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Financing Rural Broadband Deployment

Concerning the financing of broadband deployment.
2018 Regular Session
Telecommunications & Information Technology

Section 1 of the bill amends the definition of 'broadband network' to increase the speed of downstream broadband internet service from at least 4 megabits per second to at least 10 megabits per second and the definition of 'unserved area' to refer to an area that is unincorporated, or within a city with a population of fewer than 7,500 inhabitants, and that is not receiving federal support to construct a broadband network to serve a majority of the households in each census block in the area.

Section 2 requires the public utilities commission (commission), in 2019, to allocate 60% of the total amount of high cost support mechanism (HCSM) money that the nonrural incumbent local exchange carrier would receive to the HCSM account dedicated to broadband deployment, and to allocate an additional 10% of the total money that the nonrural incumbent local exchange carrier would receive in each subsequent year until, in 2023, all of the money that the nonrural incumbent local exchange carrier would receive is allocated to the HCSM account dedicated to broadband deployment. Section 2 also removes a requirement that the commission reduce the rate of the HCSM surcharge by a certain percentage of the money transferred from the HCSM to the broadband fund for the deployment of broadband into rural areas. Section 2 requires that the HCSM surcharge rate that existed on January 1, 2018, be maintained; except that, in calendar year 2024, the commission may reduce the rate to ensure that the amount of money collected does not exceed $25 million in 2024. For the period of January 1, 2019, through December 1, 2023, section 2 maintains the amount of support received by rural telecommunications providers for basic service at the level of support they received on January 1, 2017. Section 2 also prohibits the commission from making effective competition determinations in 2019 through 2023 with respect to making distributions of high cost support mechanism money. Finally, section 2 requires the commission, on or before December 31, 2018, to establish a plan to eliminate, on an exchange-area-by-exchange-area basis, provider-of-last-resort obligations consistent with the reductions in the high cost support mechanism distributions for basic service.

Section 3 makes conforming amendments.

Section 4 updates language regarding the use of money from the HCSM for broadband deployment grant applications approved by the broadband deployment board (board) to have money transferred directly from the HCSM to approved broadband deployment grant applicants. Section 4 changes the membership of the board from 16 to 17 members, adding 2 members representing the broadband industry and removing one member representing the public. Section 4 clarifies conflict-of-interest procedures that a board member must follow. Section 4, with regard to the board's grant application process, also:

  • Allows a grant applicant to apply for grants for multiple projects in a single year;
  • Prohibits the board from funding a proposed project that overlaps or overbuilds another broadband project;
  • Clarifies that the board may award a grant for a proposed project that will provide high-speed internet access at measurable speeds of at least 10 megabits per second downstream and one megabit per second upstream or at measurable speeds at least equal to the federal communications commission's definition of high-speed internet access or broadband, whichever is faster;
  • Requires the board to grant an incumbent broadband provider's appeal if the incumbent broadband provider demonstrates, by a preponderance of the evidence, that an area covered by an application does not qualify as an unserved area; and
  • Allows an applicant to amend the applicant's application at any time to remove coverage of an area that does not qualify as an unserved area.

Sections 2 and 5 repeal the commission's functions of administering the high cost support mechanism on September 1, 2024, subject to the department of regulatory agencies' review of the functions through its sunset review process.
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)


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