Regulatory Barriers Persist, Rural Broadband Advances at a Snail’s Pace

Rural broadband expansion is caught in a regulatory tug of war that started in 1999. State legislators authorized municipal utilities to provide internet services at a time when few private internet service providers (ISP’s) were willing to reach into certain fledgling market areas. Municipal providers were “authorized” but limited to their electric service areas, essentially boxed in by regulatory barriers. Slowly, city-owned utilities entered the broadband race and proved the viability of community broadband. Chattanooga’s municipal electric system EPB soon became known as the world leader in broadband speed, efficiency and competitive internet pricing. Now that internet access has become essential for daily life, business and education, the demand for broadband in rural areas has exploded. Unfortunately, the state’s largest private providers have carved out their high-profit territories and sheltered in place, leaving forty percent of the population in a broadband dead zone, including students that need internet service to compete in the job market, and rural businesses that require high capacity data transfer. Tennessee legislators have adhered to a decades-old regulatory model and refused to codify the FCC minimum definition of broadband, 25Mb/s download, 3Mb/s upload.

Recognizing that private providers were unwilling to serve less populated areas, state lawmakers proposed legislation in 2015 that would remove regulatory barriers, allow joint ventures among cities, counties, private companies, and utilities, essentially making an effort to open the internet market to new stakeholders. The three big ISP’s in Tennessee took notice of the proposed bills and went into panic mode, some quietly speaking of lawsuits if the state enacted regulatory reform. Those ISP’s have successfully fought to keep protectionist laws on the books that are grounded in the Tennessee Telecommunications Act of 1999.

Tennessee State Senator Janice Bowling (R-Tullahoma) is the tip of the deregulation spear, consistently proposing free market internet legislation to lift restrictions and help rural citizens with broadband access, deregulation that would create internet build-out at no cost to state taxpayers. The big providers know that Bowling’s plan would work; fearing new competition, they lobby heavily for protective regulation. Instead of supporting the free-market legislation proposed by Bowling, ISP’s and cooperative utilities turned to then-Governor Bill Haslam who proposed spending forty-five million dollars to provide grants and tax incentives to qualified ISP’s. Haslam’s plan was enacted and is called The Broadband Accessibility Act of 2017, PC228. In Jefferson County, Appalachian Electric Cooperative received a 1.76-million-dollar broadband expansion grant from the Tennessee Department of Economic and Community Development, with the requirement of providing fiber optic infrastructure by March 2021 to about 1800 of its 47,000 members. The utility is currently working to install internet fiber to limited areas around Dandridge and Jefferson City that lie outside the state grant funding area. No firm timetable is established for the remainder of the AEC system; but other cooperative utilities with similar demographics and geography reportedly expect system-wide buildout to take about ten years.


David Seal is a long time educator in Jefferson County, as well as a recognized artist and local businessman. He has also served Jefferson County as a County Commissioner and is a lobbyist for the people on issues such as eminent domain and broadband accessibility on the state level.

This article originally appeared in the Jefferson County Post.

ArticleDavid Seal