Montana Tweaks State Ban On Community Broadband, But Most Restrictions Remain

Montana State House

Hoping to ensure it can actually spend its share of historic broadband funding, Montana lawmakers have tweaked the state’s restrictions on community broadband. However, experts say most of the state law’s pointless restrictions remain intact, undermining state efforts to bring affordable, next-generation broadband access to Montana residents.

Montana’s one of seventeen states that have passed laws banning or restricting municipal broadband networks. The bills are usually ghost written by telecom monopoly lawyers, and in many states either outright prohibit community-owned broadband networks, or are designed to make funding and expanding such networks untenable.

Montana’s specific law, Mon. Code Ann. § 2-17-603, only allow municipalities to build and deliver broadband alternatives if there are no other private companies offering broadband within the municipality’s jurisdiction, or if the municipality can offer “advanced services” that are not available from incumbents.

Covid home schooling and telecommuting needs highlighted the counterproductive nature of such restrictions, driving some states—such as Arkansas and Washington—to dramatically roll back their restrictions.

Legislation gavel

In early March, Montana lawmakers made some subtle tweaks to the state law, but left nearly all of the state’s problematic restrictions intact. Lawyers tell ISLR the revisions, made via SB147, slightly tweak Montana’s restrictions to ensure that “political subdivisions of the state” can use federal funds to deliver broadband to regions deemed strictly unserved by the FCC.

But they otherwise leave Montana’s problematic restrictions intact. The changes are currently awaiting approval by the Montana House after a hearing slated for March 30.

Another proposed bill, HB484, would rework an existing legislative committee created in 2021 to expand oversight of how broadband grants are being spent in the state after complaints that monopolies like Comcast have dominated state grants. The bill aims to prioritize deployments by Montana-based telecom providers in a bid to distribute grant money more equitably.

Another proposed bill, HB804, attempts to ensure that tribal leaders also have a more meaningful say in the distribution of an historic round of broadband subsidies. But both HB484 and HB804, bills that could threaten the revenues and power of entrenched telecom monopolies, will face steep odds in the Montana legislature.

Pointless restrictions and convictions, stubbornly held

There’s been numerous attempts to completely repeal Montana’s municipal broadband restrictions, but none of them have proven fruitful.

The last attempt was during 2021 when Rep. Kelly Kortum, D-Bozeman, introduced House Bill 422. HB422 would have fully repealed the state’s restrictions on community broadband, with an eye on addressing what Kortum dubbed the “donut holes” of connectivity gaps created by decades of largely unchecked regional telecom monopolization.

While the bill did survive two readings in the state legislature, it ultimately failed to pass during its third reading, 35-64. According to Kortum, while the bill was popular with the public, it was ultimately doomed by a familiar foe: deep pocketed lobbyists representing regional telecom monopolies.

“I expected it to fail on the House floor. It didn’t, and then the lobbying really began,” Kortum told Agweek at the time.

Regional telecom giants like Comcast, AT&T, and Charter—who receive untold billions in poorly tracked taxpayer subsidies—quickly got to work spreading talking points within the legislature claiming that community-owned broadband networks are inherently always a taxpayer boondoggle. It’s a favorite claim of industry and its assorted proxies; it’s also not true.

“We’re trying to show the people of Montana that we’re trying … but we’re getting thwarted at every turn,” Kortum said of the bill’s failure.

Letting Monopolists Write State Laws Doesn’t Fix The Digital Divide

While a bipartisan array of Montana lawmakers claim they’re dedicated to bridging the digital divide, what that looks like in practice remains a point of contention, and many lawmakers remain incapable of acknowledging that unchecked monopolization is a key contributor, or that letting monopolies ghost write state law won’t fix the problem.

Last December, Montana Governor Greg Gianforte signed off on an agreement to invest around $309 million of American Rescue Plan Act (ARPA) funding to expand broadband in Montana. The grants, made possible by a law most Republican lawmakers opposed, will help fund 61 broadband expansion projects in 27 counties across the state.

The problem: state restrictions on community-owned broadband networks—whether they’re municipal, cooperative, or locally-owned utilities—constrained the full use of broadband funding to creatively fill coverage voids, muting the money’s potential impact.

FCC data indicates that roughly one in three Montanans lack access to broadband, nearly three times the national average. It’s worse in rural Montana communities, where three in five residents lack access to broadband. In areas that do have access, monopolization drives up costs and erodes the overall quality of customer service.  

While the Montana ARPA Communications Advisory Commission has implemented a cap ensuring that no one provider can obtain more than 35 percent of all funding, Comcast and Charter have already obtained the lion’s share of Montana broadband funds, leading smaller providers to claim the state has placed its thumb on the scale in their favor.

Entrenched providers like Comcast and Charter not only enjoy preferential treatment when it comes to being awarded grants in many states, they also mire grant applicants at agencies like the NTIA with costly challenges in a bid to further undermine competing grant applications by cooperatives, PUDs, municipalities, and city-owned utilities.

Bozeman Fiber logo

Providers in Montana continue to do their best to navigate the rules. Non-profit organization Yellowstone Fiber (formerly Bozeman Fiber) is currently building an open access fiber network that hopes to connect 40,000 premises in Gallatin County. While in partnership with UTOPIA Fiber, the $65 million project is not municipally owned, and relies on private-sector funding.

Still, the unnecessary restrictions routinely erect roadblocks to creative business models and local voter choice. If improving access to an essential utility is truly a top priority, letting telecom monopolies write restrictive state laws and dictate the scope and cadence of all subsidies likely isn’t going to be a winning proposition for a state currently ranked 50th in broadband access.

Header image of Montana State House courtesty of Flickr user Jimmy Emerson, Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0)