Rural broadband legislation leaves many questions

By Aaron Rice
January 15, 2019

A bill known as “The Mississippi Broadband Enabling Act” is moving fast through the House.

The legislation is designed bring broadband to every corner of Mississippi, so says its supporters.

Who can be against that? Likely not many members of the House. This bill will allow the cooperatives that brought electricity to rural Mississippi to do the same with high-speed internet.

But as with most policy, we should dig deeper beyond the title or the talking points before proceeding. Because this legislation leaves more questions than answers.

To begin, the mission of Electric Power Associations (EPAs), as defined by current law, is to make “electric energy available at the lowest cost consistent with sound economy and prudent management of the business of such corporations.”

Today, EPAs can lease their pole attachments to internet providers. However, because their rates are very high, significantly higher than the rates of investor owned utilities that are regulated by the state, it is cost prohibitive. That is a business decision made by both entities, but it is still an option.

While EPAs cannot provide internet services themselves, even without this legislation they can already create a separate entity and provide the services using their pole attachments.

The truth that everyone knows is that rural broadband is expensive. It has not been feasible in the private sector to offer a product at a price point people can afford or are willing to pay. That does not change because of this legislation.

While the initial focus of EPAs was rural electricity, they serve many suburban areas today as population shifts occurred. They would likely be the prime targets for EPAs, as they will be the easiest to reach, but many of those customers already have the option of AT&T, Xfinity, or C Spire.

Will an EPA run fiber for several miles to reach one or two houses at the end of a gravel road? And can they do that for $50 a month or whatever consumers believe is a reasonable price? Those are some of the questions to be asked.

Because, if it is not feasible as the market has shown, it seems inevitable that this plan will open the door for a ratepayer and state taxpayer bailout.


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