Torpedo legislation aimed at municipal network initiatives don’t usually appear in October, but Michigan’s year-round legislature is making 2017 atypical. Last week, Freshman Representative Michele Hoitenga from the rural village of Manton in Wexford County introduced a bill banning investment in municipal networks.
HB 5099 is short; it decrees that local communities cannot use federal, state, or their own funds to invest in even the slowest Internet infrastructure, if they choose to do it themselves:
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
SEC. 13B. (1) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (2), A LOCAL UNIT SHALL NOT USE ANY FEDERAL, STATE, OR LOCAL FUNDS OR LOANS TO PAY FOR THE COST OF PROVIDING QUALIFIED INTERNET SERVICE. (2) A LOCAL UNIT MAY ENTER INTO AN AGREEMENT WITH 1 OR MORE PRIVATE PARTIES TO PROVIDE QUALIFIED INTERNET SERVICE. (3) AS USED IN THIS SECTION, “QUALIFIED INTERNET SERVICE” MEANS HIGH-SPEED INTERNET SERVICE AT A SPEED OF AT LEAST 10 MBPS UPSTREAM AND 1 MBPS DOWNSTREAM.
The exception allows local communities to engage in public-private partnerships, but the bill’s ambiguous language is likely to discourage local communities from pursuing such partnerships. As we’ve seen from partnerships that have successfully brought better connectivity to towns such as Westminster, Maryland, communities often took the initiative to invest in the infrastructure prior to establishing a partnership. Typically, the infrastructure attracts a private sector partner. If a community in Michigan wants to pursue a partnership that suits the exception of HB 5099, they will first have to grapple with the chicken and the egg dilemma.
Rather than put themselves at risk of running afoul of the law, prudent community leaders would probably choose to avoid pursuing any publicly owned infrastructure initiatives.
Munis Gaining Ground In Michigan
Michigan already has a significant state barrier in place; municipalities that wish to improve connectivity must first appeal to the private sector and can only invest in a network if they receive fewer than three qualifying bids. If a local community then goes on to build a publicly owned network, they must comply with the terms of the RFP, even though terms for a private sector vendor may not be ideal for a public entity.
Nevertheless, several communities in Michigan have dealt with the restrictions in recent years as a way to ameliorate poor connectivity. They’ve come to realize that their local economies and the livelihood of their towns depend on improving Internet access for businesses, institutions, and residents.
In 2013, ”Sugartown,” became the state’s first publicly owned FTTH network. The community’s municipal power and water utility operate the network, which has significantly reduced connectivity costs for local businesses and community anchor institutions (CAIs). Residents used to depend on dial-up, but now they pay about $35 per month for symmetrical 30 Megabit per second (Mbps) Internet access and can obtain gigabit connectivity for $160 per month.
Learn more about Sebewaing, Michigan’s First Gigabit Village, in episode 126 of the Community Broadband Bits podcast.
Just this past summer, Holland decided it would offer services directly to the public and recently decided to expand its pilot project offering FTTH services. Holland also allows other ISPs to offer services to the public via its fiber optic infrastructure. It’s too early to tell if HB 5099 will affect Holland’s plans to expand their pilot project, but they are probably preparing for the worst.
Christopher spoke with Broadband Service Manager Pete Hoffswell for episode 269 of the Community Broadband Bits podcast. They discussed the long history Holland has with its fiber optic network, their plans for expansion, and the plan behind offering services to the public.
The most recent community to take steps toward publicly owned Internet infrastructure is Lyndon Township. Forty-three percent of registered voters in this rural township turned out to overwhelmingly approve a measure to increase property taxes to fund the project. People in the southeastern rural community are fed up with useless Internet access from satellite and DSL. They’re tired of being rejected by the incumbents who refuse to upgrade to high-quality services because the community doesn’t offer the profitability to justify the investment.
Seven communities in Michigan belong to MBC and are searching for ways to improve connectivity in their community. The growing interest and willingness to invest locally in publicly owned networks reveals the problem in rural Michigan. As a legislator from a rural community, it’s disappointing that Hoitenga would rather work for incumbents AT&T and Charter Spectrum than for her constituents.
Fingerprints Of The Telephone Companies
HB 5099 refers incorrectly to “high-speed Internet access” as 10 Mbps/1 Mbps, which are the typical advertised speeds for DSL connections. It appears as though the drafters made a printing error by flip-flopping the speeds for upstream and downstream. As DSL subscribers know, rarely do their connections reach the advertised speeds, especially at peak usage times. Another factor to consider is that 10 Mbps/1 Mbps is well below the FCC’s definition of “broadband,” which is 25 Mbps download and 3 Mbps upload. Once again, policy makers are trying to drive speeds in the wrong direction in a thinly veiled attempt to keep speeds slower so CenturyLink, AT&T, and Charter Spectrum don’t feel pressured to invest to upgrade services. Here we have another legislator going out of her way to satisfy incumbents, rather than allowing constituents to pursue their own initiatives to improve local connectivity.
Republican Hoitenga is Chair of the state’s Communications and Technology Committee, where the bill now rests, so HB 5099 is likely to be heard. If you live in Michigan and want to contact members of the committee to express your displeasure about this bill, you can obtain contact information for all the members at the committee page.
Did She Really Mean It?
In a recent announcement about the public safety FirstNet project, Hoitenga said:
“The continuing amazement around certain technological advances is made up of three core factors – how the technology better connects us all, how it improves our everyday lives and how it makes us safer.”
Hoitenga’s HB 5099 contradicts her statement on FirstNet. If the bill passes it will prevent local communities achieving the factors she considers “amazing” by blocking their ability to tap into high-quality connectivity through local self-reliance.