Despite the surprising defeat of a broadband expansion bill as the Legislature neared adjournment, Gov. Terry Branstad and lawmakers said the effort is important to rural Iowa and should be pursued next year.
The GOP-majority House defeated the bill last month, with nine Republicans joining with Democrats in opposing a measure they argued included too many tax breaks to telecommunications companies and not enough requirements for the services they would provide.
Supporters of the measure responded that without incentives, companies have little motivation to extend broadband into rural areas.
Branstad spokesman Jimmy Centers said the governor is committed to broadband expansion and will try again. He called broadband expansion essential to creating more well-paid jobs.
Rep. Guy Vander Linden, a Republican from Oskaloosa, voted against the bill but said there “absolutely” is a need to increase broadband coverage in rural Iowa. First, though, lawmakers need to work with telecommunications experts in writing a more detailed bill, he said.
About 24 percent of Iowa households don’t subscribe to home broadband service, either by choice or lack of availability, according to data released in October 2013 by the Connect Iowa initiative, a partnership that comprises both state and private entities. More than 113,000 school-age children don’t have access at home, and 143,000 Iowans are dial-up users.
“A lot of residences aren’t using broadband even when access is there,” said Phillip Brown, Connect Iowa’s director of state and federal policy. “If it’s not used, there aren’t any benefits at all.”
Telecommunications companies said offering broadband to everyone isn’t always financially feasible, given the expense of the necessary infrastructure.
“We want all our customers to have the access that they demand, but we build out where it makes business sense,” said Michael Sadler, assistant vice president of government relations for CenturyLink.
This leaves Iowans across the state, particularly in rural areas, without basic broadband options or the possibility to upgrade to higher speeds, said Amy Kuhlers, Connect Iowa executive director.
The proposal rejected by lawmakers was an attempt to entice companies like CenturyLink to expand or increase broadband service to unserved and underserved areas through income and property tax credits.
Opponents said the bill wasn’t specific enough about what companies needed to do to qualify for tax credits.
“All of it was a list of tax incentives to build, I don’t even know what,” Vander Linden said. “I just don’t think it was making any progress toward getting Iowans connected.”
Tax breaks included in the bill would have cost the state an increasing amount over the years, starting at $1.4 million in lost revenue in 2015 and rising to $7.5 million by 2021. Local governments also would have lost tax revenue beginning with $5.8 million in 2017, increasing to $10.7 million in 2021.
Vander Linden said a revised bill needs to specify the types of equipment that should be installed in an effort to keep up with changing technology. For example, there should be a requirement for more advanced equipment, such as fiber optic cables, to ensure longevity, he said.
Experts, including people who have experience laying cable or have worked to expand into underserved areas, should take the lead on technical aspects of the bill, he said.
“I don’t think the Legislature is in a position to be able to design the bill,” Vander Linden said.
Filed Under: Industry regulations