Legislature offers no clear path for municipal broadband advocates

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By Matt Pilon

For cities and towns wanting to spur a quicker rollout of gigabit-speed internet service to local residents and businesses, the recently concluded legislative session left them in limbo.

Since 2014, Manchester, West Hartford, Bristol, and a coalition of towns in the state’s more rural northwest corner have been trying to build their own high-speed internet networks with private operators by stringing up fiber optic cable to utility poles.

It’s been a contentious saga, with major internet and wireless providers fiercely opposing the efforts as illegal and ill-advised government intrusions into a competitive market. Meanwhile, municipalities and their allies contend the private market simply won’t roll out affordable gigabit-speed internet fast enough, particularly in poorer or rural areas, and that high speeds are crucial to retaining population and growing Connecticut’s economy.

So far, the industry has been winning the fight.

The Public Utilities Regulatory Authority (PURA) dealt a significant blow to municipal-broadband efforts last year when it ruled that state law, which allows cities and towns to occupy their legally reserved “municipal gain” space on utility poles “for any purpose,” did not permit them to install fiber optic cable that would give businesses and residents access to high-speed internet, as it could amount to unfair competition.

PURA’s decision resulted in a rare lawsuit between fellow state agencies, when the state Office of Consumer Counsel appealed PURA’s decision in state Superior Court.

During the recent legislative session, Senate Bill 846 sought to settle the matter by allowing cities and towns to use their free gain space to build out internet networks in partnership with third-parties. That version of the bill went nowhere.

Later forms of the proposal, which ultimately didn’t reach a vote in either legislative chamber, would have required municipalities’ private partners to pay fees to use pole space, just like private network and internet-service providers must do.

However, that would have made municipal networks more expensive, since cities and towns that attach fiber and other equipment to poles don’t pay the fees.

Town of Manchester IT Director Jack McCoy said the bill’s failure will further hamper municipal-broadband efforts, delays he described as “technologically and financially punishing” for residents.

Lacking legislative clarity, municipalities are refocusing on the court battle, where a judge recently ordered PURA and OCC to schedule oral arguments in August.

Proceedings had been delayed as lawmakers debated changes to state law. Depending on the outcome, there could still be further legal appeals ahead — even a state Supreme Court case, some advocates predict.

Meantime, some towns think a possible workaround could include creating a municipal utility that would build a broadband network.

It’s something being considered by Northwest Connect, a coalition of 25 northwestern Connecticut communities that has been pursuing the creation of a roughly $100 million high-speed fiber network.

Kim Maxwell, president of Northwest Connect, said the current plan is to push for a vote later this year in Norfolk to form a utility, which would work to build a solar farm as well as a broadband network. The hope is that other nearby towns follow Norfolk’s lead, forming their own utilities, and ultimately, a regional cooperative.

The utility would have to pay fees to string up fiber on utility poles, which would increase costs. However, Maxwell said it could still be financially viable in his rural region.

“We are moving ahead with all deliberate speed,” Maxwell said.

Connecticut has a bit of history with municipal utility networks.

In 2004, Groton’s utility company, seeking to offer alternative options to Comcast, launched internet service through Thames Valley Communications.

The effort failed, with taxpayers shouldering about $27 million in debt after TVC was sold for a pittance in 2013 (the company still operates today).

Depending on who you ask, the failure was the result of some mix of overborrowing, rapidly changing technology, steep competition once the service was up and running, and the Great Recession of 2008.

But incumbent service providers say it’s a warning that town governments don’t have the wherewithal to operate in the telecom market.