Ohio's state capitol building seen during daylight hours.
Enlarge / The Ohio Statehouse in Columbus.

Getty Images | Joseph Sohm

Ohio’s Republican-controlled legislature is on the verge of imposing a state law to dramatically restrict the rights of cities and towns to build and operate municipal broadband networks.

The Ohio Senate on June 9 approved a budget bill that contains an anti-municipal broadband amendment. It’s not a done deal yet, and advocates for public networks are urging the legislature to strip the amendment from the final budget. The budget bill is expected to be hammered out within the next two weeks.

If passed, the proposed law could kill existing broadband services and prevent new ones from being deployed. There are reportedly 30 or more municipal broadband providers in Ohio that “would not be allowed to operate so long as there is a private-sector company operating in the area, as there are in most, if not all of the cities.”

“If the amendment contained in the Senate’s budget survives the budget process, it would make Ohio the first state in a decade to erect barriers to the establishment and expansion of municipal broadband networks,” according to the Community Networks team at the Institute for Local Self-Reliance (ILSR), which has been tracking the legislative process.

10Mbps Internet counts as “served”

The amendment would let cities and towns provide broadband service only to unserved areas and uses a definition of “unserved” that reportedly makes over 98 percent of the state ineligible for municipal broadband. The proposed law defines “unserved areas” as those without access to service with download speeds of at least 10Mbps and upload speeds of at least 1Mbps. Any cable provider and even many DSL lines can provide those speeds—but no one considers DSL to be modern broadband.

The legislation would also prohibit a city or town from offering service outside its borders, even if a nearby town has areas that meet the “unserved” definition. The proposal “would prohibit the new construction of and limit the ongoing provision of broadband and other services provided by existing government-owned networks in the state of Ohio, including restricting such networks to solely providing service to unserved areas within the political subdivision’s jurisdiction,” the Ice Miller law firm wrote in an analysis of the bill.

At the 10Mbps/1Mbps standard, “[i]t is estimated that 98.28 percent of Ohio households have access to service at this speed threshold, leaving only 1.72 percent of the population. Other uses of such networks would need to be abandoned and services terminated,” the law firm wrote.

Making matters worse for municipalities, the amendment “language prohibits a political subdivision from using federal funds or public services revenues to fund or subsidize the construction, deployment, purchase, lease, or operation of broadband facilities or the provision of broadband service to subscribers,” Ice Miller wrote.

Cleveland may sue if law is enacted

The amendment was condemned in a resolution by the Board of Commissioners of Medina County, which built its own broadband network and is now expanding it. The board said it is “strongly opposed to any measure that would hinder or impose excessive requirements upon a governmental-owned and operated broadband service from existing, growing, and providing services to their residents and businesses.”

Cleveland City Council President Kevin Kelley said the city would challenge the restrictions in court if they are enacted, according to Cleveland.com.

“It is just a transparent attack on municipalities and our efforts to extend broadband services for those who need it the most at a time when we need it the most,” Kelley said, according to the news site. “It is absolutely irresponsible legislating. It is done as a favor to the legacy carriers and we’re going to do everything we can to fight it.”

Charter, the second biggest broadband provider in the US after Comcast, covers most of Ohio. AT&T, Frontier, and WOW have significant presences in Ohio, while Comcast serves just a small portion of the state.

House and Senate will hash it out

Last week’s vote to restrict municipal broadband “was along party lines, with 25 GOP State Senators voting in favor of the Senate budget bill and the chamber’s eight Democrats voting against it. With the House having passed its budget bill in April, now the two legislative bodies have until June 30 to negotiate the differences,” the ILSR wrote.

The House and Senate budget bills have plenty in common, but the two chambers are “split on issues like the size of an income tax cut, school funding, rural broadband, and access to subsidized childcare,” The Columbus Dispatch wrote.

Ohio Republicans have large majorities in both the Senate and House of Representatives, and Gov. Mike DeWine is a Republican.

It’s not even clear who proposed the new law. “The language, inserted without prior public discussion during recent state Senate deliberations on Ohio’s two-year budget, is drawing condemnation from numerous sources. Officials have not said who put the language in the Senate budget document, only that they learned of it for the first time last week,” the Akron Beacon Journal wrote on June 13.

