NASHVILLE, Tenn. (AP) - Gov. Bill Haslam on Thursday proposed legislation seeking to expand access to broadband in rural Tennessee.
The governor’s plan would change state law to allow nonprofit electric cooperatives, which serve about 2.5 million Tennesseans, to offer broadband service to their customers. It would also offer $45 million in grants and tax credits to commercial providers to expand their broadband offerings to areas where they are not yet available.
The proposal would not allow government-owned utilities such as Chattanooga’s Electric Power Board to expand internet access outside their service areas, however, a longtime point of contention.
Haslam said he would rather have private companies offer broadband services than have “government-subsidized entities have the first crack.”
A Federal Communications Commission ruling in 2015 reversed laws in Tennessee and North Carolina that blocked city-owned broadband services from expanding into areas overlooked by commercial providers. But a federal appeals court overturned the FCC in August.
The performance record of municipal broadband providers is mixed, Senate Majority Leader Mark Norris said at a news conference held to announce the new broadband initiative.
“We found several areas where municipalities were given license to expand beyond their borders where they haven’t really been able to fully do so,” said Norris, R-Collierville.
Municipal broadband expansion is also fiercely opposed by private providers such as AT&T; and Comcast, which consider that competition unfair.
There are 23 electric co-ops in Tennessee, covering more than 70 percent of that state. Cooperatives are owned by their customers, while municipal utilities are owned by local governments. About one out of every three rural residents in Tennessee lacks access to broadband service, while urban coverage is estimated at 98 percent.
The governor’s plan does not envision co-ops being able to bundle their broadband plans with cable television packages like the plans offered by Chattanooga’s Electric Power Board.
“The bill is focused primarily on broadband access; it’s not an issue where citizens cannot get cable access,” said Amanda Martin, a special projects manager for the state Department of Economic and Community Development. “That’s available to anybody through satellite TV.”
“Broadband is what drives economic development,” she said. “So that is what the admin is focused on.”
The broadband proposal is Haslam’s second major agenda item for the 2017 legislative session. Haslam last week unveiled his proposal to boost transportation funding in the state, largely through a hike in the state’s gasoline and diesel taxes.
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