CML’s 93rd Annual Conference June 16 – 19, 2015 Breckenridge, Colorado

MAKING MUNICIPAL BROADBAND A REALITY June 17, 2017 Ken Fellman, Esq. Kissinger & Fellman, P.C Cherry Creek N. Drive, Suite 900 Denver, Colorado

 Economic development/jobs  Health care  Educational opportunities  More cost effective government use of broadband Why Municipal Broadband?

 Overcoming hurdles at the state level  Moving toward creating a business plan  Implementing it This Session:

“While it is difficult to measure the impact of many local efforts, these efforts (municipal broadband) should be encouraged when they make sense. However, 18* states have passed laws to restrict or explicitly prohibit municipalities from offering broadband services. Some states … have outright bans on municipalities offering any wholesale or retail broadband service. Other states … set conditions that make municipal broadband both harder to deploy and more costly for consumers. Restricting these networks in some cases restricts the country’s ability to close the broadband availability gap, and should be revisited.” * NBP was adopted in There are 21 states with restrictions today

NBP Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks. “Municipal broadband has risks. Municipally financed service may discourage investment by private companies. Before embarking on any type of broadband buildout, whether wired or wireless, towns and cities should try to attract private sector broadband investment. But in the absence of that investment, they should have the right to move forward and build networks that serve their constituents as they deem appropriate.”

 21 states have “barriers” or outright prohibitions to local government involvement in broadband: AL, AR, CA, CO, FL, LA, MI, MN, MO, MT, NC, NE, NV, PA, SC, TN, TX, UT, VA, WA, WI  Caveat: In February, FCC preempted state law barriers in NC and TN  Both decisions appealed to federal court State Barriers to Muni-Broadband

 Between 2005 – 2015, most new attempts to impose state barriers were defeated (not in Colorado)  Issue has become less of a private sector vs. government issue and more of a government and some in the private sector vs. service provider issue  Barriers that protect incumbents affect competition, availability and affordability of high speed access State Barriers to Muni-Broadband

 In 2010 FCC revised definition of broadband to 4 Mbps downstream/1Mbps upstream, and found for the first time that not all Americans were getting broadband  In 2014 FCC revised broadband definition again, this time to 25 Mbps downstream/3 Mbps upstream  How do we define broadband in Colorado?  It depends which section of our state statutes we are talking about A Little Recent Broadband History

Any local government that provides or is considering providing communications services in government facilities or to end user customers must consider how Colorado Senate Bill 152 will affect the offering of these services SENATE BILL 152

Legislative Background  In 2005, the Colorado General Assembly passed SB 152.  “Competition in Utility and Entertainment Services.” o Codified in C OLO. R EV. S TAT. A NN. § et seq.  Legislature’s stated intent behind the act:  Predictability, uniformity, and fairness in the cable television, telecommunications, and high-speed Internet access industries, especially where affected by municipal actions. o C OLO. R EV. S TAT. A NN. §§ (1), (2)(a), (2)(c)

SB 152 Definitions  In general, SB 152 prohibits local governments from directly or indirectly providing cable television service, telecommunications service, or advanced service. o C OLO. R EV. S TAT. A NN. § Legislative Background

SB 152 Definitions  Cable television service  The one-way transmission to subscribers of video programming or other programming service, as well as subscriber interaction, if any, that is required for the selection or use of the video programming or other programming service. o This is the same definition that appears in the federal Cable Act. Some Key Definitions

SB 152 Definitions  Telecommunications service  The electronic or optical transmission of information between separate points by prearranged means o This is a far broader definition than the way telecommunications service is defined in federal law Some Key Definitions

SB 152 Definitions  Advanced service  High-speed internet access capability in excess of two hundred fifty six kilobits per second both upstream and downstream o C OLO. R EV. S TAT. A NN. § (1) Note: the definition of “Advanced Service” here is different from the definition of “Broadband” in CRS § (2) Some Key Definitions

SB 152 Definitions  HB 1237 in 2014 amended some statutory telecom definitions  Ties state definition of broadband to federal definition  But did not make any similar change to the SB 152 definition of “Advanced Service,” so that “Broadband,” for most state law purposes tracks with federal law, but for local government involvement in “Advanced Service,” we’re still talking about 256 Kilobits per second Some Key Definitions

