A bill to expand broadband to rural communities continued on a wobbly path in the House Thursday. Critics say the bill is not tailored to rural areas and could allow cable companies to expand in urban areas at the expense of local utility companies.
The bill passed the Ways and Means Committee 15-1, despite criticism from the committee’s chairman and municipal utility companies.
Committee Chairman Bobby Pane kicked off Thursday’s hearing on the bill by saying it needed “quite a bit of work.” Pane instructed committee members to look at the tax implications of the bill rather than the policy in the bill, which he thought still needed tweaking.
Polk City Rep. Josie Tompkow sponsors the bill.
“Members, I am one of those 33,000 residents in Polk County without high-speed internet to my house. So, this is a very personal issue for me. It’s one that’s very important to my constituents,” Tomkow said.
Tomkow said the bill (HB 1239) encourages broadband companies to expand to rural areas by creating a path for the necessary infrastructure.
An amendment was added to the bill during the meeting to remove a sales tax exemption, which means the bill will not have a fiscal impact on local governments. Previously the bill provided a tax exemption for equipment used in the expansion.
“The tax implications that were in the bill before you put the amendment in were astronomical,” Payne said.
Charlie Dudley, general counsel of Florida Internet and Television Association, which represents Comcast, Charter, Fox, Mediacom and Atlantic Broadband, said the cable companies support the bill even with the removal of the tax exemption.
“We really thought that creating a tax incentive was a policy we wanted to have a discussion on. We understand it’s probably not the year for that, but I look forward to revisiting that issue when we get a chance,” he said.
In order to achieve the necessary infrastructure for broadband expansion, the bill requires municipal utility companies to allow broadband providers to use the utility companies’ poles. This part of the bill received opposition in past committee meetings because municipal companies would have to pick up costs for certain repairs associated with the additional uses of the poles, costs that could ultimately be passed along to customers.
The bill stipulates that any disputes over the new pole attachments like rates, terms, and conditions between broadband providers and local utilities would be adjudicated in circuit court.
Orlando Rep. Anna Eskamani was the committee’s only no vote. Eskamani said the bill is not tailored to rural communities.
“My interpretation is that the same types of incentives will be available in the more urban areas that I’ve outlined. And so, the fact that there really isn’t an accountability measurement to say, this is only for rural areas, also kind of brings some concern to me, where there could be a benefit for these companies at a loss for the municipals, even in areas that are already well connected,” Eskamani said.
Former Speaker of the House Dean Cannon, now a representative from the Florida Municipal Electric Association, which represents 33 municipal electric systems across the state, said the bill doesn’t do what it set out to do because there is no guarantee any broadband expansion will take place.
“Although the bill purports to be about rural broadband, it, number one, doesn’t cover the rural areas. And, it doesn’t compel even a single extension of broadband service to a single customer,” Cannon said.
Payne also has a utility company background, which he said informed his determination that there were policy issues in the bill.
“Being (among) the electric utility background members, I struggle with this bill quite a bit. Very comprehensive issues going into this bill, but I felt like, without the opportunity to remove the tax piece, that we shouldn’t stand in the way as a committee in moving this bill at least to the Commerce Committee,” Payne said.
Tomkow said she will keep meeting with stakeholders to develop the bill.
“I understand we have a lot of work to do on this bill, and I’m committed to doing so,” Tomkow said.
The bill now heads to its final committee stop, the House Commerce Committee.
Senate companion legislation (SB 1592) is sitting in its final committee, Appropriations.