As the federal government makes unprecedented investments to expand high-speed access to the Internet, unbeknownst to most outside the broadband industry is that nearly a third of the states in the U.S. have preemption laws in place that either prevent or restrict local municipalities from building and operating publicly-owned, locally-controlled networks.

Currently, there are 16 states across the U.S. (listed below) with these monopoly-protecting, anti-competition preemption laws in place.

These states maintain these laws, despite the fact that wherever municipal broadband networks or other forms of community-owned networks operate, the service they deliver residents and businesses almost always offers faster connection speeds, more reliable service, and lower prices.

In numerous cases, municipal broadband networks are able to provide low-cost or free service to low-income households even in the absence of the now expired federal Affordable Connectivity Program (ACP). And for several years in a row now, municipal networks consistently rank higher in terms of consumer satisfaction and performance in comparison to the big monopoly Internet service providers, as PCMag and Consumer Reports have documented time and time again.

Nevertheless, these preemption laws remain in 16 states, enacted at the behest of Big Cable and Telecom lobbyists, many of whom have ghost written the statutes, in an effort to protect ISP monopolies from competition.

The Infrastructure Law Was Supposed to Move the Preemption Needle But …

Blueprints for BEAD is a series of short notes and analysis on nuances of BEAD that might otherwise get lost in the volume of material published on this federal funding program. Click the “Blueprints for BEAD” tag at the bottom of this story for other posts.

Few people dispute the vital importance of affordability in closing the digital divide. A 2021 Pew Research Center survey found that nearly half of all people without broadband cited cost as a barrier, with 20 percent listing cost as the primary reason for not subscribing to broadband service.

Research from EducationSuperHighway pegged that number even higher, estimating that lack of affordability explained about two thirds of the remaining digital divide in the country.

As the Broadband Equity, Access, and Deployment (BEAD) program steams ahead, questions about affordability have come to the fore. After all, deploying tens of thousands of miles of new fiber is only half the equation. BEAD will help build the physical networks necessary to connect the millions of households that still lack access to high-speed Internet service, but will it make a difference if they still can’t afford a plan? This possibility is all the more likely in light of the Affordability Connectivity Program’s (ACP) untimely demise.

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BEAD’s low-cost plan requirement sought to ease such concerns about affordability. To ensure households with limited financial means would actually see the benefits of the program’s massive infrastructure investment, this requirement mandated that all networks built using BEAD funds offer a low-cost plan for eligible subscribers.

EMPOWER Broadband, a subsidiary of Mecklenburg Electric Cooperative (MEC), is asking the Federal Communications Commission (FCC) to waive financing requirements attached to the provider’s takeover of thousands of subsidized broadband locations from RiverStreet Networks. It’s a move the cooperative says will save it millions of dollars in errant additional penalties.

It’s also highly representative of the ongoing challenges facing a program that has long been criticized for dysfunction and mismanagement.

The FCC program not only fell short of fulfilling its original promise, it now risks boxing numerous communities out from what could be a generational funding opportunity made possible by the 2021 infrastructure bill.  

During the 2018 Connect America Fund (CAF) Phase II auction, RiverStreet was awarded $32.1 million in financing to provide high-speed Internet to 13,518 locations in Virginia. RiverStreet is looking to divest 3,757 locations across three counties, poised to receive $8.1 million in annual CAF II broadband deployment support.

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According to a May RiverStreet filing with the FCC spotted by Broadband Breakfast, the divestment is necessary because the company “encountered certain obstacles that have prevented it from meeting its CAF II buildout milestones in the assigned CBGs.”

Central Virginia Electric Cooperative’s (CVEC) Firefly Broadband subsidiary has been awarded a new $12.2 million grant from the state of Virginia. The award will help fund a major update to an already massive effort to extend affordable broadband to vast swaths of rural Virginia.

