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Alabama bills would let municipal networks expand, offer tax credits to providers

By   /   March 16, 2017  /   News  /   No Comments

Bills introduced in the Alabama Legislature this session aim to facilitate rural broadband expansion — one by offering tax credits to private providers and the other by allowing the expansion of municipal broadband.

Marshall County Legislative Office photo

SCOFIELD: His bill would offer incentives for telecom companies to expand their efforts in Alabama.

Sen. Clay Scofield is sponsoring SB 253, nearly identical to legislation he introduced in 2016 that would amend the Alabama Renewal Act to provide an income tax credit equal to 10 percent of the investment in new, qualified broadband telecom network facilities and a 10-year property tax exemption on those facilities. The bill also provides an exemption from sales and use tax for equipment and materials used to operate those facilities.

Scofield said in 2016 he introduced his legislation too late for it to get any traction. SB 253 is faring better, pending a third reading in the Senate Transportation and Energy Committee, with an amendment added that would sunset the bill in 2025.

“I feel like it has a better shot this time,” the Guntersville Republican told Watchdog.org on Thursday.

Scofield previously said, “I think we really need to lean on the expertise of the private sector to get the job done. I think this is the appropriate way to get broadband to our rural areas.”

Gov. Robert Bentley announced a major effort to push rural broadband expansion last year, including starting a state broadband development office, but a scandal related to an alleged affair with a former staffer and possible misuse of state funds has led to discussions of his impeachment, putting his agenda on hold.

RELATED: Could scandal derail Bentley’s Alabama broadband plans?  

Sen. Tom Whatley, R-Auburn, whose district includes the eager-to-expand Opelika Power Services, has introduced SB 151, which would allow government-owned municipal networks to expand, but contains more free-market and taxpayer-friendly elements than previous legislation that stalled in committee.

His bill requires that no public funds can be used to directly finance the expansion of a public provider; instead, “only revenue bonds, cash, grants, loans, or matching dollars may be used as a source of financing.”

Municipal broadband networks that expanded under SB 151 couldn’t expand outside county lines.

Alabama Legislature photo

WHATLEY: His bill would allow municipal broadband expansion, with some limitations.

The legislation also would require public providers to “give a 12-month notice of the intent of the public provider to serve an area so that any private provider currently serving the area may determine if it will serve the area with the same level or capacity of service to be provided by the public provider.”

That language doesn’t state how potential municipal broadband network expansion would be affected if private providers decided to improve their services, making the wording too vague for David Williams’ taste. The president of the Taxpayer Protection Alliance visited Montgomery this week to meet with lawmakers on broadband expansion and other issues.

“There isn’t a lot of certainty in that language,” Williams said of Whatley’s bill, which will be discussed in the Senate Transportation and Energy Committee on April 5.

Williams is a fan of Scofield’s legislation — of which Whatley is one of 18 co-sponsors.

“We like it a lot,” he said. “I think that really is the right way to go.”

Williams said telecom providers could “quiet the Whatleys of the world” by doing a better job of serving rural America, which could quell some of the push for governments to step in and aid broadband expansion in those harder-to-reach areas.

“The private sector needs to get its act together,” he said. “The best way for them to stop this discussion is to build out to these areas — I realize it’s often not profitable — or find other ways to deliver [broadband].”

Johnny Kampis reports on national issues for Watchdog.org. Contact [email protected] and on Twitter.

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Johnny Kampis is National Watchdog Reporter for Watchdog.org. Johnny previously worked in the newspaper industry and as a freelance writer, and has been published in The New York Times, Time.com, FoxNews.com and the Atlanta Journal-Constitution. A former semi-professional poker player, he is writing a book documenting the poker scene at the 2016 World Series of Poker, a decade after the peak of the poker boom. Johnny is also a member of Investigative Reporters and Editors.