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New Bill Could Make Colorado Friendly State for Municipal Broadband
Earlier this month, a new Colorado bill was introduced that, if passed, would rid the state of a law designed to protect monopoly Internet service providers (ISPs) from competition.
SB-183, titled “Local Government Provision Of Communications Services,” seeks to gut a law Big Telecom pushed state lawmakers to pass in 2005. That law, known as SB-152, prevented any of Colorado’s 272 municipalities from building and operating their own telecommunication infrastructure unless local voters first passed a referendum to “opt out.”
End of ‘the Qwest Law’?
Known also as “the Qwest law,” Qwest (now Lumen but more recently CenturyLink), with the help of Comcast, leaned on legislative allies to pass SB-152 to protect their monopoly profits. On our Community Broadband Bits podcast, Ken Fellman and Jeff Wilson, prominent telecom attorneys, recount how lobbyists for the monopoly ISPs were instrumental in pushing two false, but effective, narratives we’ve seen many times before: that SB-152 only sought to “level the playing field” so that private companies could compete with municipally run networks, and that SB-152 “protected” Coloradoans from irresponsible local governments, as if there were no such things as local elections.
But, if passed, the new proposed legislation (SB-183) – co-sponsored by a bipartisan-ish group of state legislators (10 Democrats and 2 Republicans) – would neuter SB-152 and allow local communities to decide for themselves if they wanted to pursue municipal broadband without needing special permission from the state.
As the official summary of the proposed new legislation notes, “current law regulates competition in local governments' provision of cable television service, telecommunications service, and high speed [I]nternet service, which is defined as ‘advanced service.’"
The proposed bill, which was introduced during the regular session on March 9, would replace the legal term “advanced service” with “broadband [I]nternet service,” and eliminate “the requirement that a local government hold an election before providing or before operating a facility to provide cable television, telecommunications, or broadband [I]nternet services to subscribers.”
It would also get rid of the requirement that local Colorado governments need to hold an election to enter into a private partnership to allow a private provider to offer cable TV, broadband service, or middle-mile infrastructure. Even now, thanks to this vaguely drafted law, it is not clear whether libraries are currently breaking the law by providing Internet service in areas that have not had a referendum.
It is currently in the hands of the state Senate’s Local Government & Housing Committee, though a committee hearing has not yet been scheduled.
Three Colorado Examples
Currently, ILSR is tracking 17 states with preemption laws that significantly restrict municipal broadband service – from outright bans to various barriers that make it impossible or extremely difficult for communities to build publicly-owned, locally-controlled broadband networks. ILSR does not actually include Colorado among the 17 because nearly every community that wishes to exempt itself from it has, via an unnecessary vote (that required taxpayer dollars to hold).
More than 121 Colorado municipalities, nearly half of all state municipalities, have already overwhelmingly said ‘Yes’ to local ballot questions that asked voters if they wanted to “opt-out” of the state law, even if only to explore the possibility of offering municipal broadband service.
Despite continued misleading and disingenuous attacks on the very idea of municipal broadband, proffered by the likes of University of Denver Professor of Finance Ronald Rizzuto, Coloradoans lived-experience seems to be carrying more weight. Across the state, not only are communities frustrated by the substandard service of the incumbent monopoly providers – ranking them among “the most hated companies” on both sides of the Rockies – there are three burgeoning municipal networks in Colorado’s Front Range region to consider as real-life case studies.
In Fort Collins, the city’s Connexion fiber network is 95 percent complete. In that city of 168,000, city councilors were so eager to finish building the network, they voted last April to approve an additional $20 million to complete construction, bringing the total cost of building the network to $142.8 million. In their January 2023 monthly report, Connexion reported that revenues were “significantly below budget” because of its “previously constrained installation capacity” that limited how many new subscribers they could sign-up. They also reported that expenses were also “significantly below budget,” resulting in a $72,000 shortfall.
Some local media outlets have seized on that, which has garnered the network critical coverage, most especially in the anti-government news outlet Complete Colorado.
Still, the 2017 business plan’s expected take rate of 28 percent has been exceeded. Today, Connexion has a take rate of 33 percent, despite challenges the city has faced. And, of course, an analysis of a network’s financial impact is incomplete if it does not take into account economic multiplier effects as well as an array of other indirect benefits a citywide fiber network brings.
In 2022, PCMag ranked Connexion as the fourth fastest Internet service provider in the nation and in 2021 as one the best Work-From-Home cities.
The second fastest ISP in the nation (and also on the list of best Work-From-Home cities), according to PCMag, is NextLight in Longmont, Colorado, another municipal network in the Front Range region.
The NextLight fiber-to-the-home (FTTH) network broke ground nearly a decade ago and today enjoys a 60 percent take rate in a city of 100,000 residents, last year celebrating passing the 25,000 subscriber milestone.
In 2013 voters approved a $45.3 million bond issue to speed network construction along. That debt is on track to be paid off in 2029 as initially projected.
The success of that network is not only fueled by the reliability that fiber provides but also by the appealing prices for service. Subscribers are able to get symmetrical 100 Megabits per second (Mbps) service for just $40/month or a symmetrical gig connection for $70/month. But what has really garnered the city praise is NextLight’s ability to offer its basic 100 Mbps plan at no cost to eligible low-income households, and its gig speed plan for just $20/month.
It highlights an important distinction between the incentives of municipal broadband networks in comparison to the shareholder-focused monopoly provider approach.
As NextLight’s Internet director Valerie Dodd told the Colorado Sun: “the city’s mission is to provide fiber-based, highly reliable, affordable Internet for any household within the Longmont LPC footprint.”
The goal is not to make money. The goal is to provide valuable service, affordable service and then it’s also to reinvest in the network to ensure that we have reliability and excess capacity into perpetuity.
In Loveland, where 67,000 Coloradoans call home, there is another municipal network known as Pulse. The early success of that network was enough to convince Larimer County officials to use $6.3 million of its American Rescue Plan funds to enter into an intergovernmental agreement with Loveland to expand the network further out into Larimer County.
County Commissioner Kristin Stephens told the Loveland Reporter-Herald the expansion was not “just about watching ‘Die Hard,’ This is about emergency services, honestly. In so many parts of this county we don’t have those kind of emergency services and connectivity to get word to folks about emergency situations.”
She added that Pulse performs better than private ISPs both in terms of service quality and its focus on serving those most in need of broadband access.
In episode 443 of our Community Broadband Bits podcast, Pulse Fiber Manager Brieana Reed-Harmel and Marketing and Communications Manager Lindsey Johansen discuss what it took to become a valued, local broadband utility for Loveland residents.
They also talk about how vital it was to work together with Fort Collins and Estes Park to share costs and bring efficiencies to all the municipal networks in the region.
The examples of municipal broadband in Colorado should help provide momentum for state lawmakers to pass SB-183. However, as we have seen other states with anti-municipal broadband laws on the books, the big telecom and cable lobby still holds tremendous influence in statehouses across the country. We will continue to track this bill that, if passed, will make Colorado one of the friendliest states in the nation for municipal broadband.
*This story was updated to clarify one of the provisions of the proposed legislation
Header image of Colorado Statehouse courtesy of Flickr user David Grant, Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)
Inline image of Loveland Pulse service truck courtesy of Sean Gonsalves