According to a cooperative announcement, the $12.2 million in Virginia Telecommunication Initiative (VATI) grant funding will be used to help fund a broader $48.6 million partnership with Rappahannock Electric Cooperative, Dominion Energy, and county governments.

These current VATI funds were largely made possible by federal COVID relief legislation passed in 2021. Such ARPA (American Rescue Plan Act) funding saw fewer overall restrictions and greater flexibility than infrastructure bill funding (BEAD) authorized the same year, resulting in states more quickly doling out funding for emerging broadband deployments.

“The fiber construction project will span approximately two years, covering 603 miles and reaching nearly 6,000 additional eligible locations in the counties of Amherst, Appomattox, Buckingham, Campbell, Fluvanna, Goochland, Greene, Louisa, Madison, and Powhatan,” CVEC said of the plan.

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CVEC and Firefly’s expansion into unserved Virginia comes after the cooperative first finished an ambitious, $130 million plan to install over 4,500 miles of fiber-optic cable across 14 counties, providing broadband internet access to all of its 39,000 members.

With a 3-2 vote along partisan lines, the FCC has restored both net neutrality–and its Title II authority over Internet access providers. It’s just the latest chapter in a multi-decade quest to try and prevent national telecom monopolies from abusing their market power to undermine competitors while nickel and diming American consumers.

“Consumers have made clear to us they do not want their broadband provider cutting sweetheart deals, with fast lanes for some services and slow lanes for others,” FCC boss Jessica Rosenwocel said in a statement.

“They do not want their providers engaging in blocking, throttling, and paid prioritization. And if they have problems they expect the Nation’s expert authority on communications to be able to respond,” Rosenwocel added.

Smaller ISPs and municipalities worry that the new rules saddle them with burdensome regulations as a punishment for the sins of much larger companies. But the FCC, state leaders, and consumer groups insist the rules should be a net benefit all the same.

The final rules require that ISPs be transparent about any restrictions on consumer broadband lines. They also prohibit ISPs from extorting content and service companies looking to maintain high-quality performance on telecom networks, and prohibit telecoms from undermining online competition by creating pay-to-play “fast lanes.”

If you missed our most recent Building for Digital Equity Livestream – Life After ACP – the virtual event can still be seen in its entirety (below).

The entire event focused on the imminent end of the Affordable Connectivity Program (ACP) and featured a lineup of speakers who shared on-the-ground perspectives and approaches being adopted at the community level to deal with the broadband affordability crisis in the absence of the popular federal program that has served 23 million Americans since its inception two years ago.

As a bonus, we are sharing links to the speakers slide decks below.

The first of two lightning round speakers, Margaret Käufer – President of The STEM Alliance – gave an overview on the short and long-term work her organization is doing in upstate New York in the face of ACP’s demise. You can find her slide deck here.

The second lightning round presenter Jason Inofuentes – Program Manager for the Broadband Accessibility and Affordability Office in Albemarle County, VA – unveiled an ACP supplement program his office is pursuing and how they see things moving forward. Those slides are here.

The first of the main presenters – Monica Gonzales, Digital Equity Supervisor for Methodist Healthcare Ministries in Texas – gave an overview of what her faith-based nonprofit healthcare organization is doing to address affordable connectivity across the 74 county South Texas region served by MHM. Gonzales’ slides are here.

Today, the first Building for Digital Equity livestream of the year will begin at 3 PM ET. The entire event will zoom in on the imminent end of the Affordable Connectivity Program (ACP) with the lineup of speakers sharing on-the-ground perspectives and approaches being adopted at the community level as they work to keep financially-strapped households connected beyond ACP.

Last minute registration are still being accepted to fill up the last few seats for the virtual gathering here.

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Here’s the run-of-show:

NDIA’s Amy Huffman will set the table on where things stand with the ACP wind down process before two lightning rounds take center screen.

