North Carolina for many years has been a battleground over government-backed broadband services. The issue seemed to be settled in 2011, when the Republican-controlled General Assembly passed the Level Playing Field Law, which severely restricted local governments’ ability to get into the broadband business.
Fair enough, some legislators say — but what about local governments simply paving the way for private providers to bring broadband service to rural areas?
“I do see a distinction from allowing cities and counties to provide the infrastructure in underserved areas. I do see that as different from being the actual provider,” said Rep. Josh Dobson, R-Avery, who is the sponsor of House Bill 431, which would authorize counties and cities to build and lease facilities and equipment to help provide adequate broadband services to rural areas. “It does not allow, nor would I support — allowing counties and cities to get into the broadband business.”
H.B. 431 — titled the FIBER NC Act — would grant counties and cities the authority to use property taxes to construct such facilities and equipment. The bill requires local governments to conduct a feasibility study, adopt a resolution supporting the action, and post a public notice 10 days before any meeting which would debate and discuss the resolution.
Opposition to local government broadband businesses typically has been a Republican issue, who’ve used million-dollar losses by muni-broadband providers in Salisbury and Mooresville as examples.
But Dobson doesn’t see it that way.
“I know there are some who see this as an ideological issue of government getting involved,” Dobson told Carolina Journal. “I don’t necessarily see it that way because it’s only the government providing the infrastructure. One out of every two students in Avery County that I represent does not have access to internet in their home. And that’s just unacceptable to me. I have not done my job when one out of every two students does not have access to the internet. We have to have an all options on the table approach.”
Meanwhile in the Senate, Majority Leader Harry Brown of Onslow County is sponsoring Senate Bill 310. It allows rural electric cooperatives to get into the broadband business using their existing infrastructure.
Brown agrees his bill should not be an ideological issue.
“I can’t imagine anybody not supporting this because it’s so vital to some of these areas,” Brown told CJ. “These communities are starving for broadband just to be able to compete. We’ve got students out there that have homework assignments where they have to go on the Internet and they don’t have any access.”
It certainly doesn’t hurt that the federal government, under the leadership of the Trump administration, has provided incentives for states to allow electric co-ops to get into the broadband business.
In December U.S. Agriculture Secretary Sonny Perdue announced the Department of Agriculture would offer up to $600 million in loans and grants to help build broadband infrastructure in rural areas of the country.
In the press release announcing the program, Perdue described the USDA’s ReConnect Program as an initiative as “answering the Administration’s call to action for rural prosperity.”
“Under the leadership of President Trump, USDA has worked to understand the true needs of rural communities facing this challenge so we can be strong partners to create high-speed, reliable broadband e-Connectivity.”
With all this federal money available, states are rushing to get in line. At the front of the line is Mississippi, which passed a law in January allowing its electric co-ops to provide broadband for its consumers.
Now North Carolina wants in on the action. Still, there will be no mad rush, Brown says.
“Co-ops are good at what they do, but it’s not the business they’re in now,” he told CJ. “They will take a slow approach to this and make sure it works. They found a way to make it work with electricity, and I think they can find a way to make it happen with broadband.”
Still, critics say they don’t have to look far to see the adverse effects of government’s involvement in broadband: Salisbury has lost about $3 million a year on it Fibrant Network; and Mooresville has annual deficits of $6 million on its MI-Connection network.
In fact, last May Salisbury voters approved a resolution to lease the Fibrant Network to a private company.
The free-market Mercatus Center at George Mason University issued a policy brief in 2017 discussing North Carolina’s concerns with broadband access. In it, policy analyst Brent Skorup recommended some moves consistent with the current proposals, such as using existing broadband rights-of-way to expand capacity.
Skorup also suggested giving rural residents “broadband vouchers” so they could buy service from private providers. Cash payments offer flexibility. They wouldn’t lock counties or the state into building infrastructure that becomes obsolete as technology advances.
Berin Szoka, president of Tech Freedom, a tech policy think tank, suggests H.B. 431’s required feasibility study should “examine the need for the government to get involved in the first place.”
But Szoka added, “in principle, I find it a lot less problematic for governments to build infrastructure that is used by private companies to provide service than to compete directly with private companies.”
Szoka cautioned, though, “it may be a distinction without a difference if the infrastructure is made available to only one reseller.”
It’s worth a reminder that the dynamic has changed in the General Assembly in the past few years. Democrats made gains in the 2018 midterms, and Gov. Roy Cooper specifically mentioned expanding broadband to rural areas in this year’s State of the State Address.
“Too many North Carolinians lack Internet connection they need to apply for jobs, do homework or run a small business,” Cooper said. “We can leverage public/private partnerships to bridge the digital divide and connect all parts of our state to opportunity.”
With this in mind, Brown thinks his bill can become a reality.
“I think there’s a good chance we can move this forward,” he said.