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Rural broadband expansion bill clears General Assembly

By Beau Evans

Capitol Beat News Service

A measure aimed at making broadband internet service more available in rural parts of Georgia gained final passage in the General Assembly Monday.

The state Senate passed House Bill 244 in a 31-22 vote after a last-minute change was struck down that would have put a five-year sunset date on the legislation, which opponents argued would gut the bill.

Broadband providers have argued that deploying broadband service into unserved rural communities is prohibitively expensive in part because the electric membership corporations (EMCs) that own utility poles have charged telecom providers $20 and more to attach broadband wire or cable to each of the poles.

Those installation rates are far higher than what Georgia Power charges for service attachments to its poles, in some cases more than three times as high, said Sen. John Kennedy, R-Macon.

The bill, sponsored by Rep. Ron Stephens, R-Savannah, has been pitched as a way to reduce those costs by allowing the state Public Service Commission to determine rates, fees and other contract terms in agreements between broadband providers and the EMCs, which serve more than 4 million people in Georgia largely in rural areas.

Backers of the bill contend state regulators would serve as an independent go-between to set pole installation rates to help drive down costs and pave an easier path for cable companies to expand the reach of broadband in Georgia.

“All it does is send it to an arbitrator,” said Kennedy, who carried the bill in the Senate. “It doesn’t cut in favor of the EMCs or against them. It doesn’t cut in favor of the cable company or against them.”

But opponents have worried the rate change could hit customer-owned EMCs too hard and force them to increase monthly bills.

Senate Majority Whip Steve Gooch, who brought an amendment to the bill Monday, framed the EMCs as smaller nonprofit entities that should not have their finances capped.

“I just do not believe that the answer is going to be to take a dip of a wad of cash out of the pockets of a bunch of nonprofit co-ops that are governed and elected by the people you and I live with at home,” said Gooch, R-Dahlonega.

Gooch’s amendment called for letting state regulators consider whether broadband service was being taken out to unserved areas when deciding how to establish an EMC’s pole attachment rate. It also would have required EMCs and broadband providers to submit annual reports to the state on how they are promoting internet expansion in unserved areas.

“We need to know if it is going to work or not,” Gooch said Monday.

Kennedy argued the amendment would give EMCs a potential backdoor to continue charging higher rates, while putting a sunset provision in the bill would discourage telecom providers from investing in broadband deployment.

“Are you going to make that investment when you know your cost is only going to be fair for five years?” he asked. “They’re trying to shackle the hands of the people who are trying to get broadband out.”

Several lawmakers, including some from rural areas, also spoke out against Kennedy’s bill on grounds it would hurt the member-owned EMCs.

Sen. Bill Heath, R-Bremen, argued EMCs should be allowed to make turn a profit since their services directly benefit local communities, both financially and by keeping the electricity running.

“It goes to the people that own that company who are members only because they’re being served by that company,” Heath said Monday. “It’s not going to some shareholder from New York City that’s bought an interest in this and is profiting.”

Despite disagreements, Senate lawmakers passed the bill with Democrats joining several Republicans to push the measure forward.

Gooch’s amendment failed by a narrow 24-27 vote.

The bill passed by the Senate Monday follows legislation passed last year that permitted EMCs to start deploying broadband to rural customers.

Expanding broadband into rural and other underserved parts of the state has been a top priority on both sides of the aisle at the General Assembly in recent years, though lawmakers have disagreed on how best to do it.

Telecom industry representatives have pledged to launch a major investment in rural broadband if the EMCs were to lower pole attachment prices. That includes a pledge from Comcast to spend $20 million on broadband deployment in rural Georgia over five years if the attachment fees were reduced enough to justify the cost.

Monday’s debate in the Senate was the second standoff between lawmakers over Stephens’s broadband bill.

Earlier in this year’s session, Senate lawmakers killed a separate measure brought by Kennedy because of sudden changes – also proposed by Gooch – that would have made broadband installation free in rural areas but not in suburban communities.

Stephens’ bill was quickly tapped in the House to give lawmakers another chance to pass legislation on broadband costs before the 2020 legislative session wraps up later this week.