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VOL. 132 | NO. 20 | Friday, January 27, 2017

Governor Proposes Rural Broadband Expansion for Tennessee

By Sam Stockard

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NASHVILLE – State government will provide private companies with millions of dollars in grants and tax credits to extend broadband internet access while allowing electric co-ops to enter the retail broadband business under legislation Sen. Mark Norris is set to sponsor.

Gov. Bill Haslam and Norris, a Collierville Republican, unveiled the Tennessee Broadband Accessibility Act Thursday, Jan. 26, at Nashville’s Cane Ridge High School, a measure to be proposed in the 2016 session after more than a year of study by the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) and Department of Economic and Community Development.

The plan offers $45 million over three years through grants and tax credits to private companies, including $30 million to encourage expansion to unserved homes and businesses and $15 million in tax credits based on the purchase of broadband equipment for expansion in economically challenged counties.

“One of the paramount concerns we have had is about taxpayer protection,” says Senate Majority Leader Norris. “So we want to provide better access, not bigger government, but taxpayer protection at the same time.”

An unused fund for offering grants will be shifted to the Department of Economic and Community Development (ECD) to deal with franchise and excise taxes and other credits the state will offer, complementing federal grants already being provided, according to Norris.

Thirteen percent of the state lacks access to broadband, a high-speed form of internet service, and 34 percent of rural residents lack coverage at federally recognized minimum standards. Norris said northeast and northwest Shelby County have some “underserved” pockets, but he wasn’t certain how those areas would be affected by the proposal.

Education is another prong of the governor’s proposal, one in which local libraries would be used to help residents improve digital skills and learn more about the benefits of broadband.

“There is no one solution to broadband accessibility to every single Tennessean,” Haslam says. “But this legislation, I think, provides a reasonable, responsible and affordable path to improve accessibility in Tennessee.”

State leaders have opposed efforts by Electric Power Board of Chattanooga to expand its footprint and offer super-fast internet services to residents and businesses in neighboring southwest Bradley County who are stuck in a weak connection area. The state attorney general won a legal battle to allow EPB to spread its service to that area.

Norris, who chairs TACIR, contends allowing electric co-ops to begin offering retain broadband service is the “proper conduit” for quasi-government entities to spread high-speed internet service. Those utilities will be able obtain wholesale internet to provide service “without expanding risk” to taxpayers.

“The incentives the governor mentioned are certainly going to facilitate more expansion and cooperation amongst the private sector as well as the public sector,” Norris said, noting he is already seeing examples of increased competition cutting prices for expansion and service in the Cleveland area.

Covington Mayor Justin Hanson was excited to hear the broadband expansion proposal is “at the forefront” of the governor’s and Legislature’s initiatives this session.

“The Internet has become the infrastructure,” Hanson says, and having access to broadband service will be “huge” for Covington industries, which are the backbone of the city’s economy, as well as several areas with weak connectivity and some parts of Tipton County with no service.

Electric co-ops will be able to buy internet for retail purposes from telephone cooperatives, another private provider or a municipal utility or they could build their own data center, according to Amanda Martin with the ECD.

The Tennessee Cable Telecommunication Association supports the governor’s effort to provide broadband access to all Tennesseans.

“As an industry, we’ve been committed to trying to remove barriers to broadband development, including offering low-cost services to seniors and low-income families,” said Amy Martin, a spokeswoman for the association.

Haslam says it could take two years for the state to see how long it takes for broadband to spread to unserved areas and regions of weak connectivity.

Sam Stockard is a Nashville-based reporter covering the Legislature for The Memphis Daily News. He can be reached at sstockard44@gmail.com.

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