Alabama Code § 11-50B-1 et seq
Alabama state laws allow municipal governments to provide broadband services to residents, but they impose a suite of restrictions and conditions that make it decidedly difficult for municipalities to do so. The statutes require municipal governments to conduct a referendum before providing services to residents.
Municipalities are barred from using local funds or local taxes to cover the initial investments required in building out broadband infrastructure. The laws require any municipal broadband system to be self-sustaining, limiting local authority to bundle services like voice and data, which is a common industry practice; and finally the law bars municipalities from providing broadband services to residents beyond their jurisdiction. City officials of Opelika, Alabama, have struggled to maintain the city’s municipal broadband network under these conditions. Opelika’s public utility, Opelika Power Services, began building out its municipal broadband network in 2010, despite aggressive campaigns launched by telecom firms against the initiative. The OPS ONE network was completed by 2014, serving residents within the city limits of Opelika.
After three attempts to change the state law to expand the network to nearby Auburn failed, the city announced in 2018 it would sell its municipally-owned OPS ONE broadband network to a Georgia-based telecom company Point Broadband in a $14 million deal. Under the deal, Point Broadband is sharing revenue earned from the network with the city government.
Recognizing the lack of broadband in rural areas, the Alabama legislature has hoped to bring more private ISPs to the state using taxpayer-funded grants administered through the Alabama Department of Economic and Community Affairs (ADECA). In 2019, Gov. Kay Ivey signed SB90, a bipartisan bill that expanded the definition of “minimum service threshold” in the Alabama Broadband Accessibility Act to mean 25 Mbps downstream and 3 Mbps upstream, and tweaked the definition of “unserved” to include areas that lack broadband service at the new minimum service threshold throughout the area.
The bill also increased the taxpayer’s share of the costs of broadband projects through the grant program from 20% to 50%. So far, most of the grant awardees have been smaller local and regional telecom firms and cooperatives. But two major ISPs, Charter Communications and Mediacom, challenged at least 14 of the applications for the 2019 round of funding.
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