Tennessee Governor Signs Bill to Expand Rural Broadband Services

April 27, 2017–Gov. Bill Haslam (R.) has signed into law a bill to implement a program that will provide $45 million in tax credits and grants during the next three years to expand broadband in the state. The proposal was part of the governor’s plan to expand broadband access in Tennessee.

“More than 800,000 Tennesseans don’t have access to broadband, and one in three businesses identified it as essential to selecting their location. Spurring deployment in our rural, unserved areas will open them up to economic investment and growth,” Gov. Haslam said. “I want to thank the General Assembly for its overwhelming support, particularly Senate Majority Leader Mark Norris, Sen. Mike Bell, and Rep. David Hawk for carrying this legislation, which provides a reasonable, responsible path to improve broadband access through investment, deregulation, and education.”

The governor has said that his plan will allow the state’s private, nonprofit electric cooperatives to provide retail broadband service and make grant funding available to libraries to help residents improve their digital literacy skills. The governor’s plan includes $30 million in grants to fund broadband deployment in underserved areas and $15 million in tax breaks on broadband equipment. The plan will also authorize rural electric cooperatives to provide broadband service, and allow them to partner with municipal electric service providers. The governor’s plan, however, does not mention broadband service being provided by city-owned utilities.

According to SB 1215, grants awarded through the Tennessee Broadband Accessibility Fund must promote the deployment and adoption of broadband services. The bill was amended before becoming law to lower the minimum download speeds from 25 megabits per second (Mbps) to 10 Mbps, and 1 Mbps instead of 3 Mbps for upload speeds.

According to the new law, grants must be awarded pursuant to criteria developed by the department of economic and community development, with priority given to projects that: “(1) serve locations without access to download speeds of at least 10 Mbps and upload speeds of at least 1 Mbps; (2) propose to acquire and install infrastructure that supports broadband services scalable to higher download and upload speeds (however, this priority shall not take precedence over serving a greater number of locations or larger area); (3) serve locations with demonstrated community support, including, but not limited to, documented support from the political subdivision or the political subdivision receiving designation as a broadband-ready community … and (4) have not received funds through other state or federally funded grant programs designed specifically to encourage broadband deployment.”

The law also provides for a tax credit for qualified broadband Internet access equipment, which means “new equipment placed into service by a service provider to provide broadband Internet access services at minimum download speeds of 10 Mbps and minimum upload speeds of 3 Mbps to locations in a tier 3 or tier 4 enhancement county as determined under § 67-4-2109(a), and includes, but is not limited to, asynchronous transfer mode switches, digital subscriber line access multiplexers, routers, servers, multiplexers, fiber optics, and related equipment.”

SB 1215 was sponsored by Senate Majority Leader Mark Norris (R.), Senate Government Operations Committee Chairman Mike Bell (R.), and others. Sen. Norris said the measure offered “a responsible path to improve access to broadband through investment, deregulation, and education.”

“We need better access, not bigger government,” Sen. Norris said in a recent statement. “Broadband is critical to commerce and the quality of life of every Tennessean and is essential for our current and future education and economic initiatives.” The new law, meanwhile, will allow the state’s private, nonprofit electric co-operatives to provide broadband and cable video services. The co-ops are currently restricted from providing retail broadband services. The legislation prevents the use of electric system assets to subsidize broadband services.

“The co-ops have many years of experience in providing service to rural communities in the state. It’s what they were created to do, so they are uniquely qualified to expand broadband to unserved areas,” Sen. Bell said. -Carrie DeLeon, carrie.deleon@wolterskluwer.com

Courtesy TRDaily