Broadband Internet Update
After holding four town hall meetings across Jefferson County on the subject of broadband internet distribution, three things are clear, 1) the demand for broadband internet service in underserved rural areas is extremely high, 2) broadband is desperately needed by consumers, students, and businesses that are located in rural areas, and 3) the Broadband Accessibility Act (BAA) of 2017 is less than adequate to facilitate competition and spur rapid expansion of broadband service. The act known as Public Chapter 228, signed into law on April 24, leaves regulatory barriers in place that restrict no less than 9 municipal internet providers from providing lightening-speed internet services across Tennessee, a regulatory barrier that limits free-market competition.
The Broadband Accessibility Act also fails to define transmission speed. Proponents of free-market permissive legislation would argue that the new legislation unnecessarily commits $45 million dollars of taxpayer money to a grant program that potentially rewards private businesses and public utilities for providing internet transmission speed as low as 10 Mb/s download speed, 1 Mb/s upload speed. For reference, 10Mb/s is a fraction of the internet transmission speeds that are now common in developing and third-world nations. In fact, Tennessee State Senator Janice Bowling (R), Tullahoma, TN., refers to the current status of broadband regulation as “crony capitalism” a view that is shared by several well informed observers that frequently write on the subject of telecommunications.
Senator Bowling is proposing a simple change to state law that would eliminate the regulatory barriers that limit broadband competition, a legislative change that would essentially create a market structure for broadband in Tennessee that would stand to improve transmission speeds and increase competition among all providers. Since EPB, the Chattanooga municipal electric utility, entered the broadband market offering gigabit speed, other internet service providers in that area have recently increased transmission speed 17 times, as reported by the Chattanooga Times Free Press. The Bowling proposal is founded in Senate Bill 1045, which will go on-notice during the next Tennessee General Assembly session beginning in January. The large well-entrenched communications companies are expected to oppose any such bill that would make broadband prices more competitive and increase availability to consumers, giving state legislators the difficult choice of deciding between the needs of rural citizens and the influence of a well-financed and organized communication lobby.
Meanwhile, Appalachian Electric Cooperative (AEC) is carefully considering a number of options concerning broadband distribution based on the feasibility study that it conducted last year. As reported, the feasibility study indicated high demand for broadband. A variety of business models and proposals are under consideration by the utility; but it will take time for the AEC management and Board of Directors to vet options and settle on a business model. Cooperative utilities in general are known to be risk averse, adding to the build-out time and frustration level of consumers, students, and business owners. For now, legacy carriers enjoy a lucrative market with little or no competition. While the Broadband Accessibility Act does provide authority for electric cooperative utilities to enter the broadband market, and provide “within” and “outside” their service areas, cooperative utilities were never viewed as a competitive threat to private or municipal providers, thus explaining why the lobbyist for the telecommunications industry were so willing to concede market share to the 20+ cooperative utilities in Tennessee.
The following links are provided as a reference to statements made in this article.
Interview with Tennessee Senator Janice Bowling (R), Tullahoma, produced by Videographer Joseph Malgeri, Dandridge
https://www.youtube.com/watch?v=RDZKijDHJ5E
