Colorado repealed law limiting municipal internet, making it easier for towns to build their own

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Colorado repealed law limiting municipal internet, making it easier for towns to build their own

More than 160 cities, towns and counties opted out of Senate Bill 152, and some built their own gigabit service that was 4,000 times faster. But there were other reasons for the repeal.

coloradosun.com

More than 160 cities, towns and counties opted out of Senate Bill 152, and some built their own gigabit service that was 4,000 times faster. But there were other reasons for the repeal.

Tamara Chuang
4:11 AM MDT on May 24, 2023


By the time Longmont voters rejected a proposal in November 2009 that would have let the city’s electric utility build faster internet service, Sandi Seader wasn’t surprised the measure had failed.

It was the fierce opposition that shocked her. The opposition, led by the cable TV industry, had raised more than $200,000 to fight the burgeoning threat to their business.

“We weren’t expecting anyone to campaign against it, which is totally naive now that I think about it,” said Seader, the city’s lobbyist at the time and now assistant city manager. “And, of course, municipalities can’t advocate for or against their own ballot issues. We were hamstrung. It had to be a private citizen group that would come out and support the bill, but that wasn’t quite realized yet.”

Sandra Seader, Longmont’s assistant city manager on May 23, 2023. (Olivia Sun, The Colorado Sun via Report for America)

While many U.S. households had access to broadband in 2009, the much faster gigabit-fiber service Longmont wanted to build was practically unheard of. There would be many more battles between Colorado’s municipalities and the industry. That’s because a 2005 state law required every local government to ask voters for permission to build. When Longmont asked in 2009, the measure failed by 12 percentage points.

Senate Bill 152 was promoted by the cable industry as a way to prevent wasting taxpayer money on infrastructure projects, like municipal internet. Towns, however, could still pursue it, as long as no one else offered “advanced service,” or internet speeds in excess of 256 kilobits per second, according to the law. But this was 2009, when about 63% of Americans had broadband at home and speeds averaged 7-8 megabits per second, or 30 times faster than 256k. Gigabit service was about 4,000 times faster, though largely unavailable from telecom providers.


Senate Bill 183 redefined “advanced services” in the state statute to a more modern speed of broadband internet as opposed to the older definition of faster than 256 kilobits per second . The new law, passed May 1, 2023, also repealed an older law (SB-152) that limited a local government’s options in exploring internet service for its community. (Screengrab)

Longmont asked voters again in 2011. But this time, it added language like “without increasing taxes” and mentioned the city-owned fiber network built in the ’90s. A citizen’s group rallied and the effort benefited from the publicity of Google Fiber. The measure passed with 61% in favor.

Two years later, the city of Centennial put the question to voters and it, too, passed. Montrose, Boulder, Yuma County and other areas found success the following year. As of November, 122 towns and about 40 counties had opted out of Senate Bill 152, according to the Colorado Municipal League.

The only failure? Longmont, during its first attempt in 2009.

In September 2018, the city of Centennial and Ting, a gigabit internet service leasing municipal fiber from the city, turned on its first customer. (Provided by the City of Centennial)
Earlier this month, Colorado repealed the referendum requirement and nixed the kilobits reference with the passage of Senate Bill 183.

Support came from all sides, including the cable industry, which was neutral on the legislation. But there was another reason for the timing: federal broadband funding. The Colorado Broadband Office wasn’t sure if communities that hadn’t opted out would be eligible for a piece of the up to $1 billion in federal broadband funds Colorado could receive. Now, there’s no question.

“Removing this barrier means cities and counties that had not opted out no longer have to overcome this massive task,” said Brandy Reitter, executive director of the Colorado Broadband Office

What has happened since 2005​

Many other states adopted broadband restrictions similar to Colorado’s, as cable and telecom providers funded campaigns, recalled Kevin Bommer, executive director for the Colorado Municipal League, which represents 270 cities and towns in the state.

Bommer said the telecom industry was hoping to avoid “want what they thought was unfair competition from government owned or operated telecom or even television,” he said. “When Senate Bill 152 was introduced, it was a straight-up no local government can do this period, a pre-emption. Our lobbyist (Geoff Wilson) was able to slow it down enough that it was in doubt and the proponents cut a deal. And the deal was that municipal ownership and operation of telecom and broadband was illegal — unless voters gave permission.”

