In surprise vote, House kills Democratic municipal broadband proposal

Democratic legislation that would allow local governments to own or operate broadband systems died in a final House vote Tuesday morning after a dramatic change of fate that saw dozens of Republicans who had previously supported the proposal vote against it.

House Bill 422’s sponsor, Rep. Kelly Kortum, D-Bozeman, told the Daily Montanan that he wasn’t even expecting his bill, one of several Democratic broadband expansion bills this session, to pass the preliminary second-read vote — so he was doubly surprised to see it clear that hurdle only to fail on third reading, 35-64.

He attributes its failure, at least in part, to last-minute lobbying efforts by established telecommunications companies in Montana that were caught off guard by the bill’s passage through the process.

“I expected it to fail on the House floor. It didn’t, and then the lobbying really began,” Kortum said.

HB422 would have repealed existing law banning cities and towns from operating an ISP. Kortum and other Democrats presented the bill as one that would help bring connectivity to so-called “donut holes” of limited service in rural and even some urban areas in the state.

“(Providers) just do not show up in those small towns,” he said.

At the bill’s hearing, large telecom companies showed up in opposition, warning that municipal broadband could really mean a foolhardy taxpayer-funded business venture with no guarantee of success, and that it could crowd private providers out of the market.

Kortum said he figured a GOP amendment to the bill clarifying that a city or other government entity could invest in broadband infrastructure only in cooperation with a private ISP or if it contracted with a private provider would assuage some of those concerns, and he credits the amendment to the wave of Republican support for the bill, however short-lived.

“As initially written, it was maybe a little bit leaning heavily towards the cities,” Kortum said. “But with the amendment from Representative (Steve Galloway, R-Great Falls), he would make sure that private enterprise knew they were included.”

Galloway was one Republican who didn’t switch his vote on the bill. But many others did.

On Monday, lawmakers received a series of talking points on the bill from the Montana Telecommunications Association urging a no vote on HB422, warning that municipal broadband was too expensive, too risky and lacked successful test-cases.

“The most cost effective way to address broadband demand is to facilitate private investment in broadband infrastructure,” the document said.

“A number of private telecoms providers started engaging with members who may have misunderstood what the bill did (following the second reading vote),” said Geoff Feiss, the association’s general manager. “One of our concerns about 422 was that you don’t need government competing against the private sector, what you need is private investment.”

Feiss said he made these arguments in committee, but that there wasn’t enough time to “gather all the forces” to rally against the bill before it passed second reading.

“It’s very unusual to flip as many votes as dramatically,” he said.

Kortum said he sees the reversal on the bill as evidence of moneyed interests wading into the political process to defend their turf.

“I disagree with the premise from that handout, and that I’ve heard before from lobbyists, that the city competing with the telecoms is somehow noncompetitive,” Kortum said. “I see the problem with asking taxpayers to compete with private enterprise when private enterprise is there, but where we do have some of these private enterprises it’s either a monopoly or a co-op that doesn’t have the funds.”

Lawmakers in both parties have made broadband expansion in rural and tribal areas a top priority this session. One other Democratic broadband proposal, HB494, has already advanced, as have several from the GOP.

Kortum said the short-lived bipartisan enthusiasm for his bill could be a positive sign for future efforts, albeit not for the present.

“We’re trying to show the people of Montana that we’re trying … but we’re getting thwarted at every turn,” he said.