With the stroke of a pen — or maybe 20 strokes from 20 pens — Gov. John Hickenlooper on Monday signed into law three bills that could change rural broadband in Colorado as well as the economic future of rural communities that depend on it.
Senate Bill 2 changes how Colorado will finance rural broadband. It will eventually take most of the dollars that go into a state fund known as the High Cost Support Mechanism (HCSM) and route those dollars to the state’s broadband deployment fund.
The HCSM is a surcharge, paid by customers on landline bills, that goes to companies that provide landline service in rural communities. The HCSM covers the difference between the high cost of those services and what the companies can charge, under rates approved by the Public Utilities Commission.
But with more Coloradans moving away from landlines and exclusively to cellphone service, the HCSM fund has been in decline over the last few years, from a high of more than $50 million to $35 million last year.
Currently, CenturyLink Inc. gets most of those dollars, about $30 million out of the $35 million that went into the HCSM in 2016-17. Sixty percent of CenturyLink’s share will go to the broadband fund beginning in 2019, with 20 percent every year thereafter until it’s all in the broadband fund.
To avoid a one-year delay in funding, another $6.5 million that has been sitting in an escrow account will also head to broadband funding and can be awarded in grants later this year.
The broadband fund could eventually gain as much as $150 million over the next five years for broadband infrastructure in rural communities. The bill also sets a minimum speed of 10 megabytes per second (Mbps) downloading and 1 Mbps upload, although it also sets a goal of reaching the federal minimum of 25 Mbps down and 3 Mbps up. That’s a major increase for rural communities that have complained that CenturyLink provides high-speed internet with speeds so slow that little more than email is possible.
Senate Bill 2 is the culmination of years of work by its sponsors and backers, including House Majority KC Becker of Boulder, Republican Sen. Don Coram of Montrose, Speaker of the House Crisanta Duran, Senate President Kevin Grantham, Assistant Minority Leader Lucia Guzman of Denver, Democratic Rep. Barbara McLachlan of Durango and Senate President Pro tem Jerry Sonnenberg of Sterling.
Hickenlooper recounted that the first conversations he had with many of those lawmakers were about broadband and what it would take to get high-speed internet to rural Colorado.
“It takes a tremendous amount of willpower and effort” to come up with the compromises that make this happen, Hickenlooper told about two dozen assembled to watch the bill signing. The governor called the new law the “largest increase in broadband efforts to rural parts of the state in the history of Colorado. You can’t have a sincere discussion about economic development until you are able” to make rural broadband a reality, he added.
Rural broadband has been on the Hickenlooper agenda for at least the last three years. During his 2018 State of the State, Hickenlooper said Colorado had moved from 60 percent to 80 percent coverage in rural Colorado in the last two years. “We’ll be at 85 percent by the end of this year and 100 percent by 2020,” he said.
The second bill, Senate Bill 104, also deals with the finance side of rural broadband. This bill, sponsored by Democratic Sen. Kerry Donovan of Vail, McLachlan and Republican Rep. Yeulin Willett of Grand Junction. The measure will allow the broadband board to seek federal dollars later this year and into the future available from a Federal Communications Commission auction. A similar measure passed in January.
House Bill 1099 deals with the right of first refusal, an issue that surfaced after a local provider, Elevate, put in a bid to provide high-speed internet in Ridgway. CenturyLink had a right of first refusal and exercised that right, but instead of the fiberoptic lines proposed by Elevate, CenturyLink put in much slower copper lines.
The measure still allows a company to exercise its right of first refusal but the company must match the speed and price offered by the first bidder. McLachlan, Coram and Republican Rep. Marc Catlin of Montrose carried that measure.