Bills aimed at bridging North Carolina’s growing digital divide are once again before the General Assembly, but it’s still unclear how big of a leap lawmakers are willing to take in making the changes that advocates say will be needed to make a real difference.
Although better broadband access is a common pledge during campaign season, especially in rural regions of the state, it has proven far easier to talk about than to legislate.
Despite the promises and the pressure of growing demand, little in the way of fundamental legal changes have taken place since the state’s 2011 law that tightened restrictions on local governments and backed an approach that relied on existing providers to make improvements in unserved and underserved areas.
This year, in addition to pumping more money into a grant program to assist local communities for last-mile connections, advocates want to lift some of those restrictions on local governments and make changes that would allow the state’s electric power cooperatives to play a role in developing broadband infrastructure.
Aligned against the efforts is the formidable combination of major telecom and cable television companies, which have warded off changes since prevailing in the fight nearly a decade ago over whether cities could compete directly with internet providers.
The 2011 law effectively shut down new local government investment in broadband and prohibited expansion in places where it had already started. The industry also fought off a challenge to the law, winning a 2015 decision at the U.S. 6th Circuit Court of Appeals that kept it in place.
The last push to change the rules in 2017 made it through the House by a wide margin but was never taken up by the Senate. Last year, an agreement between the two chambers launched the Growing Rural Economies with Access to Technology, or GREAT, grant program, but it steered clear of the thornier structural changes.
That could change this year. Driving the new round of proposals is a growing frustration in rural and exurban communities that the promises of better service will never happen, while online access grows in importance in education, health care, business and tourism.
Rep. Josh Dobson, R-McDowell, said there’s a rising frustration with the lack of progress and legislators are hearing about it.
“Especially when you represent a rural area like mine,” Dobson said in a recent interview. “I hear on a weekly basis, ‘What are you going to do about broadband?’”
The expansion of services in the state’s more populated areas highlights the differences, he said. “In the urban centers, it may be working for them, but it’s not working for us, and that’s something I’m going to continue to work on to get us to a better place because we’re not at a good place right now.”
He said the disparity across the state is fundamentally unfair and getting worse as online tools become more important in areas like education and health care.
“When I go to McDonald’s in Avery County and there are students doing their homework because they don’t have broadband (at home), that’s unacceptable to me,” he said.
Christopher Mitchell, director of the Community Broadband Networks Initiative for the Minneapolis-based Institute for Local Self-Reliance, said it’s evident by what’s happening on the ground that the major companies like Spectrum, AT&T and Century Link are far more interested in investing to compete in the lucrative, more densely populated markets. At the same time, he said, they’re fighting off changes in order to hold onto their monopolies in the less populated regions.
“It’s a fundamental conflict because North Carolina needs to encourage other kinds of investment,” he said.
“The big companies will not get the job done in the rural areas.”
Mitchell, who took part in a series of broadband discussions in January in several North Carolina communities, said the result has deepened the digital divide here. Among the states, he said, North Carolina has one of the greatest discrepancies between the digital haves and have-nots.
“There is more investment in high-quality networks in North Carolina cities than the average cities in the United States, and there is less investment in the rural areas than the average for rural America,” he said.
“I would expect to see a second or third fiber option in Chapel Hill or Raleigh before I’d see the first one in a town 75 miles east of there,” Mitchell said.
Scott Mooneyham, director of political communications and coordination with the N.C. League of Municipalities, said the legislature is at a crossroads when it comes to broadband.
“I think it’s very clear that many North Carolinians are not satisfied with the current internet service they receive,” he said in a recent interview.
“That includes individuals that cannot access basic broadband at home and business owners who need more than basic service to be competitive. What you’re seeing now is that legislators are clearly hearing those complaints. Now they have to decide who to listen to — the incumbent providers whose promises to fix this have so far proven empty or their constituents.”
This year is already different, he said, because bills that go directly at the current system are moving through the committee process.
“If they listen to their constituents, then I think there will be significant change in this session,” Mooneyham said. Complaints may have reached a crescendo, he said, but there still is no guarantee of success. The bills have been filed, and the pushback has started.
“I think the issue really hangs in the balance right now.”
Dobson, who has been holding weekly negotiations with stakeholders to try to find a way forward, said there is some progress but no agreement yet.
“I really want to do this in a collaborative area,” he said. “There is a consensus that we need to focus on the underserved areas and not overbuild where broadband already exists.
