OLR RESEARCH REPORT
August 10, 2007
PROMOTING HIGH-SPEED INTERNET ACCESS
By: Kevin E. McCarthy, Principal Analyst
You asked for description of initiatives in other states to promote access to high-speed internet, particularly in rural areas.
Many states have adopted initiatives to promote broadband access, which allows residents and businesses to connect with high-speed internet service, among other things. Broadband access can be provided by several technologies, including digital subscription lines (DSL), fiber optic cable lines, and wireless technologies. Among the types of measures that have been adopted are the creation of broadband development authorities, providing funding and tax incentives for broadband access, and favorable regulatory treatment for telecommunications companies that provide this access.
This memo addresses initiatives in nine states (Florida, Georgia, Maine, Maryland, Massachusetts, Mississippi, North Carolina, Utah, and Vermont) that have targeted rural areas and other areas with limited broadband access. Additional information about broadband initiatives is available from the National Conference of State Legislatures at http://www.ncsl.org/programs/lis/legislation/broadbandstatutes.htm, which is the source of much of the information in this report.
Fla. Stat. § 220.183 provides a credit against the sales tax for firms that make “community contributions”, including investments to increase high-speed broadband access in rural communities with enterprise zones, and projects that result in improvements to communications assets that are owned by a business.
The legislature established the OneGeorgia Authority to assist the state's poorest areas. The authority is funded from one-third of the state's tobacco settlement, and the state expects that $1.6 billion will be available over the 25-year term of the settlement. The authority's investments are targeted towards rural communities.
In 2006, Governor Perdue and members of the authority's board approved regulations for a new financing program to bring high speed broadband access to rural Georgia. The Broadband Rural Initiative to Develop Georgia's Economy (BRIDGE) fund will provide grants for publicly owned infrastructure based on the number of rural counties receiving new or enhanced high speed broadband services. The BRIDGE fund will grant $200,000 for single county projects and $400,000 for projects affecting two counties. Regional projects serving three or more counties will not have an award maximum. Funding will be determined based on the strength of the regional application, including technology design, strategy and sustainability. Grants can be used for technical assistance, engineering and planning, technology infrastructure, machinery and equipment, and real property acquisition. The authority also provides interest-free loans to encourage extension of broadband service to underserved rural areas. Further information about this program is available at http://www.onegeorgia.org/bridge-web/index.html.
Legislation adopted in 2006 (35-A Me. Rev. Stat. Sec. 9201et seq.)) creates the ConnectME Authority to stimulate investment in broadband infrastructure in unserved or underserved areas. The legislation allows the authority to collect a tax of 0.25% of the revenue received by communications providers in the state, which goes into a special fund. The legislation requires the authority to, among other things, expand the availability of broadband to residential and small business customers in unserved or underserved areas. It can do so through partnerships, grants, direct investment, loans, demonstration projects, and other appropriate means, in a competitively neutral fashion that does not give preference to any one technology.
Legislation passed in 2006 establishes the Rural Broadband Assistance Fund (Md. Ann. Code art. 83A § 5-1902) to help establish broadband communication services in rural and underserved areas. It also establishes the Rural Broadband Coordination Board (Md. Ann. Code art. 41 § 21-101 et seq.) to encourage the deployment of broadband infrastructure in these areas. The board is responsible for reviewing and approving the disbursement of money from the Rural Broadband Assistance Fund and other approved public and private resources. The board works with public, private, and nonprofit entities to obtain, coordinate, and disseminate resources to establish broadband communication services in these areas. In addition, Md. Transportation Code Ann. § 8-654 exempts non-profit organizations from rights-of-way charges when they install broadband infrastructure in these areas.
Mass. Gen Laws ch. 40J Sec. 6C establishes a special fund to finance wireless and broadband development activities. Mass. Gen Laws ch. 23A, § 3 creates a division of wireless and broadband development within the state office of business development. The director of this division is responsible for creating a plan to ensure that services are deployed throughout the state.
As discussed in OLR Report 2007-R-0406, this fund has been used to expand broadband access in the rural western part of the state.
In August 2007, the state announced a $25 million plan to bring broadband to 32 rural communities that do not have access to cable or DSL service. The plan will be funded through general obligation bonds and managed by a new division within the Massachusetts Technology Collaborative. The plan is designed to create a new incentive for private industry by underwriting part of the costs of providing service in rural areas. Further information about this initiative is available in the August 2, 2007 edition of the Boston Globe (www.boston.com).