NextLight, a high-speed internet provider based in Longmont, provides a gigabit service available to 92% of the city’s households. (Olivia Sun, The Colorado Sun via Report for America)

After Longmont received the blessing of its citizens, the city won approval again two years later for a $45.3 million bond to build the citywide service. Construction began in 2014 and the first customers for the new NextLight service signed up later that year. In 2016, the city was named the third fastest service in America by PC Magazine, which mentioned that Comcast covered 93% of the town. The following year, Longmont ranked first and the publication realized it was NextLight’s edge that made the difference. Longmont has stayed near the top ever since.

And the bond?

It’s on track to be paid off by 2029 and “We’ll be, I hate to say, flush with cash but (that means) we’ll be spinning off a fair bit of cash to put back into and reinvest in the community,” said Valerie Dodd, NextLight’s executive director.

 

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Valerie Dodd, executive director of NextLight on May 23, 2023. (Olivia Sun, The Colorado Sun via Report for America)



NextLight’s gigabit service is available to 92% of the city’s households (“We’re in continual build mode because the city is expanding and growing at what is roughly 1% a year,” Dodd said). The gap includes apartments and mobile home parks where the city needs the owner’s permission to install the service. Of businesses and residents who are able to sign up for service, 60% have.

“We have absolutely leveraged our electric utility and couldn’t have done it without them,” Dodd said. “I always like to remind people that our measuring stick is not profitability. Our measuring stick is connectivity for everyone. We are not picking and choosing neighborhoods or apartment complexes. It’s truly access for all.”

Multiple routes out of 152​

Passing Senate Bill 152, however, didn’t mean a town was getting fiber internet anytime soon, if ever. It just gave officials the right to start the conversation.

While some cities, like Longmont, issued bonds to build their system, others, like Centennial, built a fiber-internet backbone and then leased access to private internet providers to offer gigabit service to individual households.

Other cities opted out and decided to let private companies handle it altogether. Lakewood, which opted out in 2019, owns some fiber lines that it uses to manage traffic signals or is used by the school district. In November, Lakewood officials announced that Google Fiber would build fiber-to-the-home service to as many households as possible. A wireless version will be offered to apartments and condos.


The city isn’t building the infrastructure. Google is.

Partnering with a private internet provider was always the focus, city spokesman Dan Stoutamire said. The first customers are expected to be online by early 2024.

“The city council initiated the ballot measure in order to position the city to be able to best take advantage of opportunities that might arise,” Stoutamire said in an email. “Generally, Lakewood is considered to have good connectivity, though residents have regularly expressed a desire for alternative providers that might bring increased speeds and/or lower costs.”

The Westminster clock tower overlooking Westminster City Hall at the corner of 92nd and Yates Drive.

Meanwhile, Westminster, which actually never opted out of Senate Bill 152, partnered with Google Fiber in February.

Construction is scheduled to begin later this year, city spokesman Andy Le said.

Why 2023 is a pivotal year​

With each passing year, more cities and towns voted by a large majority to opt out. There was a cost to taxpayers: paying to put the question on the ballot. The Colorado Broadband Office estimated the cost for a ballot measure was between $5,000 and $40,000, depending on the size of the municipality.

“And one of the chief complaints, primarily from the counties, was that it costs money to do these elections and it does,” Bommer said. “We had a couple (asking) why do we have to do these? They’re passing by 70, 80, 90 percent sometimes and it’s just a waste to have to do it.”

There had been attempts in the past to repeal the law but none got very far. The telecom industry was open to ending the referendums, but always asked for something in return. Bommer said CML wasn’t willing to compromise on behalf of its local government clients.

 

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Then came COVID-19. The pandemic reprioritized community broadband in a big way. While many Coloradans in metro areas had internet options and in some cases, a choice of gigabit providers, many areas still did not. And even in some lower-income urban areas, the cost was high. Households preferred to pay for mobile service instead of higher-cost broadband at home.

“You had kids who couldn’t go to school and so their parents were driving them to a parking lot of Walmart or the library so they could pick up a strong enough Wi-Fi signal so they could do their homework,” Bommer said. “It was like, something’s got to change.”

Hello, 2023.

Bommer credits Reitter, at the Colorado Broadband Office. Her team pushed for a clean bill with two goals: Drop the need for a referendum and modernize the language. The bill left rules in the statute to keep private companies from having to compete against public ones that may also control rights of way, permits and fees. The Colorado Cable Telecommunications Association didn’t protest the passage of Senate Bill 183, which became law May 1.

“We agree repealing the public referendum requirement is long overdue,” said Jeff Weist, who represented the Colorado Cable Telecommunications Association in 2005 and still does. “We are also pleased to see the legislature chose to retain the provisions in current law prohibiting a local government from using its regulatory authority to advantage its own competitive service offering.”

