Another US state repeals law that protected ISPs from municipal competition

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Getty Images | Yuichiro Chino

Minnesota this week eliminated two laws that made it harder for cities and towns to build their own broadband networks. The state-imposed restrictions were repealed in an omnibus commerce policy bill signed on Tuesday by Gov. Tim Walz, a Democrat.

Minnesota was previously one of about 20 states that imposed significant restrictions on municipal broadband. The number can differ depending on who’s counting because of disagreements over what counts as a significant restriction. But the list has gotten smaller in recent years because states including Arkansas, Colorado, and Washington repealed laws that hindered municipal broadband.

The Minnesota bill enacted this week struck down a requirement that municipal telecommunications networks be approved in an election with 65 percent of the vote. The law is over a century old, the Institute for Local Self-Reliance’s Community Broadband Network Initiative wrote yesterday.

Though intended to regulate telephone service, the way the law had been interpreted after the invention of the Internet was to lump broadband in with telephone service thereby imposing that super-majority threshold to the building of broadband networks,” the broadband advocacy group said.

The Minnesota omnibus bill also changed a law that let municipalities build broadband networks, but only if no private providers offer service or will offer service “in the reasonably foreseeable future.” That restriction had been in effect since at least the year 2000.

The caveat that prevented municipalities from competing against private providers was eliminated from the law when this week’s omnibus bill was passed. As a result, the law now lets cities and towns “improve, construct, extend, and maintain facilities for Internet access and other communications purposes” even if private ISPs already offer service.

“States are dropping misguided barriers”

The omnibus bill also added language intended to keep government-operated and private networks on a level playing field. The new language says cities and towns may “not discriminate in favor of the municipality’s own communications facilities by granting the municipality more favorable or less burdensome terms and conditions than a nonmunicipal service provider” with respect to the use of public rights-of-way, publicly owned equipment, and permitting fees.

Additional new language requires “separation between the municipality’s role as a regulator… and the municipality’s role as a competitive provider of services,” and forbids the sharing of “inside information” between the local government’s regulatory and service-provider divisions.

With Minnesota having repealed its anti-municipal broadband laws, the Institute for Local Self-Reliance says that 16 states still restrict the building of municipal networks.

The Minnesota change “is a significant win for the people of Minnesota and highlights a positive trend—states are dropping misguided barriers to deploying public broadband as examples of successful community-owned networks proliferate across the country,” said Gigi Sohn, executive director of the American Association for Public Broadband (AAPB), which represents community-owned broadband networks and co-ops.

There are about 650 public broadband networks in the US, Sohn said. “While 16 states still restrict these networks in various ways, we’re confident this number will continue to decrease as more communities demand the freedom to choose the network that best serves their residents,” she said.

State laws restricting municipal broadband have been passed for the benefit of private ISPs. Although cities and towns generally only build networks when private ISPs haven’t fully met their communities’ needs, those attempts to build municipal networks often face opposition from private ISPs and “dark money” groups that don’t reveal their donors.

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