Legislation that would urge electric cooperatives to help bring high-speed internet to rural areas cleared its third legislative hurdle Monday.
But the rural co-ops opposed the bill arguing that recently amended wording in the measure would preclude the cooperatives from competing for the broadband internet business.
In a hurry to vacate the hearing room as required under the new legislative social distancing rules, the House Commerce committee quickly approved Senate Bill 406 without dissent. Committee Chair Paula Davis, R-Baton Rouge, said the measure’s language could be negotiated before the full House takes up what could be the final vote on the issue, if no changes are made.
Jeff Arnold, who heads the Association of Louisiana Electric Cooperatives, said they supported the bill until wording was added that wouldn’t allow co-ops to sell broadband to their electricity customers who are mapped in areas as already "served" by broadband. “The language would restrict us from competing with others in the broadband market but would not stop them from cherry picking (customers) from cooperatives who choose to get in the broadband market,” said Arnold, who as legislator years ago chaired the Commerce committee.
That means state Sen. Beth Mizell, the Franklinton Republican who has been leading the charge to expand high-speed internet into rural areas and is mapped as being in a “served” area, can’t buy her broadband from the co-op whose infrastructure is being used to attach the necessary fiber to house, Arnold said. (Mizell says she thinks her home has been remapped.)
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“The rural co-ops have the right of ways that would ease the installation of fiber,” Mizell said. “The intent of the bill was to grease the skids.”
Her Senate Bill 406 would, essentially, allow broadband companies to string fiber along the co-op’s poles on easements that were negotiated and installed decades ago.
Rural cooperatives were established in the 1930s during the New Deal because investor-owned companies would not provide electricity to sparsely populated rural communities. The co-ops, which serve about 1 million customers in Louisiana, charge what it costs to buy and deliver electricity but without the profit that corporations, like Entergy, charge their customers. Should rural co-ops go into the broadband business, they legally would have to follow the same rate structure.
Arnold said the co-op boards had supported the legislation until amendments pushed by the telecommunications industry were added by the Senate on Friday.
Among those amendments was one that Mizell said clarified definitions so that broadband operators could apply for the federal grants to expand their business into rural areas. Specifically, the language distinguished between “served” and “unserved” on the argument that the federal money is designated for only “unserved” areas.
It’s almost impossible for a business to operate in today’s digital age without a strong, reliable internet connection.
The upshot means that should an electricity cooperative want to expand into the broadband business – as one in northeast Louisiana has tried – they could not offer their electricity customers internet services if those customers fell into a “served” category.
Mizell and Arnold agree that the list of those being “served” is somewhat squishy. Congress and the Federal Communications Commission spent much of 2019 debating over how fast is fast enough. When those definitions change so do the maps of who is "served" and who is not.
The Federal Communications Commission standard now is 25 Mbps download/3 Mbps upload. It is also the goal spelled out in Gov. John Bel Edwards’ aspirational directive from earlier this year. Mbps, or “megabits per second,” measures internet speeds.
Back in 2010, the FCC ruled that the minimum definition for wired broadband was 4 Mbps download and 1 Mbps upload. The Canadian government is in the process of upgrading its minimum average internet speeds to 50Mbs/10 Mbps.
AT&T and Cox, and other providers in Baton Rouge, the state’s second largest city, sell regular internet packages with speeds four times higher than the FCC average at prices about a third lower than the FCC standard speeds offered to the roughly 2,000 people of Golden Meadow.
YouTube needs at least a constant 3 Mbps upload speed but recommends 7. Voice Over IP (VOIP) telephone services needs 3. Netflix needs 25 Mbps for “ultra-high definition” that most of the new televisions include.
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Louisiana’s rural cooperatives already have the ability to sell broadband internet.
One, Claiborne Electric Co-op, tried to do so, but got bogged down in the Public Service Commission. The PSC doesn’t regulate internet services but does set the monthly rates for electricity. The five elected PSC commissioners questioned if the cooperative’s new business venture, based on financing secured by its electrical assets, could led to higher priced electricity for the cooperatives' members. While poring over Claiborne’s books, PSC staffers came across expenditures, pay and benefits for co-op board members that the regulators criticized.
The whole thing ended up in court and Arnold said the other co-ops opted to wait to see how the litigation played out before wading into the internet business.