New Tool Helps Navigate State Broadband Policy
Friday, August 2, 2019
New Tool Helps Navigate State Broadband Policy
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Round-Up for the Week of July 29 - August 2, 2019
The Pew Charitable Trusts released the State Broadband Policy Explorer - an easily accessible database that contains information on state-level broadband policy and legislation. The database is so valuable because state and local leaders can learn from each other to refine broadband policy and legislation, service providers can better understand the broadband policy environment in a state, researchers can now easily conduct analysis on the differences of broadband laws around the country, and the general public can now better recognize how states encourage -- or hinder -- the rollout of broadband. Below, we unpack this new tool.
State Broadband Policy Explorer
Broadband policyland tends to focus on the actions of the Federal Communications Commission and other federal policymakers, but many decisions that influence the availability of high-speed internet connections are made at the state, or even local, level.
“State policy matters because lack of access to broadband is a national issue, but it is felt at the local level,” said Kathryn de Wit, a manager with the Broadband Research Initiative at the Pew Charitable Trusts.
But comparing broadband policy state-to-state has been a challenge. "We realized as we were doing the research to get an idea of what policy looks like across the country that there really wasn't any other kind of tool that gets everything about broadband policy in one place," said de Wit. Pew’s broadband research initiative reviewed state statutes, executive orders, and other governing directives for “broadband” and related terms to create a centralized database on state-level broadband work.
The database allows users to filter results by state, categories, and years. Each entry provides a summary of relevant policy as well as links to find the full text. As you choose categories, a 50-state map illustrates which states have adopted such laws.
"We wanted to make it accessible to everyone from a legislative staffer to your Aunt Betty who's running a community broadband effort on an island in Maine," de Wit said.
As researchers at Pew Charitable Trusts compiled information for the database, they found that state broadband initiatives fell into several distinct categories. These categories themselves provide insight into the state broadband policy environment, as priorities begin to emerge when noticing key differences between states. The categories include:
- Programs aimed at spurring broadband deployment: Different states have different broadband goals. For example, de Wit said Minnesota and West Virginia are seeking “border-to-border universal coverage” while California wants to connect 98% of the population within each of 20 regions. And different goals mean that states have different approaches as well. Some states are setting up task forces and identifying who will be responsible for coordinating broadband deployment efforts, De Wit noted. Some states have a centralized office responsible for managing or coordinating broadband efforts. In others, multiple agencies have jurisdiction over broadband. Some states have written plans, created maps, or identified goals and funding mechanisms for their broadband work; some have almost all of these, while others have few or none.
- Competition and regulation: This category includes laws and rules detailing which entities are allowed to offer broadband and which are not. For example, several states have passed laws aimed at making it easier for electric cooperatives to deploy broadband networks while others are notoriously preventing local communities from building or expanding broadband networks.
- Definitions: States define “broadband service” differently. Definitions are important because they are used to determine which services are eligible for public funding. Some states define broadband by speed, others by technology.
- Infrastructure access. This category focuses on rubber-hits-the-road issues that impact market entry and competition including pole attachments, permitting, and right-of-way.
- Funding and financing. States vary in their funding programs -- we unpack this more below.
Moving forward, Pew Charitable Trusts researchers also plan to explore which state-level policies have been most effective at spurring broadband deployment.
Broadband Funding: Mechanisms, Goals, and Guidelines
Identifying Revenue Sources
States often support broadband deployment through grants and loans to internet service providers, nonprofit utility cooperatives, and local governments. Some, such as Tennessee, offer only grants, while others, such as West Virginia, provide only loans. Virginia, among other states, provides both.
The money for these grants and loans comes from sources that fall into three categories:
- Special and General Funds: Some states have a special, designated fund in which money is set aside each year for broadband deployment. When lawmakers deem it appropriate, they can withdraw from these funds to support broadband deployment efforts. When states opt not to use a special fund, the money for broadband development comes from their general fund. Michigan, for example, appropriated money from its general fund when it created a one-time broadband program in 2017-18.
- State Universal Service Funds: Ten states have state universal service funds (USFs) to support broadband projects. Like the federal government, states initially established these funds to enable universal telephone service but are modernizing these mechanisms to expand internet connectivity.
- Other Revenue Streams: Other ways in which states fund broadband deployment projects include right-of-way fees (charged to internet service providers to place their infrastructure along public sidewalks and roads), civil penalties (such as fines from civil lawsuits against providers), toll road revenue, and legal settlements with tobacco, financial, and telecommunications companies. In Virginia, a legal settlement with tobacco producers is paying to deploy more broadband.
In addition to providing grants and loans, states use other methods to encourage investment in broadband infrastructure:
- Tax incentives and bonds: Sixteen states use special tax provisions to encourage broadband deployment, such as tax deductions or exemptions for companies that purchase broadband equipment, and tax incentives for broadband investment in unserved and underserved areas. For example, Indiana allows municipalities to designate areas as “infrastructure development zones” and exempt broadband infrastructure in those areas from property taxes. Some states allow government bonds—often used to finance public infrastructure projects such as roads, bridges, and water and sewer systems—to also be used to finance publicly owned broadband networks. Such bonds can be issued by the state or local governments.
- Broadband support from other policy priorities: States also support broadband deployment programs with funding streams dedicated to related policy areas, such as community development, housing, transportation, and infrastructure. Because more and more state policy priorities—from expanding access to health care to advancing precision agriculture—are becoming reliant on high-speed, reliable internet access, new ways to finance broadband deployment efforts may result.
Funding Streams: Understanding Goals and Guidelines
While the funding mechanisms that states use are fairly consistent, states have different approaches for distributing funds and encouraging investment. In many cases, the funding stream itself provides guidelines on how the money should be used, as in the case of designated funds. Pew Charitable Trusts identified three trends among state goals for broadband expansion projects:
- Funding is directed to unserved and underserved areas: Most state grant and loan programs fund projects in areas that are unserved or underserved, meaning they lack sufficient broadband access. (The terms “unserved” and “underserved” have varying definitions among states, and sometimes even within a state.)
- “Last mile” projects get the most funding: Most states provide capital for “last mile” connections—the part of the network that connects directly to homes and businesses—rather than for backbone or “middle mile” infrastructure that connects local networks to other network service providers and the greater internet.
- Projects are required to obtain matching funding: Every state except Missouri also requires grant or loan recipients—which can include providers, localities, nonprofits, and rural electric cooperatives—to pay for part of the broadband infrastructure construction, though the required match amount varies by state.
The State Broadband Policy Explorer is an insightful tool for learning about how states are approaching and implementing broadband policy. The sheer breadth of the tool highlights how important states view closing the digital divide. Kathryn de Wit said that, in gathering information for the database, “what we learned is that states really are saying that broadband is a priority.”
“For us, this was about understanding that 50-state landscape of broadband deployment laws. And it provides the basis for our next level of research, which is a deeper examination of how states are addressing those gaps in access," de Wit added. "What we hope, though, is that users will be able to use this tool to learn what other states are doing and how they’re doing it.”
State broadband policy comes in all shapes and sizes. To be most effective, state policymakers should look to one another to find creative ways to expand broadband to those who need it. And now, thanks to the Pew Charitable Trust, we all have a tool to do just that.
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