to pay income, sales and property taxes, as well as franchise and right-of- way fees from a separate fund established for the service.

A group that includes Google, and the Technology Industry Association wrote to Georgia leaders to oppose the bill, claiming that

SB 313 will hurt the private sector in several ways: by curtailing public-private partnerships; by stifling the ability of private companies to sell equipment and services to public broadband providers; and by impairing economic and educational opportunities that would contribute to a skilled workforce from which businesses across the state would benefit….

SB 313 would impose burdensome financial and regulatory requirements that will prevent public broadband providers from building the sorely needed advanced broadband infrastructure that will stimulate local businesses development, foster work force retraining, and boost employment in these economically depressed areas.

The Columbia County News-Times also opposes the measure, in part because of a project already underway using federal funds:

That federal program is designed to expand broadband Internet service to rural areas that, because of the up-front infrastructure costs, aren’t deemed profitable by private companies. Our county has plenty of those areas, served at best only by spotty, expensive cellular-based services.

Columbia County’s program wouldn’t compete with private companies. Instead, it uses the federal grant and local sale-tax funding to build that high-speed infrastructure, which private companies can then lease to provide Internet service to underserved areas.

Opposing government broadband, Rogers cites the failure of Marietta’s city-owned broadband initiative

“We’re not outlawing a local government entity (from) doing this…  but if they’re going to compete, then they need to play by the same rules and they need to go to the voters and ask the voters if it’s OK that they spend all these dollars before they go out and spend them,” he says.
Rogers cites the city of Marietta’s money-losing venture with the creation of FiberNet in the late 1990’s. The city finally sold the company in 2004 to American Fiber Systems at a loss of $24 million.
Lobbyists who support Senate Bill 313 minimize the burden on local government of the bill:

First, the taxpayer cost is enormous and often underestimated. From California to Vermont, local taxpayers have been left with millions in deficits because municipalities are not equipped to keep up with the rapidly changing technology necessary to keep these networks up-to-date. Right here in Georgia, Marietta had a to sell its system for a more than $20 million loss.

Second, because GONs often get special tax and regulatory advantages, they keep private competitors from ever investing in an area. Why would private companies choose to compete unfairly with the government when they can take their scarce investment dollars elsewhere. Not only does this mean fewer jobs in these local communities, but because public networks often fail, it means these residents may forever be left without broadband. It at least means a further, or interrupted, delay in access.

Contrary to some rumors, SB 313 would not prevent local lawmakers from building GONs. All the bill would do is ask that they hold public hearings on the plan and put it to a vote. And, if the GON would compete against a private network, it would require both public and private networks compete on a level playing field.

For the sake of the economy, and for the sake of greater broadband access, Georgians should demand as much. And Sens. Bulloch and Hill should require it.

Local governments note that broadband is necessary for economic development.

“There’s nobody that will even look at you, will come to an industrial park or a county that doesn’t have that (broadband) infrastructure in place.”

“The biggest challenge for rural populations is the business case, the return on investment for telecom providers,” said Calhoun. [Rich Calhoun, who directs the broadband program at the Georgia Technology Authority.]

I have two concerns with the measure. The first is the applicability of lessons learned in Metro Atlanta across the state. There appears to be an increasing sentiment among some in the General Assembly to fix all local problems with statewide “solutions.”

My second concern is that without maximum flexibility, rural areas may be left behind, without modern broadband access. Last year, AT&T appeared before the Georgia Public Service Commission. Commissioner Doug Everett asked AT&T’s lawyer whether the company was interested in serving small communities that are currently served by local telephone companies. The company’s lawyer simply said, “No.”

3 comments

  1. Max Power says:

    My second concern is that without maximum flexibility, rural areas may be left behind, without modern broadband access. Last year, AT&T appeared before the Georgia Public Service Commission. Commissioner Doug Everett asked AT&T’s lawyer whether the company was interested in serving small communities that are currently served by local telephone companies. The company’s lawyer simply said, “No.”

    Right and that’s the key. In general capitalism while great with scarcity does a pretty poor job providing universal service. We have to decide if as a policy we want universal broadband access across the state. If we do there are only two routes, government sponsored monopoly or government provided service.

  2. Scott65 says:

    Lets talk about the meat of what Rep Rogers is telling here. This will erect barriers to local communities who chose to wire themselves. It also (by requiring localities to seek a private company to run it) effectively gives the deep pocketed incumbents the ability to bleed local communities by tying things up in court and deprives the locals from paying back the bonds used to build these networks out by sucking up last mile revenue and will also keep prices high (notice the word BONDS…not tax payer money). AT&Ts own CEO stated quite plainly that they had no intention nor any plan to wire rural communities. Also this bill defines broadband as 200kb/s…thats dial up territory. At that speed most internet services we all have come to enjoy such as YouTube, sharing family photos, not to mention netflix would be totally out of the question. It would probably take at least a minute for this page to load. How on earth is that good for business??? It is so obvious this is pay to play by the big ISPs…they dont want to wire communities, but the locals damn well better not do it either. This is a bill for a nonexistent problem. Oh, and btw…the big ISPs dont have to play by the same restrictions imposed on the locals…level playing field, yeah right

    • Engineer says:

      I agree with you there. Real broadband (by that I mean, useful broadband) speeds start at 1.5 to 3 Mbps (although 10+ Mbps should be what they should work for, so they are planning for future growth/usage). Anything below that and you might as well be on dial-up. In today’s world, access to high speed internet is as important to commerce and increasing the standard of living as electricity and telephone were at the turn of the last century.

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