Industry likes incentives to connect all Iowans to broadband, would like more incentives better

DES MOINES - A bill to Gov. Terry Branstad and legislators hope will encourage the building out of broadband networks across Iowa by offering $5 million in grants and property tax breaks is getting a lot of love from the industry.

However, lobbyists who crowded into a hearing on the bill Thursday made clear they would love it more if the incentives were bigger.

Michael Sadler of CenturyLink told lawmakers House Study Bill 104 offers the right 'framework” to provide broadband to more Iowans.

Then he encouraged lawmakers to 'make the bill more robust.”

Dave Duncan of the Iowa Communications Alliance that represents 130 telecom providers encouraged a five-member House Commerce Committee panel to think about expanding the three-year property tax exemption on new broadband infrastructure.

'The larger the incentive the quicker more build-out would happen,” Duncan said. 'It is expensive, so the more incentives the better.”

House Commerce Committee Chairman Peter Cownie heard the message, isn't sure the state can afford more incentives.

'I'm not sure how much more robust we can be with this budget,” Cownie said.

However, he's encouraged that the industry is generally supportive.

'My goal is to get started,” he said. 'There's no one bill that will get every Iowan connected.”

Of course, that's the goal of Branstad's proposal. This year, he calls the plan the 'Connect Every Acre,” an acknowledgment of the explosion in data usage on farm machinery and to monitor crops. Speaking to the Commerce Committee earlier this week, one industry representative called the plan 'Connect Every Pig” because of the use of broadband to monitor pork production facilities.

Although there are urban and suburban areas that are underserved by broadband, the focus largely is on connecting rural Iowa. Uses there include providing connectivity for health care, smart cars, positive train control and pipeline monitoring, Mark Lewellen of Deere and Co., told the Commerce Committee.

Former Democratic lawmaker Phil Wise, now with the Department of Education, said the department doesn't believe it will be possible to deliver a first-class education - the content and new generation assessments 'regardless of ZIP code” without a broadband network covering all of Iowa.

The cost will be substantial, lobbyists said. Cell towers can cost $100,000 each, Lewellen said, but the real cost is connecting them to the fiber optics network.

Putting fiber-optic cable in the ground can cost as $5,000 a mile and more depending on terrain and time of the year, Sadler said. Duncan estimated the cost can be $2,000 to $4,000 per connection or customer in cities and as much as $10,000 per connection in rural areas.

Cownie plans more subcommittee meetings on HSB 104 and bringing more interested parties to testify before the full committee.

FYI

House Study Bill 104:

 Identifies the State of Iowa Office of the Chief Information Officer to coordinate statewide broadband availability and access between the public and private sector.

 Creates the Iowa Farms, Schools and Communities Broadband Grant Program to award grants to communication service providers to invest broadband access to farms, schools and communities. Governor Branstad's Fiscal Year 2016 budget includes $5 million for these grants.

 Provides a three-year 100 percent property tax exemption for broadband infrastructure for infrastructure in place on or after July 1, 2014.