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Financing Rural Broadband Deployment

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

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 areas that are unincorporated, or within a city with a population of fewer than 7,500 inhabitants, and that are not receiving federal broadband support.

Section 2 requires the public utilities commission, on January 1, 2019, to allocate 20% of the total amount of high cost support mechanism

(HCSM) money that nonrural incumbent local exchange carriers would otherwise receive to the HCSM account dedicated to broadband deployment, and to allocate an additional 20% of the total money that nonrural incumbent local exchange carriers would otherwise receive on January 1 of each subsequent year until, on January 1, 2023, all of the money that nonrural incumbent local exchange carriers would otherwise receive is allocated to the HCSM account dedicated to broadband deployment. Section 2 also removes a requirement that the commission reduce the amount 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 amount that existed on January 1, 2019, be maintained as the surcharge amount; except that, on and after July 1, 2023, the commission may reduce the rate to ensure that the amount of money collected by the surcharge does not exceed $25 million per year. Finally, for the period of January 1, 2019, through January 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, 2016.

Section 3 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 3 also allows a grant applicant to apply for grants for multiple projects in a single year; however, the broadband deployment board may only award an applicant grants for more than one project if money is available for broadband deployment grants after the first round of broadband deployment grants have been awarded and disbursed in that year. Section 3 also prohibits the department of local affairs from implementing a broadband deployment program or approving a grant application concerning broadband deployment unless the board has determined that the program or application does not involve the same or a duplicate of any projects approved and funded.

Section 4 repeals the public utilities 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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