Part II: The Mississippi Broadband Enabling Act of 2019

In February 2018, Mississippi Public Service Commissioner Brandon Presley announced an $11 million fiber infrastructure project aimed at spanning over 300 miles through 15 rural Mississippi counties. The project was a partnership between cable provider C-Spire and Entergy to bring the emerging fiber-to-the-home technology, which C-Spire had been offering to urban customers since 2013, to rural Mississippians.

Just one year later, Commissioner Presley lauded the strong bipartisan support for his new project, the Mississippi Broadband Enabling Act, which promised to bring fiber-to-the-home technology to the rest of rural Mississippi via the state’s rural electric cooperative associations (ECAs). 

Presley told this author that the success of the legislation was the result of perfect timing. He cited the 2019 Mississippi statewide elections in which candidates (including incumbents) were well aware of the widespread support of Mississippians for universal broadband service availability. 

Perhaps Presley was being modest. In reality, as reported by Geoff Pender in the Clarion-Ledger: “He created a task force that ended up with 1,310 members over 33 counties. … He got 60 county boards and 70 city councils to pass resolutions in favor of allowing rural co-ops to provide Internet service.”

Presley, in fact, succeeded in convincing lawmakers to reverse a 1942 law (enacted less than a decade after the state’s first rural electric cooperative association was established) that had barred ECAs from providing any product other than electric utility service to their customers. But beforehand, he had to win over enough of the state’s 26 ECAs to the idea that they could provide service even to the most remote customers (as they are required to do for electric utility service) without suffering financial losses.  

At the time, only those with crystal balls could foresee the coming COVID-19 pandemic or that Congress – and the Mississippi Legislature – would authorize millions of dollars to make meeting their Internet service obligations that much easier – and less financially risky.

When HB 366 was passed, Presley called broadband “the electricity of the 21st Century,” and hoped for a day when children do not “have to sit in the McDonald’s parking lot to do their homework.” [Again, this was a year before COVID-19.]

Outgoing Mississippi Governor Phil Bryant boasted that, “If anyone wants to know how this bill got passed so quickly talk to the rural electric associations, because we do, and we listen to them.” Lawmakers passed the bill unanimously in the Senate after the House vote had just three “nays.” And with good reason – the ECAs serve 1.8 million of the state’s 3 million people and provide service to half of the state’s electric meters.

Similarly, Mississippi Farm Bureau Federation President Michael McCormick said farmers and ranchers in all 82 counties of Mississippi cited lack of connectivity as a top concern, along with the growing need for telemedicine and distance learning. Moreover, McCormick said, “I’ve talked to some real estate guys, and they tell me five or 10 years ago they would never have someone ask if high-speed Internet is available on a property. Now almost everyone asks the question.”

The 2019 law enables ECAs to establish or allow a separate broadband provider to use their systems to provide service. They can invest or use loans to cover startup costs, but cannot dip into revenues from providing electricity service to subsidize broadband. The law does not require ECAs to offer broadband, and several have so far not opted to do so.

No state funds were allocated for the ECAs, but some federal dollars were already available through existing programs. Then COVID-19 hit, and with it came a cornucopia of federal dollars and programs (see Part III of this series).

Responses by the state’s cooperatives varied widely. The Pontotoc Electric Power Association in February 2020 voted to discontinue its fiber-to-the-home project based on projected costs of $43 to $48 million and a paltry $1.9 million in currently available grant money. But by June 2020 (just before the Legislature voted to pass federal dollars to ECAs) 15 electric cooperatives were already working on plans to build fiber to the home in their coverage areas. All 15 were subsequently awarded one-to-one matching grants. 

An elated Presley admitted that the ECA response “exceeds my wildest expectations. We had hoped we would have a couple step out there and then have a snowball effect.” 

Part III of this report will discuss the federal CARES Act and federal funding for broadband stemming from the COVID-19 pandemic. Stay tuned.