Nationwide, there’s been a stir, too. Two states, Arkansas and Washington, removed some or all restrictions in 2021. But there are still 17 states with some form of restriction, according to the Institute for Local Self-Reliance, which tracks municipal broadband efforts.

“When Longmont started, there was still this idea that broadband was a luxury, something nice to have. And now it’s pretty much universally regarded as something everyone should have access to, needs access to really fully participate in modern society,” said Sean Gonsalves, who documents municipal broadband efforts for the Institute for Local Self-Reliance.

Federal funding made a big difference​

The federal government’s big infrastructure package and broadband funding created even more momentum for change.

As part of the $42.5 billion Broadband Equity, Access and Deployment program, or BEAD, the National Telecommunications and Information Administration will soon be giving $100 million to every state to improve broadband. States must create grant programs to allocate money to private and public providers. The remaining funds are reserved for areas with a higher number of unserved and underserved households, often in communities passed over by private internet services that for one reason or another, didn’t provide it.

With BEAD, state governments with bans must share how they’ll award the funds by project and community. That may be why more states could end restrictions this year, Gonsalves said.

“At least now there’s a mechanism where some of these states are going to have to publicly account for these laws, which I think anyone outside of Congress or the big incumbents would find strange that here we are, 30-odd years after the Telecommunications Act, which was supposed to bring competition (and yet) we have this massive digital divide in this country, despite the promises and the subsidies that these big companies have gotten over the years,” Gonsalves said. “A lot of communities, like Fort Collins, said, ‘Look, let’s do it ourselves to deliver the reliability, the kind of affordability and the communitywide benefit that these networks can bring, and not just rely on the monopoly provider or duopoly providers in power.’”

With the success of municipal internet in Colorado and elsewhere, he added, “more and more communities are now seeing this as a very viable possibility for them and would like to access some of these funds.”

Brandy Reitter, executive director of the Colorado Broadband Office, during a break at the Colorado Broadband Summit on April 19, 2023, in Westminster. (Olivia Sun, The Colorado Sun via Report for America)

The timing was right to fix any confusion with Colorado’s law, said Reitter, with the state Broadband Office. About 75% of Colorado cities and 30% of counties had not yet opted out and most of those were in the eastern and northwestern regions of the state. They’re smaller and rural and lack financial resources to host an extra election. They’re also the areas with the greatest need for reliable broadband. With no clear opt outs, the state’s broadband office felt there could be legal issues if they provided those communities a share of the federal grants.

“The state’s position before Senate Bill 183 was not to fund communities that haven’t opted out. Funding projects in these localities could create a higher risk situation that the project would be completed in time,” Reitter said. “Even if we like a project that was located in an area that was pending a ballot initiative, it would be extremely risky for us to award that project before May 1 when the law changed.”

According to the NTIA, there’s nothing in its rules that would delay BEAD funding to states with restrictions on municipal networks. But states must show how they plan to work with all potential providers, from small to large private providers to municipalities.

“We want grant funds to support the best networks possible. To do that, we’ve asked states to create a level playing field on which municipalities; cooperatives, and small, medium, and large companies can all compete for these funds,” an NTIA spokesperson said in an email. “Our rules require states with such restrictions to demonstrate their ability to conduct a competitive subgrant program.”

Competition continues​

In Pueblo, one of the last to opt-out in November, it’s business as usual for the city, community and private companies as everyone moves forward toward getting all households adequate broadband. Mayor Nick Gradisar said the city only put it on the ballot after talking to a local internet provider hoping to expand.

“We were having some conversations with a fiber provider and the question came up whether we’d opted out of Senate Bill 152. And well, shucks, it turns out we hadn’t,” Gradisar said. “And they said that’s maybe going to be a problem because this could be construed as the city getting into the internet business, which we didn’t really have any plan to do.”

Downtown Pueblo is seen on March 22, 2023. (Olivia Sun, The Colorado Sun via Report for America)


Now that that’s taken care of, the growing Pueblo West community appears to be getting multiple options. Highline, which acquired RTC Broadband in Pueblo, has been installing in the Pueblo West community since 2021.

In March, Comcast announced it would expand there as well, by investing $75 million into its Xfinity 10G network. Construction has begun with service in Pueblo West anticipated by this fall.

“They did not have adequate broadband and they were always complaining about the service in terms of speed,” Gradisar said. “There’s 34,000 people out there and it’s spread out. So it’s not an inexpensive place to provide those kinds of services. … I think it was a competition thing that caused Comcast to decide this is a market we need.”

 

[Flexington]

Hopefully this stops xfinity from strong arming most areas