116 3rd St SE
Cedar Rapids, Iowa 52401
A handful of U.S. senators have introduced legislation designed to improve high-speed broadband access throughout the country. The Broadband Reform and Investment to Drive Growth in the Economy Act of 2020 (BRIDGE Act) proposes spending $30 billion to improve broadband access for those in rural and low-income areas. Although laudable in its broad intentions, the devil is truly in the details.
Buried toward the end of the BRIDGE Act is Section 15 — “Preemption of State and Local Restrictions on Municipal Broadband.” This section bars all states and local governments from prohibiting or “substantially inhibiting” local governments from establishing and providing broadband services. In other words, the BRIDGE Act would completely negate any state law or local ordinance stopping a municipality from taking over broadband at a local level. This sort of federal trampling of states’ rights to determine their own public policies regarding broadband is an abuse of federal legislative power and is an affront to Gov. Kim Reynolds, the Iowa Legislature and all Iowans as they work hard to ensure Iowans in all areas and of all means have access to broadband services.
Moreover, Section 15 will have the effect of contradicting and negating one of the core congressional findings supporting the BRIDGE Act, which acknowledges that competition among broadband providers has the potential to offer consumers more affordable and higher-quality options for broadband service. Yet, the Taxpayers Protection Alliance (TPA) has found consistently throughout the country, municipally-owned broadband systems are rarely financially sustainable without massive government subsidies.
Here in Iowa, there are no municipally-owned broadband systems that have not also partnered with and received financial assistance from a municipally-owned electric utility. The simple reason is that it’s too expensive for the government to compete with private-sector providers without the financial assistance of every electricity consumer in the locality, whether they like it or not. TPA’s report, “GON with the Wind: The Failed Promise of Government Owned Networks Across the Country,” shows that municipally-owned broadband systems of all sizes are failing, costing taxpayers billions of dollars.
Current Iowa law prohibits a local government from spending its property-tax-generated general fund money on subsidizing a local government-owned broadband system. This law was enacted to keep local governments from raising property taxes on all to pay for a broadband system that only some will use. The law also ensures true competition by preventing local governments from using tax money to undercut the private sector providers.
Section 15 of the BRIDGE Act would eliminate Iowa’s laws that promote fair competition and protect taxpayers from higher taxes used for financially-unsustainable government boondoggles. If the BRIDGE Act is adopted with the Section 15 preemption language, Iowans will see higher taxes and far less competition, exactly the opposite of what the sponsors say they want.
Chip Baltimore is a senior fellow of the Taxpayers Protection Alliance and a former Iowa state representative.