Montana Legislature takes up $350M broadband plan

Daily Montanan

About three billion good ideas — that’s what’s at stake over the coming weeks, as one lawmaker put it, as the state Legislature works to authorize or appropriate more than $900 million of Montana’s roughly $3 billion potential allotment from the American Rescue Plan Act.

That act is the most recent COVID-19 aid package to come out of Congress.

More or less everyone in and around Helena is trying to get in on the spending package: state agencies, lawmakers, nonprofits, business groups and more. It represents a singular opportunity to make significant investments in infrastructure, health, social welfare and more, all without the politically-imposed spending limits that dominate budget conversations in most years.

“It’s amazing how in two days you can have more than three billion good ideas,” said, cheekily, Sen. Ryan Osmundson, R-Buffalo, one of the appropriators working to push legislation to authorize funding under ARPA through the two chambers in the coming days and weeks.

On Friday, lawmakers on a special joint committee heard several of those ideas in the form of recommendations from policy subcommittees that have met throughout the week, divvying up the ARPA funds by subject area. This weekend, the special committee will cobble those recommendations into workable bill language that will officially debut following budget negotiations next week.

One of those recommendations — something that would take a sizable chunk of that $1 billion sum — is for an ambitious, wide-ranging and still somewhat vague broadband expansion program under the state Department of Commerce that promises to end Montana’s perennial slump as one of the least connected states in the nation. According to the agency’s figures, less than half the population has broadband connectivity in more than a dozen counties in Montana, though broadband mapping data are not always complete.

Scott Osterman, the director of the department, came to the Capitol this week with a plan: $350 million to map connectivity deficiencies in the state, to assemble a broadband management task force, and to put fiberoptic cable or towers in the ground in as many places as possible with the goal of delivering “high-capacity future state broadband to 100% of Montana citizens and businesses.”

“We need to start acting by putting fiber in the ground in 60 days,” Osterman told a legislative subcommittee.  His goal is to achieve symmetric, 100-megabit-per-second speeds by 2025, by which time most of the COVID-19 aid will have expired, with the state on the path to even faster developments in the years following.

Broadband development is one of the few areas in the recent stimulus bill that doesn’t require a direct connection to COVID-19 mitigation for investment to occur. Nonetheless, the virus has caused a reckoning in this and other states that has laid bare Montana’s near-last in the nation broadband connectivity, something that’s become only more noticeable as demand for telemedicine, remote working and schooling has grown. The problem is especially acute in rural and tribal communities, though Osterman said that even urban areas can struggle with connectivity.

“If we get fiber to 90, 95, 98 percent, of Montanans, we’re in a position for anyone to get anything they’d need from their broadband connection,” said Geoff Feiss with the Montana Telecommunications Association.

Exactly how this will occur — whether through incentives, fiberoptic manufacturing in Montana, regulatory changes or even municipal broadband, the subject of a Democratic broadband bill tabled earlier in the session — isn’t entirely clear. But what’s obvious, contends Osterman, is that the state lacks a clear vision for making broadband happen.

Montana’s broadband coordinator is state librarian Jennie Stapp. She said this week that other states that take their connectivity seriously have whole boards or advisory groups tasked with steering broadband development. Montana just has Stapp.

“I sincerely believe that this is one of the driving reasons that Montana is falling short, because we don’t have that coordinated approach,” she said.

Broadband, and infrastructure more generally, has been top-of-mind this session as one of the few areas that Democrats and Republicans generally find agreement. This has created a sense of almost utopian optimism behind the broadband projects that ARPA makes possible. Even before the COVID-19 money came down, lawmakers from both parties were pushing out broadband bills; now that the money is here, both Democrats and Republicans want to see their projects funded.

The former caucus, for example, introduced legislation creating a state broadband manager, something similar to Osterman’s vision of a task force. Democrats have also proposed a revolving loan program to make long-term investments in broadband possible, something they want to see funded by ARPA to the tune of $200 million, among other initiatives.

“What I’m gonna brag about: I think we really started the conversation,” said Rep. Katie Sullivan of Missoula, one of the Democratic lawmakers most vocal on broadband issues, and the sponsor of the manager bill. “We’re talking grants, loans, barrier removing, the task force. Now we have this $350 million, and we’ve got four or five great ideas…and I hope that they can all work together.”

Discussion this week suggested that lawmakers would look to SB297, an existing bill from Sen. Jason Ellsworth, R-Hamilton, as a vehicle for the funds the Department is requesting. As introduced, that bill would have created a grant program, though it’s not yet clear how much of that language will remain or how much will be subsumed by amendments developed this week. It’s also not clear how much of the available money will go to which projects — both Democrats and Republicans are looking to pull from the same pot of money.

“This is the railroad, this is the highway, this is the electricity that was first brought to this state,” Ellsworth said in committee this week.

Another uncertainty is whether the state can even pursue another one of Ellsworth’s broadband bills, SB51, which exempts certain fiberoptic and coaxial cable from property taxes for a five-year period, due to language in ARPA preventing states from using the money to finance tax cuts.

Legislative Fiscal Analyst Amy Carlson told lawmakers Friday they could still pursue their program of income tax cuts so long as they keep all operating revenues from the normal budgeting process separate from the money from the COVID-19 aid. But SB51 is unique: If the Legislature approves a massive, federally funded broadband expenditure in the Department of Commerce, it would likely be financing fiber projects that would then see considerable tax reductions.

“This is legislation that, if ultimately you decide to use the funds in the state fiscal recovery act to invest in broadband and install new fiberoptic cable in the state that ultimately would be owned by private entities, I do think there is concern about how that would potentially conflict with ARPA,” said Heather O’Loughlin with the left-leaning Montana Budget and Policy Center.

Ellsworth could not be reached for comment in time for publication. The House Appropriations Committee is studying the issue in preparation for hearing the stimulus bill next week. From there, it will head to the House floor, to the Senate Finance and Claims Committee, to the full Senate and on to the Governor’s Office.

There’s plenty of time for amendments throughout that process, which will allow Democrats to bring their proposals on broadband and other issues, such as bolstered affordable housing funding and a plan to provide $2,000 stimulus checks to essential workers — though exactly who would be eligible and whether that particular idea will move through the process isn’t clear.