Legislators step up pace of move to rural broadband

Plan would transfer money from state fund that subsidizes phone service

James Anderson
Associated Press
Posted 2/9/18

Colorado's Republican-led state Senate gave initial approval Feb. 7 to a bill that would expedite the construction of high-speed broadband service in rural areas by taking money from a state fund …

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Legislators step up pace of move to rural broadband

Plan would transfer money from state fund that subsidizes phone service

Posted

Colorado's Republican-led state Senate gave initial approval Feb. 7 to a bill that would expedite the construction of high-speed broadband service in rural areas by taking money from a state fund that has long subsidized rural telephone service.

Rural broadband is a top session priority for lawmakers and for Gov. John Hickenlooper, who acknowledge that Colorado's eastern plains, Western Slope and many mountain towns have missed out on the economic boom that is centered in metropolitan Denver.

Republican Sens. Don Coram of Montrose and Jerry Sonnenberg of Sterling argue their bill will boost economic development and curb depopulation of rural Colorado by providing jobs in an economy that runs on broadband. Also co-sponsoring the bill are Democratic House Speaker Crisanta Duran and House Majority Leader KC Becker.

Beneficiaries are many: Cattle ranchers and feeders who must sell their goods in real-time markets; pupils with online homework; patients who live hours away from hospitals and around-the-clock care centers; small towns seeking grants to revitalize their main streets; and even sportsmen who must get their hunting licenses online.

“Broadband is what will level the playing field, where rural Coloradans can be participants rather than spectators in a booming economy,” Coram said.

He noted that some constituents back home couldn't watch or listen to internet broadcasts of the Feb. 7 debate.

Hickenlooper wants to raise broadband availability in rural Colorado from 70 percent now to 100 percent by 2020 — and at minimal speeds deemed sufficient by the Federal Communications Commission, or roughly 25 megabits per second for downloads and three megabits per second for uploads.

Despite the bipartisan sponsorship, many hurdles remain. Among other issues, lawmakers are debating which companies will get the broadband subsidies starting next year and whether thousands of residents whose phone bills are subsidized will end up paying more once the telephone fund disappears in 2024.

In 2019, the bill would devote 60 percent of the telephone subsidy fund, known as the High Cost Support Mechanism, to support companies installing broadband infrastructure in rural Colorado.

The telephone fund, which is generated from a universal surcharge on all residents' phone bills, would transfer greater amounts in subsequent years until its demise. It collected roughly $38 million in 2017.

Sonnenberg argues that startups and rural cooperatives need help in wiring up remote communities.

One big telecommunications provider opposes a rapid fund transfer.

Louisiana-based CenturyLink is by far the largest rural phone service provider in the state and, since it's received roughly 95 percent of annual state subsidies to provide that service, argues that it could lose the most with a rapid drawdown of the phone fund.

It warns that its 200,000-plus rural customers whose bills are subsidized could face price hikes with a rapid phone-to-broadband fund transition.

“This accelerated step-down amendment will harshly impact our rural customers and could cause significant rate increases or result in fewer resources for those areas,” said Mark Soltes, assistant vice president of public policy and government relations.

The bill faces final consideration by the Republican-led Senate before it goes to the Democrat-led House.

Hickenlooper has already signed into law a measure to allow the state to seek federal grants for broadband deployment. Those grants are needed for the same reason rural telephone lines were subsidized: The cost of laying cable or fiber networks far outweighs what operators can charge their customers.

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