Broadband Communities

MAR-APR 2018

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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BROADBAND POLICY 3 6 | B R O A D B A N D C O M M U N I T I E S | w w w. b r o a d b a n d c o m m u n i t i e s . c o m | M A R C H / A P R I L 2 0 1 8 subscription-based voice, data, graphics or video services that generate annual intrastate net retail revenues of $500,000 or more, such as Netflix or Hulu. Traditional providers have great difficulty building acceptable business plans that will support buildouts and sustainable operations in rural communities and to farms and ranches. But traditional providers aren't the only businesses that profit from broadband networks – application providers do, too. at's why HB 2563 requires those who benefit commercially from infrastructure investments to also contribute financially. e analogy that seems to resonate with legislators is that if highways were constructed to accommodate interstate trucks but only intrastate drivers paid for the highways, interstate vehicle owners would benefit from the investment in infrastructure without making a financial contribution. Every state recognizes that highway construction standards to accommodate the impact of interstate truck traffic require those vehicle owners to pay prorated fuel and other taxes to support the infrastructure they use. As expected, there was great skepticism among stakeholders that expanding the base of entities that pay into the Kansas Universal Service Fund is legal. However, despite the assumptions of some opponents, the bill does not tax the content that the subscription services provide; rather, it requires those who financially benefit from the infrastructure investment of others to contribute to making that infrastructure and those services ubiquitously available. BROADBAND AND STATEWIDE FRANCHISE Another Kansas bill, HB 2449, seeks to redefine the term "competitive video service provider" to mean either an entity that provides video service or one that provides a packet delivery system for video service. e existing state statute defines video service as video programming services provided through facilities without regard to delivery technology, including internet protocol technology. Many broadband providers do not want to provide content, and they reportedly face obstacles to deployment in some smaller communities because of community leaders' lack of knowledge about broadband deployment issues, unusual fees or other requirements to receive a franchise, and requests to pay for municipal services unrelated to rights- of-way access through the franchise agreement. HB 2449 seeks to address those concerns by making the packet delivery technology, not the video product, subject to a state franchise agreement process. Many municipal governments object to another statewide franchise; in addition, many video service providers also object, presumably because of the threat of increased competition. Legislators almost unanimously support a competitive marketplace as a means to stimulate innovation and control price increases; at the same time, legislators are elected officials and may place great weight on the opinions of local officials and organizations that support legislators' re-election. Objectively, a statewide franchise for the underlying technology that enables video services makes more sense than a franchise for the service itself. ACCESS TO PUBLICLY OWNED FIBER Finally, Kansas HB 2462 provides that dark fiber owned or operated by a state or local government shall be leased to any private sector broadband provider on a cost-plus basis upon request from the private sector company. State and local governments may retain enough dark fiber to meet reasonably anticipated 50-year needs and are not required to enter into any leases that impinge upon such capabilities. Cost-plus is defined as the prorated cost to install fiber within an existing fiber optic cable and any relevant supporting equipment plus a reasonable lease payment for the use of the fiber. e objective of this bill was not to usurp local government or state agency control of its infrastructure; rather, it reflected the realization that reaching unserved and underserved rural Kansans (using the broadband definition referenced earlier) is less expensive when existing fiber is used. However, as expected, local governments objected to the usurpation of their authority, and some broadband providers wanted to expand the measure to include greater access to above-ground municipal infrastructure, including poles and buildings. I deliberately restricted the bill's focus to dark fiber because I saw this measure as a cost-effective way to reach rural residents rather than as a means to improve competition within urban communities. CONCLUDING THOUGHTS e State Model Code Working Group and the resulting Kansas legislative initiatives attempt to reduce administrative impediments and provide financial incentives in a technologically neutral manner to make broadband deployment in rural areas affordable for providers and customers. e initiatives also address minimal performance standards necessary for rural residents to have the same economic, social, health care, educational and recreational opportunities as residents of larger communities with competitive marketplaces. Finally, the goal is to ensure that the two digital divides – availability and capability – are substantially reduced, if not eliminated, in a manner that maximizes private sector opportunities and minimizes the need for government subsidies. is summer, the FCC commissioners will determine which of the State Model Code Group's recommendations are included in a Rural Broadband Deployment Incentives Code for states to consider in 2019. v Rep. Tom Sloan (R-Lawrence) is serving his 12th term in the Kansas House of Representatives. Contact him at Tom. Sloan also serves on the State Model Code Subcommittee of the Broadband Deployment Advisory Committee convened by the FCC.

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