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Overcoming State Barriers to Public Broadband (Contributed)

Knowing the law is the first step.

If you’re a local official wanting to boost your economy, transform how constituents’ kids learn, harness the power of telemedicine and digital-driven health care and run a more efficient government, broadband is your engine for success. And thanks to the Obama Broadband Doctrine unveiled in Cedar Falls, Iowa, last week, the stage is set for you to act. 

The president made clear where he and his administration stand on the importance of broadband to our country’s – and your community’s – future. He also trained a bright spotlight on a collective barrier to broadband deployment posed by 21 states that have varying levels of restrictions on publicly owned Internet networks.

Those of you in states with an anti-public network law, it’s incumbent upon you to fully understand these laws as the first step to navigate, mitigate or eliminate the impact of these laws on your ability to advance broadband in your community. Community leaders in states without such laws also need to understand these laws so you are prepared to fight any attempt by legislators to pass such laws. 

It is important to keep several things in mind. First, get a good lawyer. Incumbent telecom providers and their lobbyists crafted some of the most benign-sounding laws, particularly those written early on, purposely using vague wording to make it easy to sue communities that tried to build a network. Second, at the time many of these laws were written (2003 – 2006), incumbents considered a referendum requirement the kiss of death for muni networks because incumbents knew they could bury a ballot measure campaign in money to ensure its defeat. Third, the average constituent’s lack of interest in broadband and the average legislator’s complete lack of knowledge of technology were the laws’ greatest strength.  

As you review the laws of your state, consider how much has changed since the law was written, even those passed in 2012. Constituents know more about the technology and about the impact of superfast broadband on a community. Local leaders are more likely to be technology-savvy. State legislators from rural communities are genuinely more fearful than a few years back about local economies tanking. In my next article, I'll explore options for dealing with these laws, but for now, try to understand these laws in the context of when they were written and where we are now. In states that don’t have restrictions currently, how likely can laws such as these pass given your current constituents and local leaders?       

Categories of State Laws Restricting Broadband

I’ve arranged the 21 state laws restricting public-owned networks into three categories: the If-Then Laws, the Minefield Laws and the Total Ban Laws. Each category presents communities with a different degree of difficulty in pursuing broadband deployments. 

If-Then Laws

If-Then Laws are fairly straightforward requirements rather than restrictions, and they don’t require communities to jump through as many hoops as other laws in order to move forward: if you meet requirement “x,” then your community can build a network. A couple of laws, such as the one in Washington state, are pretty simple. If a city has its own municipal code, it can build networks and sell Internet access directly to constituents. If yours is a public utility district, you can only sell wholesale broadband services to an ISP that then sells to constituents. Michigan has a complicated If-Then Law designed seemingly more to intimidate by volume of work than fear of a lawsuit. In reality, if a community does good broadband planning, they'll easily comply with the requirements.  

Several states such as Iowa and Colorado require communities to hold referenda: If a ballot measure passes, then the community can build a network. Pennsylvania is one of the states in which communities need to present their broadband wishes to the incumbent for the area. It’s a straightforward “right of first approval” process with clear deadlines by which incumbents must respond. If the incumbent won't build it, then the community can move forward. On the other hand, Wisconsin’s law has a “right of first refusal” component that is worded vaguely with no clear reply-by requirements. But if a community performs a feasibility study with a three-year horizon, then it can build without going to the incumbents. There are additional requirements, though, that will keep Wisconsin's city attorneys busy.  

Minefield Laws 

These state laws were written with the primary intent of prohibiting public-owned networks without coming right out and stating it. The laws create multiple layers of rules that are so onerous as to make compliance a significant financial burden. Or they are worded so vaguely that they become minefields in which one wrong step could trigger incumbents to take legal action. North Carolina and Tennessee are two states with laws of this type. It’s no surprise Wilson, N. C.,  joined Chattanooga, Tenn., in petitioning the FCC to have their respective state laws rescinded.    

“The entire law is designed to create processes that are very difficult and expensive to comply with, or written in wording so vague that incumbents’ lawyers can tie a city up in court for months if not years,” observed Will Aycock, general manager for the Wilson, N.C., Greenlight fiber network. “Most cities in the state don’t have enough lawyers — or enough with telecom law expertise — or the budget to fight these kinds of drawn out battles.” 

Small and rural communities in these states are particularly disadvantaged because they lack legal resources with telecom experience. Mid-size cities such as Lafayette, La., and Chattanooga have greater resources and were able to overcome major legal challenges. But these communities would prefer to avoid the additional costs and time delays while legal battles rage toward uncertain conclusions.   

In general, these laws have so many levels of restrictions and requirements that the best way for cities to move forward — though not the only way — is to get state legislators to reverse all or parts of the laws.

Total Ban Laws

These laws typically are short and unambiguous — public entities are prohibited from providing services, or they can provide services only to a limited audience and only on a wholesale basis. However, there may be loopholes in a couple of state laws that can be exploited.

Missouri’s law bans public entities from owning and providing telecom services, but somehow an exception for broadband was written into the bill. One Missouri city successfully built a network without challenge years ago, and now Columbia recently announced its plans to play the same “Get Out of Jail Free” card. No surprise, Missouri State Sen. Kurt Schaefer, R-Columbia, introduced a bill adding new minefields to the existing law, withdrew it after initial criticism, but is expected to reintroduce the bill soon. We’ll see how that battle goes. 

The state of Virginia bans cities from owning networks, but its law allows cities to form a broadband authority that can own a network. And lest you think this is a benevolent act, the law saddles authorities with lots of restrictions that make it hard to finance a network.  

Texans are very feisty about the fact that their state is not on the list of 21 states with restrictions, even though it has a law that says public entities cannot own or operate telecommunications services. However, as Texas telecom attorney Clarence West pointed out in a filing with the FCC, “Texas cities are not prohibited from providing Internet connectivity, as it is [sic] federally classified as an ‘information service,’ and not a ‘telecommunications service.’ There are Texas cities that have provided Internet connectivity on a citywide basis, and Greenville currently provides both cable and Internet access service.” Now, if the FCC classifies ISPs under Title II as telecom providers that can be regulated, it will be interesting to see what happens to Texas.

Here is the complete list of states that fall within each category. The report How to Navigate, Mitigate or Eliminate the Impacts of State Restrictions on Public Broadband provides links to the text of their respective laws. Next week, I will present some tactics for reducing these laws’ impact on communities. 

If-Then Laws

Minefield Laws

Total Bans

Alabama Florida Arkansas
California Louisiana Missouri
Colorado North Carolina Montana
Iowa South Carolina Nebraska
Michigan Utah Tennessee
Minnesota   Virginia

Craig Settles, President, courtesy of Craig Settles

Gigabit Nation talk show host Craig Settles, author of
How to Navigate, Mitigate or Eliminate the Impacts of State Restrictions on Public Broadband, helps communities develop broadband strategies.


Craig Settles assists cities and co-ops with business planning for broadband and telehealth. He has surveyed economic development professionals nationwide about the impact of telehealth and community broadband, and offers guidance for federal grant proposals for broadband, telehealth, or other digital projects.