 The relevant portion of the legislation states that a local government “provides” cable, telecommunications or advanced service if the service is provided “directly” to one or more subscribers.  C OLO. R EV. S TAT. A NN. § (2) Analysis – “Providing Service”

 Does providing service to “subscribers” entail someone signing up and paying for the service?  NO  The statute defines “subscriber” as “a person that lawfully receives cable television service, telecommunications service, or advanced service.”  In other words, if a person is using the service with permission, he or she is a “subscriber” under state law o C OLO. R EV. S TAT. A NN. § (5) Analysis – “Subscriber”

 SB 152 identifies four ways in which a local government can engage in the provision of services:  The locality can provide a limited category of services that are not otherwise covered by the statute o Colo. Rev. Stat. Ann. § (5)  The local government can provide those services that private providers choose not to provide within the government’s jurisdictional boundaries o Colo. Rev. Stat. Ann. § (1)(a) Exceptions

 The local government may sell or lease to private entities excess capacity on its own network, if that excess capacity is “insubstantial” in comparison to the governmental uses of the network o C OLO. R EV. S TAT. A NN. § (3) o This is the section of the statute that has been used to support many public-private partnerships. o It works, but it is not without legal risk Exceptions

 Region 10: 6 counties and 23 communities  Delta, Montrose, Gunnison, Hinsdale, Ouray, and San Miguel Counties, as well as the Towns of Cedaredge, Crawford, Hotchkiss, Paonia, Orchard City, Crested Butte, Marble, Mount Crested Butte, Lake City, Naturita, Olathe, Ridgeway, Norwood, Ophir, Sawpit, Telluride, and Mountain Village, and the Cities of Delta, Gunnison, Montrose, and Ouray  Working with consultant NEO Fiber to plan a regional middle mile network that will leverage existing fiber that the electric cooperatives have installed for their power management operations A Real Life Public-Private Partnership

 Both Tri-State and DMEA have extensive fiber assets throughout the region  By negotiating access to existing fiber and working in collaboration with the electric companies, Region 10 was able to reduce the capital costs from $50 Million to less than $12 Million  Network will connect all communities and their anchor institutions  Anchor institutions will be able to get 1 to 10 gigabit service for a much more affordable price (from $15k/month for a gig down to $1500/month for a gig) A Real Life Public-Private Partnership

 Provision of services allowed after voter approval o C OLO. R EV. S TAT. Ann. § (1)  The ballot question in such an election must “pose the question as a single subject” and “include a description of the nature of the proposed service, the role that the local government will have in provision of the service, and the intended subscribers of such service.” o C OLO. R EV. S TAT. A NN. § (2) Exceptions

 Multiple jurisdictions of all sizes in all parts of the state have sought and received voter approval to restore authority for local action that existing pre-2005  Other than Longmont, most have not been challenged  Will that pattern continue? No one knows  Is an election requirement a barrier to broadband deployment? It depends who you ask!  So what do you do if your community is thinking about being involved in promoting broadband deployment, competition, availability and affordability? Voter Approval Exceptions

 Before you jump in the pool:  Study what kind of broadband availability you have today  Talk to your providers – find out about their plans and learn how the locality might encourage more investment  Determine what kind of public – private partnership opportunities might exist … there are many  Retain a consultant with expertise in working with public networks and public – private partnerships at the right time  Educate and seek feedback from your public  If you decide a vote is necessary to move forward with your options, jump in Voter Approval Exceptions

 Should SB 152 be amended:  to promote public-private partnerships, enabling governments with excess network capacity to make that infrastructure available to private entities without a vote?  to eliminate the language that makes government broadband in public buildings illegal?  to eliminate the vote requirement when a provider offers service that does not meet the federal broadband definition?  to restore complete local control to the entity most concerned and directly responsible for their broadband futures? Legislative Changes?

 Efforts were made last session to address the first two bullet points in the last slide … and were crushed in the Senate before a bill could even be introduced  What to do next?  Work with CML, CCI, CCUA  Work with your COGs and regional planning organizations  Educate your legislators! Legislative Changes?

Ken Fellman, Esq. Kissinger & Fellman, P.C Ken Fellman, Esq. Kissinger & Fellman, P.C Questions …