Regulatory Relief Thwarted on Broadband Build-Out

Broadband activists across Tennessee have worked for at least four years to persuade state legislators to enact, repeal, or amend laws that would accelerate the build-out of broadband service, a  critically needed utility for students, small businesses, and consumers. The most prominent idea to accomplish the goal of widespread build-out is the limited deregulation of municipal electric utilities. Lifting overreaching regulations on municipals is viewed by many stakeholders as the most efficient way to promote broadband expansion. Activists point to success in other states that have less restrictive utility laws than Tennessee.

Tennessee “municipals” were given the authority to provide broadband service to their in-city customers by the Telecommunications Act of 1999. So far, ten such utilities have gotten into the broadband game, none more successful than Chattanooga, which provides 10 Gigabit transmission speed at a reasonable price, the fastest on Planet Earth. The problem is that municipal utilities can only provide internet service  “within” their historic service area. Herein lies the problem, and potentially the solution to widespread broadband distribution.

Senate Bill 1045, first proposed in 2017 by Tennessee Senator Janice Bowling (R) of Tullahoma, offered regulatory relief by permitting municipal utilities to rapidly build out broadband service to the state of Tennessee by agreement with other utilities. Broadband activists across the state lined up to support the proposed legislation along with bill co-sponsors Senator Frank Niceley (R) Strawberry Plains, Representatives Jeremy Faison (R) Cosby, Andrew Farmer (R) Sevierville, John Ray Clemmons (D) Nashville, and Kevin Brooks (R) Cleveland. Jefferson County took a leadership role in promoting the bill, with three resolutions made in support by the Jefferson County Commission, the Jefferson County School Board, and the City of Dandridge. Jefferson County Broadband Action Group formed in response to the Town Hall Meetings held by County Commissioner David Seal and activist Joe Malgeri supporting Senate Bill 1045. The House companion bill, HB1410,  was carried by Representative Terri Lynn Weaver (R)  of Lancaster, TN.

On Tuesday both broadband bills were rejected by the Senate Commerce and Labor Committee and the House Business and Utilities Sub-Committee respectively, ending years of work by broadband advocates to see overreaching state regulations lifted. Although no organization or entity came forward to publicly oppose the bills, it is assumed that the well-funded telecommunications lobby was instrumental in thwarting the proposed legislation. This leaves over 800,000 Tennessee Citizens with no access, or limited access to broadband. The Tennessee Electric Cooperative Association and Appalachian Electric Cooperative were officially neutral on the proposed bills, a position that left many broadband activists puzzled, given the fact that many electric cooperative members across the state are without the prospect of having adequate broadband service. Had the legislation passed, municipals and cooperatives could have entered into joint ventures to provide broadband services to rural Tennessee. Broadband grants are available to utilities and private business through the Tennessee Department of Economic and Community Development; but the build-out from these grants is progressing very slowly. During the past year, 9.8 million dollars has been granted statewide, resulting in only 5300 citizens gaining access to broadband. Most well informed broadband activists believe the build-out of service to rural areas will take decades under the current status of state of regulation.