Republican State Rep. Rick Carfagna, who was government relations manager for Time Warner Cable (now Charter) from 2002 to 2017, is one of the legislature’s more active lawmakers on broadband policy. He couldn’t have submitted the amendment because he isn’t in the Senate, but he could play a role in House-Senate negotiations over the anti-municipal broadband proposal.

At TWC, Carfagna “oversaw legislative and regulatory issues at the local, state and federal levels” and was “the company’s primary liaison to more than 400 municipalities and townships throughout Central and Southeast Ohio,” his official state House bio says. Carfagna sponsored a separate bill that became law last month and set the 10Mbps/1Mbps broadband standard that the pending anti-municipal broadband proposal also now uses.

The Ohio Republicans’ standard of 10Mbps/1Mbps isn’t even half as fast as the 25Mbps/3Mbps threshold the Federal Communications Commission adopted in 2015. Some US senators and FCC Acting Chairwoman Jessica Rosenworcel have called for a rise to 100Mbps for both downloads and uploads in the FCC standard, which is used to measure how many people lack modern broadband access. Rosenworcel would be able to make that happen once President Biden gives the FCC a Democratic majority.

Proposed funding restrictions

Under the proposed Ohio law, even a city or town that contains an area meeting the restrictive “unserved” definition would have to jump through new hoops to build a network and comply with various restrictions on how to fund the network. Before providing service, a city or town would have “to (1) provide notice in a newspaper of its intent to provide broadband service in an unserved area and (2) obtain the same approvals and authorizations that private entities must obtain to construct and deploy broadband facilities in public rights of way,” the amendment says.

Cities and towns would not be allowed to pay for the broadband network with revenue from other public services, such as electric, water, and gas. The proposed language also:

Requires the political subdivision to perform certain other tasks such as (1) preparing a formal business plan for the network, (2) establishing measures to protect residents from any increase in taxes or fees to offset any losses if the network performance is poor or demand for the service is insufficient, (3) providing information demonstrating that the network and provision of broadband service does not adversely affect the political subdivision’s credit rating, and (4) establishing a mechanism to refund any profits to taxpayers if the provision of broadband service through the operation of the network generates a net profit.”

Two states removed restrictions this year

Until a few months ago, 19 US states had laws restricting municipal broadband, passed for the benefit of private Internet providers that don’t want to face competition from public networks. South Carolina is the most recent one, having imposed its law in 2012.

At the federal level, congressional Republicans have been trying to ban municipal broadband nationwide, while Democrats have tried to preempt the restrictive state laws.

Washington state lawmakers voted in April to end their restrictions on municipal broadband, and Gov. Jay Inslee approved the measure in May. “This critical leap forward in Washington drops the number of states with laws restricting community broadband to 17,” the ILSR wrote at the time.

Arkansas also recently ended many of its restrictions on municipal broadband. The list of states that impose significant limits on municipal broadband does not include Ohio, for now.

“We will stay in business”

The ILSR published a fact sheet describing existing networks in Ohio that might have to be abandoned if the proposed law is enacted. One of those is in Fairlawn, which has a population of about 7,500:

Fairlawn’s city-run FairlawnGig network has consistently ranked as one of the fastest ISPs in the country, serving residents and businesses in Fairlawn, Akron, and Bath with affordable gigabit Internet services. The slowest service tier delivers 300Mbps symmetrical speeds for $55/month. The municipal network has resulted in more businesses choosing to locate in Fairlawn, and at least 700 jobs can be directly attributed to the network. In recent subscriber surveys, 95 percent of respondents rated FairlawnGig’s service as “very good to excellent,” with some customer testimonials referring to the network as “a life saver” throughout the pandemic.

Fairlawn is ready to fight for its network, Mayor William Roth said. He told the Akron Beacon Journal that he’s confident the proposed law is “an overreach” that would be overturned in litigation. “As far as we’re concerned, we will stay in business,” he said.

Disclosure: The Advance/Newhouse Partnership, which owns 13 percent of Charter, is part of Advance Publications. Advance Publications owns Condé Nast, which owns Ars Technica.