The Mississippi Broadband Technology Development Act (Miss. Code Ann. § 57-87-1 et seq.) provides investment tax credits, ranging from 5% to 15% over ten years, with the greater credits going to those companies investing in the least populous regions of the state. The incentive package is available for investments made between June 30, 2003 and July 1, 2013. The tax credit can be used for nine consecutive years after the year in which it is earned.
The act also amends the law to allow that the sale of equipment to telecommunications entities made during the eligible period and installed for use in broadband deployment be exempt from one half of the sales tax. For the same sale made for use in the most rural areas in the state, the sales tax is waived.
In 2000, the North Carolina legislature created the Rural Internet Access Authority, which subsequently was renamed the e-NC Authority. The authority operates with support from a coalition that includes the North Carolina Rural Economic Development Center, the legislature and state government, the telecommunications industry, non-profit organizations, and individuals. The authority's goals include:
1. providing high-speed internet access (at least 128 kilobits per second for residential customers and at least 256 kilobits per second for business customers) at competitive prices to all North Carolinians;
2. significantly increasing the numbers of individuals, businesses and organizations who own computers and who subscribe to the Internet;
3. establishing telecenters located in the state's most economically distressed areas;
4. establishing a web site to provide information on Internet and telecommunications services, how they can be obtained and what kinds of services will be available in the future;
5. developing Internet applications that improve government services in areas such as education and health care; and
6. encouraging potential Internet service providers to participate in the effort, regardless of the technologies they employ (telephone, cable, wireless, or satellite).
The authority has established seven business and technology telecenters and has identified potential areas for two additional sites. Telecenters are located in the state's most rural areas and provide free high-speed internet service to the public and a variety of fee-based business and technology services to local nonprofit organizations and businesses. The telecenter system offers employee training, state-of-the-art office space, technology expertise and business advice.
Starting in 2001, the authority began its e-communities program by awarding $10,000 planning grants to all 85 rural counties and the Eastern Band of the Cherokee Indians, along with extra $5,000 public engagement grants for particularly distressed counties. The program grew to include public access and digital literacy training grants, and e-communities implementation grants. In addition to these grants, the original program offered extensive training for communities, participants, and program advocates.
Further information about the authority and its programs is available at http://www.e-nc.org/.
Legislation passed this session (Acts Ch. 37) establishes a restricted account within the General Fund to be used for grants to providers deploying broadband service in rural areas, and appropriates $1 million for this purpose. It defines rural areas as municipalities or unincorporated areas with a population of 10,000 or less. The broadband service must be provided by wireline technologies (i.e., not by wireless or satellite) and transmit date at no less than 256 kilobits per second.
Legislation passed this session (Act no. 79) establishes a “Vermont Telecommunications Authority” including state officials, public members appointed by the legislative leaders, and a chair and vice chair appointed by the legislative leaders and the governor. It directs the authority to, among other things, identify where broadband services are not available and the infrastructure needed to serve these areas, identifying the types and locations of infrastructure necessary.
The legislation gives the authority the power to:
1. establish partnerships or contracts with providers of telecommunications services and related facilities to bring service to people in unserved areas;
2. provide financial assistance to service providers and projects, either as loans, grants, or indirect financial assistance;
3. construct, own, and provide communications facilities and infrastructure such as fiber optic cables, towers, and wireless radio spectrum for use by multiple service providers; and
4. issue revenue bonds to raise capital for these purposes;
The act also revises state and local land use permitting processes applicable to structures and antennae necessary to provide wireless broadband service, with the objective of reducing the time and expense necessary for communications service providers to construct those facilities.
The act continues the Broadband Development Grant Program to distribute $200,000 appropriated in the bond bill. It authorizes and directs Department of Information and Innovation to develop and coordinate a pilot project, to evaluate the use of satellite- and land-based technologies to provide next generation wireless and broadband services to rural communities in northeastern Vermont, northwestern New Hampshire, and southern Quebec. It authorizes the Public Service Board to accept from cable television companies, in lieu of mandated cable television line extensions, commitments to provide services or facilities in support of entities that will extend broadband services to unserved areas of the state.