Broadband Laws

The Broadband Equity Access and Deployment (BEAD) program has $42.5 billion available to cover some of the costs of bringing broadband to unserved and underserved rural areas. States will administer the program but must first have a plan approved by the NTIA and, as new research from BroadbandNow shows, some states face an important hurdle as they prepare their plans – a hurdle that involves anti-municipal broadband laws.

Twenty-one states have laws in place that prohibit or restrict municipal broadband networks, BroadbandNow notes. And those laws are at odds with rules for the BEAD program, which say that states must disclose whether they will waive anti-municipal broadband laws, including laws that either prevent municipalities from applying for BEAD funding or that “impose specific requirements on public sector entities, such as limitations on the sources of financing, the required imputation of costs not actually incurred by the public sector entity, or restrictions on the service a public sector entity can offer.”

If a state does not plan to waive the laws, it must describe how the laws will be applied in connection with the application process. And, according to the researchers, the NTIA has included language in the BEAD rules that could enable municipalities to apply for funding directly if their state will not consider their applications.

The upshot, according to the researchers, is that recalcitrant states “will almost certainly delay the timeline for receiving funding.”

At least one state – North Carolina – has “repeatedly indicated that it does not want municipal operators to manage telecom networks in the state,” BroadbandNow notes.

BEAD Municipal Broadband

Anti-municipal broadband laws have been a controversial topic for a decade or more. Supporters say municipalities often are the only entities willing to build networks in some areas. Opponents point to several municipal network projects that have failed, with potential risk to taxpayers.

Several developments in the last few years appeared to have shifted the balance toward municipal networks, with some states reversing anti-municipal network legislation and others passing laws designed to encourage municipal networks.

Driving this trend is a big rise in electric cooperative broadband networks. Another driver is the American Rescue Plan Act (ARPA), which gave funding directly to municipalities that the municipalities could use for a variety of purposes, including broadband.  

Nevertheless, BroadbandNow found 17 states that have restrictive legislation against municipal broadband networks and four additional states that have “other forms of roadblocks in place that make operating municipal networks more difficult.”

The 17 states with the most restrictive legislation, according to the researchers, are Alabama, Florida, Louisiana, Minnesota, Missouri, Montana, Michigan, Nebraska, Nevada, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Wisconsin. The four states with some roadblocks are Iowa, Colorado, Oregon and Wyoming.

Additional details about each state’s restrictions can be found in this blog post about BEAD municipal broadband issues.

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