Bowling Looking to Ease Expansion Limits on Government-Owned ISPs

Calling high-speed internet “an essential utility for the 21st Century,” Sen. Janice Bowling wants to ensure rural Tennesseans have access to it.

Sponsored by Bowling and Rep. Kevin Brooks, R-Cleveland, SB1134/HB1303 would allow municipal broadband providers to expand if they “obtain the written consent” of electric co-ops serving the affected areas.

A Republican from Tullahoma, Bowling is pushing to repeal a 1999 state law that restricts municipal electric providers from offering Internet service beyond their designated boundaries.

The Federal Communications Commission also voted Thursday to override those state laws.

However, Bowling told TNReport she wasn’t sure when the ruling would take effect, and would prefer to “go ahead and do what we need to do in Tennessee.”

According to FCC Chairman Tom Wheeler, the federal body’s action cuts away the “bureaucratic red tape” put on municipal broadband networks by states, and fulfills their congressional mandate to expand broadband service. “It is a well established principle that state laws that inhibit the exercise of federal policy may be subject to preemption in appropriate circumstances,” Wheeler said.

Wheeler called the decision “pro-competition,” and said consumers shouldn’t be restricted to “second-rate broadband.”

The Electric Power Board of Chattanooga and other municipal providers want the leeway to provide their government-funded high-speed broadband to areas beyond their electric system’s borders.

However, Tennessee’s private sector broadband providers argue many rural residents do have access to broadband, and the high speeds touted by municipal providers, while fashionable, are unnecessary and shouldn’t be subsidized by local tax dollars.

Tennessee Telecommunications Association Executive Director Levoy Knowles told TNReport Thursday his organization is opposed to the federal government “taking that authority away from the states.” TTA opposes Bowling’s legislation as well.

“We don’t feel like it’s fair to be competing against government-owned facilities in these same areas that we’ve spent millions of dollars in to put forth a modern network and provide our customers high speed internet service,” Knowles said.

TTA is composed of 21 small Tennessee telephone and broadband companies that serve “approximately 30 percent” of rural Tennessee. Nearly all their customers “already have broadband capability available to them” and the Internet service packages they offer often include “the same speeds and services and products that you can get in the metropolitan areas,” said Knowles.

Bowling argues, however, that her measure removes “the regulatory restriction” government has imposed. She believes consumers should have choices of providers “so that the people, locally, can be self-determined.” Those choices should include the opportunity for a publicly funded “municipal electric provider to come in and negotiate a deal,” she said.

While she understands businesses have “a bottom line” to meet, Bowling posits that rural communities shouldn’t be “held hostage” by limited private-market choices. Furthermore, even if the Internet services that are currently available are sufficient, they often aren’t for commercial uses. “It doesn’t work for doctors and it doesn’t work for bankers, it doesn’t work for a lot of the commercial uses of fiber,” she said.

High-speed internet “is to the 21st century what electricity was to the 20th century,” Bowling said. She compared providing broadband service to rural communities to “what the 1937 Rural Electric Administration bill did nationally, to allow these co-operatives.”

“So essentially what I’m asking for is the ability to form these high-speed broadband cooperatives in areas that are under-served or un-served,” Bowling said.

The Tennessee Municipal Electric Power Association, which represents the state’s 60 municipal electric providers, favors Bowling’s bill.

In a recent press release, Jeremy Elrod, TMEPA’s director of government relations likened the issue to a city’s decision on how to best provide power and water and called Internet service “the next utility of the 21st century.”

“Municipal electric broadband should be allowed to be an option for more communities across Tennessee,” Elrod said.

But opponents of Bowling’s legislation contend if the goal is high-speed internet blanketing the state, government officials should get out of the way and facilitate free-market competition between existing providers by reducing regulations.

In December, Knowles said while he understands the desire to extend service to unserved areas, his organization is “opposed to allowing the expansion when there is already service available.”

“Because when my members compete with the municipals, then we’re also on their pole attachments and we’re paying taxes — ad valorem taxes and sales tax and other local taxes — and governmental agencies many times are exempt from those type of taxes,” Knowles said.

However, Bowling called that a “strawman” argument.

“There’s no advantage to being in the same utility group that owns the pole, because their business plan that is approved and checked by the comptroller has to show that that has been paid for,” Bowling said.

But while state-level Republicans seek to strike down the restriction, Rep. Marsha Blackburn, R-Tenn. 07, has introduced legislation to block the FCC decision at the federal level. Blackburn also criticized the FCC’s vote in support of regulating the internet as a “1930s era public utility” under “net neutrality.”