A municipal organization warns that a bill passed in a Missouri Senate committee would hinder the development of faster Internet service in southern Missouri.
The bill passed in an economic development committee and will be considered in the full Senate after it returns from spring break next month.
Senate Bill 266, promoted by CenturyLink and other telecommunication providers, limits efforts by city governments in out-state areas to increase broadband connectivity, foster public-private partnerships and increase consumer-friendly services in the broadband market, according to the Missouri Assocation of Municipal Utilities. Three of the state’s largest cities are exempt from the bill.
“This bill is anti-market, anti-consumer and anti-rural,” said Ewell Lawson, Manager of Government Affairs for the Missouri Association of Municipal Utilities. “Why would an out-state community not use existing resources to retain local industry and jobs, promote consumer-friendly utility services and seek to connect the community to the world with high-speed broadband services?”
A recent report prepared just last year by MoBroadbandNow, a state initiative funded by the U.S. Department of Commerce, indicates that Internet speeds are lower in Missouri’s rural areas and regions with generally lower household incomes. At the same time, “cost of even a basic internet connection is very high” in these areas.
The initiative also found that Missourians “have low satisfaction rates with the cost and speed of their Internet connections. This is also true for Missouri small businesses based on results from an online business survey.”
Local officials confirm the study. “Central Missouri Ag Services is an important community partner,” said Kyle Gibbs, General Manager of Marshall Municipal Utilities. “In a rural community like Marshall, agriculture is big business. Being able to provide the necessary broadband services to keep partners like these connected to the world is invaluable, even when private providers don’t.”
“West Plains needs faster and affordable Internet to stay competitive,” said Tom Stehn, city administrator. “Local businesses, banks and educational institutions are asking for more affordable broadband and faster speeds not offered by local providers. In rural Missouri, these companies and institutions play a tremendous role in jobs and quality of life.”
In a February letter to committee Chairman Eric Schmitt, R-St. Louis County, a coalition of private companies and national industry associations said the bill would hinder economic growth, especially in rural areas where private companies are reluctant to invest.
“These communities should be free of artificial barriers, including the cumbersome, time-consuming, expensive and ambiguous requirements,” said the letter signed by Google, Netflix, the Telecommunications Industry Association and the American Public Power Association, among others. The bill was originally sponsored by Sen. Kurt Schaefer, R-Boone County.
The measure would banish such community utility services as early as September unless services were already up and running. The measure effectively stops any community from providing a service or partnering with providers when an existing private service is offered within the boundaries of a city, town, or village, no matter the level, quality, availability or cost of the existing service.
For example, if a provider offered expensive, low-quality broadband service to even a single customer at the edge of a town, the bill would preclude the town from serving the whole community by building its own network or teaming with providers. The bill would also require communities to schedule a costly referendum on any project budgeted above $100,000.
“It’s a wolf in sheep’s clothing,” said Lawson, referencing proponent claims that the bill is designed to limit using local tax dollars to compete against private business.
The legislation requires voters to approve a specific and detailed “revenue stream” for service – eliminating efficiencies of multi-use infrastructure that keeps consumer and citizen costs down – and if the referendum fails to garner majority support, would prohibit the idea from coming up for a second vote until after two years have passed. Beside broadband services, the bill also limits city utility services for trash collection, sewer, water, electric and natural gas.
“Smart cities are looking for new ways to use existing city infrastructure for more providers to enter a community,” said Lawson. “Cities don’t want to compete with the private sector, especially in rural areas, but they need to have the flexibility to step in when necessary to fill voids left by existing private providers in service and choice.”