A Missouri legislative committee last week approved a bill that would limit the spread of municipal broadband networks, helping private Internet service providers such as AT&T avoid competition.

A few months before that vote, AT&T donated a total of $62,500 to political committees in Missouri. This included $20,000 to the House Republican Campaign Committee, $20,000 to the Missouri Democratic State Committee, $7,500 to the Missouri Republican Party, and $15,000 to the Missouri Senate Campaign Committee (apparently a Republican group). One of the donations is listed by the Missouri Ethics Commission as occurring just two weeks ago, but we’ve been told it was made in September 2015 and not deposited until this month because the original check was lost.

The donations were made before the legislature went into session; AT&T's policy is to not make contributions during legislative sessions. AT&T gave similar amounts in previous years.

CenturyLink, which also supports restrictions on municipal broadband, gave $6,000 to the Missouri Senate Campaign Committee in November 2015. CenturyLink opposed a municipal broadband network in Columbia, Missouri, in 2014.

AT&T wants a “level playing field”

The anti-municipal broadband bill, HB 2078, was introduced in January and approved with a 16-2 vote on February 18 by the Missouri House Utility Infrastructure committee. The bill was sent to the Select Committee on Utilities, the last step before a debate in front of the entire House, which is more than 70 percent Republican.

"We believe that if a governmental entity seeks to deploy or operate a GON [government operated network] in a market that can be served by the private sector, there should be safeguards in place to ensure a 'level playing field,' which is why we expressed support for HB 2078," AT&T told Ars.

AT&T has also donated smaller amounts to members of the Utility Infrastructure Committee, which is chaired by Republican Lyndall Fraker. AT&T told us that it gives donations to all members of that committee; records kept by the National Institute on Money in State Politics turns up AT&T donations to 17 of 19 members.

Fraker, who sponsored HB 2078, has received $3,450 from AT&T in his time as a lawmaker since 2011. He has also received $2,300 from CenturyLink and $1,500 from Comcast.

“I only sponsor bills that I believe in,” Fraker told Ars when asked if the donations had any impact on the municipal broadband bill.

CenturyLink and Comcast have also donated to a majority of the committee members. CenturyLink supports the municipal broadband bill, a company spokesperson told Ars. We’re still waiting to hear from Comcast.

AT&T’s opposition to municipal broadband is well-known. In Tennessee, Sen. Todd Gardenhire (R-Chattanooga) recently called AT&T “the most powerful lobbying organization in this state by far” and a “villain” in the state’s municipal broadband battles.

AT&T also just sued the local government in Louisville and Jefferson County, Kentucky, to stop a new ordinance designed to give Google Fiber access to utility poles.

How Missouri wants to restrict muni broadband

Missouri already has a law from 1997 that says municipalities may not sell telecommunications services to the public with the exception of “Internet-type services.” This made it difficult to build a financially sound Internet service because it couldn’t be bundled with other telecom products like telephone calling, municipal broadband advocate Christopher Mitchell told Ars. Mitchell is director of the Community Broadband Networks project for the Institute for Local Self-Reliance.

The “Internet-type services” carveout allowed North Kansas City, Missouri, to build a municipal broadband network. The new bill would mostly close the “Internet-type services” exception going forward, but it would allow existing networks to continue and allow new ones to be built under some circumstances.

City or town Internet services would have to be approved by a majority of voters in the municipality unless certain conditions are met. No vote has to be held if fewer than 50 percent of residents have access to Internet service or if the municipal network will cost less than $1 million over five years.

Before a vote could be held, municipal leaders would be required to complete a financial study on the proposed network.

“The only limit this bill puts on the local governments is asking the citizens to vote on investments of over one million dollars,” Fraker told Ars. “Many feel government shouldn't compete with private companies unless the people of that government entity have good reason to.”

Ballot requirements often kill municipal broadband projects, according to attorney James Baller of the Baller Herbst Law Group. That group has been fighting attempts to restrict municipal broadband for years.

“While municipalities sometimes prevail in such referenda, they are time-consuming and burdensome, making public communications initiatives much more cumbersome than private initiatives,” Baller wrote in an FCC filing in 2014. “Moreover, in most cases, the incumbent communications providers vastly outspend municipalities and dominate the local news through their control of the local cable system.”

The exceptions in the Missouri bill are difficult if not impossible to meet, Mitchell said.

“I've called these a ‘leprechaun riding on a unicorn bill,’ which is to say, ‘you can do this action if you can bring a leprechaun riding on a unicorn,’ kind of like the whole knights who say Ni who force you to chop down a tree with a herring,” Mitchell said.

The exception for communities where fewer than 50 percent of residents have Internet access is “kind of fascinating,” he said. “It's kind of like, if the private sector is serving 80 percent of the town, the last 20 percent can just suck it.”

Restrictions like the ones proposed in Missouri can also prevent public/private partnerships, Mitchell said. “We saw this with Google when it was trying to figure out which cities it wanted to work with; it tended to stay away from states that had a lot of complication tied into them.”

FCC court case could wipe out state laws

The new Missouri bill is similar to one that was introduced a year ago but did not pass.

About 20 states have laws limiting municipal telecommunications services, but one court case could lead to some of the laws being wiped out. The Federal Communications Commission voted a year ago to preempt state laws in North Carolina and Tennessee. The states sued, but if a federal appeals court rules in the FCC’s favor, cities and towns in other states could petition the FCC to preempt similar laws.