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Broadband and the 2022 Missouri Legislative Session

By Marc McCarty

The regular session of the 2022 Missouri General Assembly is getting underway, and in terms of broadband legislation, it promises to be historic both in scope and in the amount of the public investment.

Governor Parson’s Proposal

A major part of the work this Session will be addressing Governor Parson’s spending priorities, and among those will be the $400 million proposed appropriation for broadband from the State’s share of American Rescue Plan Act (ARPA) funds.

I’ve written here and here about how ARPA funds provided directly to counties and municipalities can be used for broadband planning and infrastructure projects. Last Friday, the United States Treasury confirmed its earlier guidance on the use of these funds for broadband in a set of final regulations. The state received a separate distribution of money from the Federal government under ARPA as well.  The state’s share is $2.6 billion. The first $1.3 billion was distributed last fall, the balance will be available to the state later this calendar year.

How the $400 million is to be allocated will be outlined in greater detail in the Governor’s State of the State address on January 19th, but it is expected to be heavily weighted to broadband infrastructure grants (both last mile and middle mile broadband infrastructure) with lesser amounts provided for adoption and technical assistance. Officials with the Missouri Department of Economic Development have stated that they hope to have grant program documents in draft form by late spring, so that applications can be submitted around the beginning of the new fiscal year (July 1), assuming funding has been approved by the General Assembly.

There also are several bills related to broadband pre-filed last December, that will be considered during this Session.

Senate Bill 981

While it’s relatively short and simple, SB 981 might be the most consequential broadband bill this session, not so much because it creates a new program for funding broadband, but simply because it makes existing legislation potentially far more useful. The bill changes the definition of what it means to be without adequate fixed wired or wireless internet service by changing the definition of an “unserved” or  “underserved” location. This is important because state funding for broadband and several special financing tools for broadband infrastructure investment are available only for unserved or underserved locations.   

Currently, areas lacking service at data transfer rates (speeds) of at least 10 megabits per second (Mbps) download, and 1 Mbps upload are (10/1 Mbps) are considered to be “unserved.” Locations with fixed wired and wireless service of at least 25 Mbps download and 3 Mbps upload (25/3 Mbps) are considered “underserved.”

SB 981 increases the “unserved” definition to 25/3 Mbps (25 Mbps download and 3 Mbps upload) and the underserved  definition to 100/20 Mbps (100 Mbps download and 3 Mbps upload).   These new standards are the same as those incorporated in the Infrastructure Investment and Jobs Act (the IIJA). SB 981 also ties the unserved/underserved definition to future increases in the definition of broadband used by the Federal Communications Commission – the  FCC.

Why does this matter?  Many folks discovered during the pandemic that internet service which technically qualified as “broadband” (currently 25/3 Mbps) was not sufficient to perform critical tasks like telecommuting, online learning, and high-definition video, particularly if two or more folks were attempting to access the internet from the location at the same time. So, raising the standard to a level more able to serve household needs today, and making further increases dependent on FCC guidance as internet-based technologies require even higher service levels in the future, should dramatically increase the number of locations in the state that are eligible for financial assistance or special funding options today, and make the statutory definition capable of adapting existing programs to meet future needs.

The definition of unserved and underserved applied originally only to the Department of Economic Development’s broadband grant program. However, those same definitions now are cross-referenced in legislation that specifically permits certain broadband infrastructure projects to be financed by Community Improvement District, Neighborhood Improvement Districts (2020) and Broadband Infrastructure Improvement Districts (2021). Hopefully, if this legislation passes, the Department of Economic Development will quickly move to adopt procedures specifying how projects authorized under these laws can obtain confirmation that they are in an “unserved” or “underserved” area, so this legislation can be used effectively.

House Bill 2016     

Speaking of Broadband Infrastructure Improvement Districts, there’s legislation to make some changes here as well. The changes would allow any political subdivision of the state (not just municipalities) to form a Broadband Infrastructure Improvement District and allow for admission of rural cooperatives and investor-owned utilities as “partners” in the District.

Senate Bill 990

This Bill seeks to address the issue of charges for attaching fiber or other types of internet cable to existing utility poles that are owned by municipal utilities and rural electric cooperatives. Internet service providers (ISPs) often wish to attach their wires or cable to these poles in order to connect to homes and businesses. The problem is that the added weight or the need to separate data and power lines on the pole, often means the poles need to be replaced or “made ready” before the attachment can be made. Some internet service providers have complained that they are being charged too much for this and, of course, municipal utilities and rural cooperatives have a different perspective.

SB 990 seeks to address this by barring municipalities and rural electric cooperatives from charging an ISP for pole replacements in situations where the pole needed to be replaced for safety or other reasons (unrelated to the ISP’s need to connect) or where the pole was scheduled for replacement within two years of the proposed attachment. To address the concerns of municipal utilities and rural electric cooperatives, the bill would create a new fund to be administered by the Missouri Department of Economic Development that could cover up to 50% of the cost of pole replacements. Money for the new fund would need to be separately appropriated by the General Assembly or funded through federal grants or other contributions.

House Bill 2052

House Bill 2052 would establish a new “21st-Century Missouri Broadband Deployment Task Force” composed of representatives from government, trade associations telecoms, MU Extension and other ISPs. This task force would evaluate the status of broadband deployment, the process used to finance deployment, and make recommendations for improvement to the General Assembly annually over the next several years.

There also are several bills making “return appearances” this session – having failed to gain passage in prior sessions.

House Bill 1518

Not every broadband bill relates to investing public money to fund and expand broadband infrastructure. House Bill 1518 addresses the politically-charged issue of “net neutrality.” Similar legislation has been proposed  for the past several sessions and the issue has been debated at the FCC for the past ten years or more. The issue is whether and when, ISPs should be permitted to prioritize the transmission of certain types of data through the internet over that of others. Prioritization can become an issue when a large number of users are attempting to access the ISP’s network at the same time, and in some cases, prioritization could degrade the quality of service enjoyed by customers whose data was not given transmission priority.     

Democrats and a number of public advocacy groups generally favor laws and/or regulations mandating “net neutrality” (no prioritization of data), and most Republicans, along with the ISP industry, believe ISPs should be permitted to offer certain users or data priority over that of others. Laws similar to House Bill 1518 have been passed in a number of states but the ultimate resolution may lie with the federal government, because arguably Congress – and not the individual state legislatures — should decide the issue for the nation as a whole.

House Bill 2015 & Senate Bill 848

These identical Bills seek to authorize investor-owned regulated public electric utilities to offer broadband internet service.  If enacted, the “Electrical Corporation Broadband Authorization Act” would permit investor-owned electric utilities to use their existing internet assets (primarily fiber optic cable currently used to manage the power grid) to provide broadband internet service to others in certain situations. Passage of the legislation has been hampered in the past by the complexity of determining what role the Public Service Commission should play in contracting, customer rate setting, and accounting for shared expenses.

Background – Implementation of Federal Legislation — IIJA

The work of the General Assembly takes place in the background of work by federal government agencies – primarily the National Telecommunications and Information Agency (NTIA) and the FCC to implement distribution of the $65 billion appropriated for broadband under the Infrastructure Investment and Jobs Act. As discussed previously, the IIJA will rely in large part on individual states to develop plans to distribute funds for broadband access and to encourage broadband adoption.  For this reason, efforts to develop the infrastructure within state government and their partners to efficiently work to expand broadband access and adoption this legislative session, likely will be a critical first step, and a model for applying much larger distributions of funds from the federal government in the future.     

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