“What we’re working on now is how we define unserved areas or underserved areas, and I’ve tasked both groups with coming up with a proposal that we can all find a consensus on. I don’t want to say we’re there, but we’re further than we’ve been since I’ve been working on this over the last four years.”
What the bills do
For now, three key pieces of broadband legislation are moving in this session: two standalone bills and a special provision in the House version of the state budget.
Most of the focus so far has been on House Bill 431, the FIBER NC Act, which would set up rules for public-private partnerships and allow cities and counties to get directly involved in broadband investments for the first time since 2011.
The bill, introduced by Dobson and Reps. David Lewis, R-Harnett, John Szoka, R-Cumberland, and Kevin Corbin, R-Macon, adds specific language to local government laws to permit the use of tax revenues, grants and other funds to construct and lease broadband facilities and equipment.
The local government would then lease those facilities and equipment to a provider.
The bill was due to be heard in a House committee in late April but was withdrawn while closed-door negotiations continued.
Its supporters gained a little more time to work things out when it was determined that the bill was not subject to the legislature’s crossover rules, which require most nonbudget bills to be passed by at least one chamber by the end of this week.
In its current iteration, HB431 spells out the guidelines for the investments and requirements for companies applying for leases. It requires local governments to conduct a feasibility study to determine needs and available resources, a public process for adopting an improvement plan and regular updates to the state on the projects.
Opposition to the legislation includes the N.C. Chamber, the state’s largest business lobbying group.
Gary J. Salamido, the organization’s chief operating officer and acting president, said the chamber opposes the bill for several reasons.
“North Carolina’s broadband infrastructure is critical to the state’s future growth,” Salamido said in a statement to Carolina Public Press.
“While it is important that our state find solutions to meet the broadband needs of North Carolinians, the FIBER NC Act will not solve the access and adoption challenges facing many communities.
“House Bill 431 would create greater barriers to enter the marketplace, delay permitting and force businesses to compete directly with their regulator. This bill does not create a level playing field for North Carolina businesses.”
Mooneyham disagrees. He said the bill offers exactly the kind of public-private partnerships the business community has insisted on as well as protections on public resources. It’s a matter of options, he said.
“If an incumbent provider is meeting the need, no one from government is going to utilize this authority,” he said.
“It’s only because these communities are recognizing that they have to have this critical infrastructure to survive. This is not a luxury item. This is something they’re only going to spend their money on if there’s a real need.”
Also moving is Senate Bill 310 and its House counterpart H387, Electric Co-Op Rural Broadband Services, which was introduced early in the session and attracted an impressive number of co-sponsors — 42 in the 50-member Senate and at last count 89 in the House. It cleared the crossover hurdle when it passed the Senate last week by a vote of 49-0.
The bill would lift a prohibition that prevents electric cooperatives from providing broadband infrastructure by allowing them to use their existing easements and in some cases new easements to also supply fiber optic lines.
A growing number of the state’s 26 electricity co-ops are running fiber lines for their electric utility operations and have additional capacity, but existing law prohibits them from leasing the available space or using the lines for broadband service.
The new law would set up a system similar to that was used in other states to build out rural broadband.
Although the bill is moving quickly, it still could require a few changes. Some legal experts have questioned the constitutionality of a section in the bill on easements that’s intended to ward off the kind of class-action lawsuits filed in other states.
The bill also requires a feasibility study including whether areas qualify as unserved, which is defined as “a location where inhabitants or businesses do not have access to high-speed broadband services.”
It defines broadband as access to 25 Mbps downstream and 3 Mbps upstream, which is the federal definition for broadband.
For now, the bill does not get into the details of how areas will be delineated, but the definition of “unserved” has often been a critical point in the debate over changes to the laws.
Part of that discussion has centered on the use of the Federal Communications Commission official maps for service areas.
Current FCC rules are based on census blocks and allow service providers to declare an area served even if only a portion of the residents and businesses in the area have access to service.
The definition of “unserved” and “underserved” continues to be part of the ongoing debate over broadband expansion and is likely to play a part in all of the legislation consideration.
That includes the expansion of the GREAT grant program, which was started last year with an initial $10 million appropriation.
This year, the new House budget plan would set up a $15 million annual appropriation for the grants, which are aimed at last-mile services in rural areas. A special provision in the budget further spells out criteria for establishing whether an area qualifies for the program.
The new provision also sets up a system of oversight for the implementation of the grant projects.
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