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S.B. 2005, 108th Gen. Assemb., 2d. Sess. (Tenn. 2014) Bill
H.B. 1974, 108th Gen. Assemb., 2d. Sess. (Tenn. 2014) Bill

S.B. 2140, 108th Gen. Assemb., 2d. Sess. (Tenn. 2014) Bill
H.B. 2242, 108th Gen. Assemb. 2d. Sess. (Tenn. 2014) Bill

S.B. 2428, 108th Gen. Assemb., 2d. Sess. (Tenn. 2014) Bill
H.B. 2364, 108th Gen. Assemb., 2d. Sess. (Tenn. 2014) Bill

S.B. 2562, 108th Gen. Assemb., 2d. Sess. (Tenn. 2014) Bill
H.B. 2482, 108th Gen. Assemb. 2d. Sess. (Tenn. 2014) Bill

Photo By: AJ BatacCC BY 2.0

Four bills recently introduced in the Tennessee legislature are in the spotlight for their potential impact on the evolving broadband network landscape. The bills have bipartisan sponsorship and collectively aim to roll back restrictions on the ability of municipal governments to establish broadband networks of their own.

Two of the bills focus on specific localities. S.B. 2005 and H.B. 1974 would expand the municipal electric system’s provision of broadband service in Clarksville, Tennessee’s fifth largest city, while S.B. 2140 and H.B. 2242 would allow Trousdale County  to contract with a rural electric cooperative to provide broadband services.  The other two bills address statewide policy. S.B. 2428 and H.B. 2364 revise the definition of “telecommunications”  in Tenn. Code. Ann. § 65-25-202 to enable electric cooperatives that own dark fiber networks to reach customers who are not currently served by rural telephone cooperatives. S.B. 2428 at 1.  S.B. 2562 and H.B.2482 would facilitate the expansion of municipal utilities’ broadband services in connection with economic development, education, and health care projects. S.B. 2562 at 1.

Following the Supreme Court’s decision in Nixon v. Missouri Mun. League, 541 U.S. 125 (2004), states may regulate municipalities’ provision of telecommunications. Twenty states, including Tennessee, currently impose limitations on municipal broadband. Attorney James Baller, who has been working to curb such restrictions, notes that, in Tennessee, municipalities operating electric utilities can only provide telecommunications services if they comply with voting and other requirements that a private provider need not fulfill.  Further, municipalities that do not operate electric utilities may provide telecommunications services only in “‘historically unserved areas’” and “only through joint ventures with the private sector.”  Baller argues that municipalities “can sometimes serve areas that private entities shun” and provide faster speeds for lower pricing.

On the other hand, private Internet service providers (“ISPs”) have expressed concern about the consequences of expanding municipal broadband.  The Tennessee Telecommunications Association, a network of cooperative and independent ISPs in Tennessee, noted that municipal broadband would “cherry-pick” the more populated areas, “leaving the more remote, rural consumers to bear the high cost of delivering broadband to these less populated regions.”  ISPs like Comcast, which has proposed a merger with Time Warner Cable, have developed pricing changes in response to Google Fiber’s work in cities including Provo, Utah.  Comcast was also involved in litigation challenging the fiber-optic network launched by the electric utility in Chattanooga, Tennessee.

Some states have taken steps that, at least for now, stem efforts to curtail municipal broadband.  A bill that would have banned municipal broadband in much of Kansas lost steam last month when its hearing was canceled, and Georgia struck down a highly restrictive bill last year.

Regarding the outlook of the four Tennessee bills, industry analyst Craig Settles points to their bipartisan sponsorship as a potential asset.  Settles notes that although Republicans have traditionally supported private ISPs, a number of Republicans have endorsed the four bills.  Republican Senator Janice Bowling—sponsor of S.B. 2562, which addresses general expansion of municipal broadband—told Tennessee Watchdog: “It has become the electricity of the 21st century to have adequate broadband access. … The government should provide those things that the people can’t provide for themselves and that the market is not providing for them.”

The Daily Dot, ArsTechnica, and Settles provide further background and analysis.

Posted On Mar - 17 - 2014 Comments Off

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