(The Center Square) – The Iowa Senate is considering a bill to restructure grants to broadband companies in order to increase services in underserved areas of the state.
A subcommittee of the Iowa Senate’s Commerce committee met Feb. 11 to discuss the bill, SSB 1089, which would require the office of the chief information officer to periodically determine whether a communications service provider facilitates broadband service that meets a series of tiered download and upload speeds.
The tiers – 1, 2 and 3 – would determine the level of grant funding available through the Empower Rural Iowa Broadband Grant Program to companies.
The office would grant up to 75% of a communications service provider’s project costs for tier 1 broadband service: minimum download speed of less than 25 Mbps and minimum upload speed of less than 3 Mbps; Tier 2, which is eligible for up to 50% project costs funding, would require download speeds of 25 Mbps to 50 Mbps and a minimum upload speed of at least 3 Mbps; and Tier 3, minimum download speed of 50 to 80 Mbps, would be eligible for a 35% project costs allotment.
Jeffrey Westling is a Technology & Innovation Policy Fellow at the Washington, D.C., R Street think tank.
“Iowa actually does a really good job because the state passed what is generally known as a small cell bill,” Westling told The Center Square in an email.
Iowa received a B+ and a score of 88 on the 2020 Broadband Scorecard Report that R Street released this week.
The report compares states based on the laws they use to govern the regulatory review process for broadband deployment. The factors involved include local government’s management of the public rights-of-way that broadband providers need access to, permitting review, franchising and zoning.
“These bills establish shot clocks and fee caps for review of deployment of small wireless facilities (basically small cell phone towers which are necessary for 5G networks)," Westling wrote. "In Iowa, this means a local government must process an application to attach a small cell to an existing structure within 90 days, and localities can only charge what it costs to process the review.”
Westling also praised Iowa’s laws for wireline providers and limiting franchise fees.
“All of these types of provisions lower the regulatory costs on broadband providers as they deploy the infrastructure, making the business case stronger for deployment to more communities,” Westling said.
“It may sound benign, but providers often need to get thousands of permits for just a single city, and the costs quickly become a barrier as the providers need to sort through different rules and lengthy delays. The major markets will still see deployment regardless, but communities on the edge may have to wait longer or pay more for next generation services.”
Even with streamlining regulations, however, deploying infrastructure in many communities does not allow providers to be profitable for a basic connection, let alone next generation networks, Westling explained.
“That is why we have seen many states begin to explore options like grant programs, which target unserved areas of the state. Subsidy programs go beyond the scope of our scorecard, but it is important for state legislators to remember that grants still come from the taxpayers, and regulatory red tape can limit the value of each dollar spent. Therefore, states should continue to look towards streamlining local review processes even if they decide to pursue deployment subsidies,” he said.
Subsidies and grants can help or even be necessary, but the requirements of the program make a difference, he noted.
“Users tend to not need upload speeds similar to download speeds, and focusing subsidies on 100 Mbps upload seems very excessive to me when many people can't even get connected,” Westling said.