For the first lightning round Margaret Käufer, President of The STEM Alliance, will give an overview on the short and long-term community work her organization is doing in upstate New York in the face of ACP’s demise. That will be followed by Jason Inofuentes, Program Manager for the Broadband Accessibility and Affordability Office in Albemarle County, VA, who will spotlight an ACP supplement program his office is pursuing and how they see things moving forward.

Martinsville, Virginia has technically owned a municipal fiber network for the better part of a generation. But the city never had the time, resources, or interest in maximizing the Municipal Internet Network’s (MINet) full potential until COVID demonstrated the importance of affordable access and federal broadband grants made expansion a viable reality.

At a Martinsville city council meeting on February 13, the council offered unanimous support for a phased expansion of the city’s fiber network.

What exactly the expansion will look like, and how it will be funded, very much remain a work in progress.

The core MINet fiber network originally consisted of 48 strands and 20 miles of fiber connecting city schools, municipal buildings, local businesses, and key anchor institutions. A 2009 estimate indicates the network has saved the city between $100,000 and $150,000 annually on telecom lease agreements every year since its inception.

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Despite having been first constructed in the 1990s, Martinsville’s MINet only has about 376 customers (98 of them being residential) in a city of nearly 14,000 residents. There’s roughly 20 users currently on a multi-month waiting list, eager to get access to affordable fiber at speeds up to a gigabit per second (Gbps).

Mike Scaffidi has been the MINet director for 26 years. He tells ILSR that while the city has contemplated network expansion for a long time, the city never had the staff or resources to prioritize the expansion or marketing of the city-owned fiber network.

In the quest to unlock billions of dollars in broadband infrastructure money, Louisiana and Virginia have outpaced all other states in the speed with which they are dispatching the BEAD program’s requirements. Louisiana was the first to complete the challenge process and is still the only state to have received approval for Volume 2 of its initial proposal. Virginia, meanwhile, has completed their challenge process but now appears locked in a battle with the NTIA over the low-cost plan parameters they intend to set. 

Information is trickling out about the challenge process in both states. We know that Louisiana received a reported 110,00 challenges and Virginia even more, counting 130,000 before the challenge window had even closed. It will be interesting to learn about challengers’ experience with the process, particularly for those nonprofits and local governments which have less experience with broadband mapping and data reporting. In the meantime, the states’ mandatory challenge process disclosures can give us some preliminary insight into how the challenge process is being used.

Two Maps Show Current Status of Challenge Process

NTIA guidance stipulated some transparency requirements for the post-challenge process that we are now beginning to see play out. Louisiana's and Virginia’s maps now show data on the challenges made during the process - who challenged the designation, what type of challenge they made, and, if available, the results of the adjudication process. (NTIA guidance requires “a summary of the challenge” and “a summary of the rebuttal,” which suggests slightly more detail than the maps provide.)

Five years ago, the Central Virginia Electric Cooperative (CVEC) announced the creation of the Firefly Broadband initiative, a subsidiary specifically built to leverage the co-op’s existing electrical assets to deliver affordable fiber to 13 underserved Virginia counties.

Half a decade later, the coop says it has successfully completed its $150 million expansion project, deployed 3,600 miles of new fiber, passed 40,000 total homes and businesses, and directly connected 20,000 state residents–many for the first time ever–in less than 52 months.

“Central Virginia Electric Cooperative partnered with Conexon to perform a feasibility study for a fiber build across their entire service territory – 13 counties and 3600 miles,” CVEC VP of Communications Melissa Gay told ILSR. “Once the target costs, offerings and take rates were determined, we chose to race to secure supplies and labor. Finding great partners has been a tremendous help to the success of our project.”

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Buoyed by numerous grants including a $28 million combination loan and grant from the USDA's ReConnect Program, Firefly now provides local residents symmetrical 100 Mbps (megabits per second) fiber for $50 a month, and symmetrical 1 Gbps (gigabit per second) service for $80 a month. There are no contracts and no data caps.

About 90 percent of households connected had no broadband access previously, according to Bruce Maurhoff, Firefly’s senior vice president and chief operating officer.