The National Telecommunications and Information Administration’s (NTIA) insistence on pushing nontraditional providers (including local governments) for federal grants is causing consternation in states that have laws on the books limiting or prohibiting government-owned (taxpayer-funded) networks (GONs).
Spotlight PA reported that the Pennsylvania Broadband Development Authority (PBDA) recently reversed its position on whether state law conflicts with its plans on how to use the money it will receive from the Broadband Equity, Access and Deployment (BEAD) program. This reversal could mean millions of taxpayer dollars could be wasted.
A 2004 state law prevents local governments in Pennsylvania from providing broadband service unless they request the original landline phone company serving the area provide the service first. The law requires the provider to offer service within 14 months or the local government can proceed with a network.
The first draft of the state’s BEAD proposal said the PBDA planned to waive the statute, but the latest draft that was submitted to NTIA claimed there was no conflict with state law. Sascha Meinrath, telecom professor at Penn State, told PA Spotlight that the difference between the two drafts is “a complete 180.”
The authority’s position on the issue has earned it harsh criticism from interested parties within the state.
“Simply stated, the PBDA has no legal authority to ‘waive’ any Pennsylvania statute,” Steve Samara, president of the Pennsylvania Telephone Association, wrote in a public comment on the plan.
PBDA also received letters from 16 Republican state representatives questioning PBDA’s ability to waive state law. “We are sure you understand the considerable legal implications of such a statement to bypass legislative intent and authority,” said one of the letters, Spotlight PA reported.
The Biden’s administration push for nontraditional providers has made states face hard choices as they craft their BEAD plans. The NTIA is emphasizing entities like local governments and electric cooperatives for the grants, requiring states to explain why they gave money to traditional providers in the cases where they do so. That agency urged states in its notice of funding opportunity (NOFO) to waive any GON-prohibiting laws while at the same time indicating that those who refuse to comply won’t face any reductions in BEAD funding. Municipal providers in states that limit or restrict GONs can directly petition the NTIA for funding if they are left out of the state plan.
The BEAD NOFO requires that states with GON restrictions “identify all such laws in its Initial Proposal and describe how the laws will be applied in connection with the competition for subgrants (and), in its Final Proposal, disclose each unsuccessful application affected by such laws and describe how those laws impacted the decision to deny the application.”
PBDA Executive Director Brandon Carson told Spotlight PA said the NTIA had not raised concerns about any potential conflicts in the BEAD proposal and the authority has not talked with state legislators about removing current restrictions.
Broadband Breakfast noted that states with barriers could see legal battles arise over BEAD grant funding opportunities. The website pointed out that South Carolina has been explicit in stating in its five-year BEAD plan that its broadband authority “may raise any concerns for the consideration of the State General Assembly” regarding the state’s GON restrictions.
The Taxpayers Protection Alliance has repeatedly pointed out how most GONs hemorrhage taxpayer money. Given the immense size ($42.5 billion) of the BEAD program, it’s unfortunate that states like Pennsylvania with taxpayer-friendly laws on the books are having to make hard choices on how to handle the NTIA’s stance as they attempt to close the digital divide.
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