NASHVILLE — Tennessee's rural electric cooperatives will be allowed to offer video to customers as well as broadband services under an amended version of Gov. Bill Haslam's Broadband Accessibility Act.
In response to concerns raised by proponents of broadband expansion, the governor added video offerings to the legislation as it moved through the House Business and Utilities Subcommittee on Tuesday.
"The administration and interested parties have made a good bill even better," Assistant Majority Leader David Hawk, R-Greeneville, who is carrying the governor's bill, told panel members.
While the bill's goal is make broadband internet accessible in the state's underserved areas, Hawk noted, "we also want broadband to be adopted."
Allowing the nonprofit electric co-ops to have cable-like television offerings is a way of doing that in rural Tennessee where 34 percent of residents don't have broadband access, the leader noted.
The offering of video is also widely viewed as a means of making offering high-speed broadband for businesses, health care offices and facilities and residential users financially viable. The legislation prohibits the elelectric co-ops from cross-subsidizing their broadband operations from power revenues and would be required to create stand-alone broadband operations.
Moreover, the state's 23 co-ops would only be able to offer video within their current service areas under the legislation.
David Callis, executive vice president and general manager for the Tennessee Electric Cooperative Association, said in a statement the bill is "an important step to expand access to high-speed internet in rural Tennessee."
"This legislation will not only help areas with the greatest need for high-speed internet, but it will also create jobs and improve access to education and healthcare," Callis said.
Haslam came forward with the legislation this year following a decade or more of political battles in the General Assembly as Chattanooga's Electric Power Board, which offers some of world's fastest broadband along with video, sought unsuccessfully to expand outside its operational footprint.
Other muni-electrics sided with EPB in the fight with for-profit telecomunications companies including AT&T and Comcast along with a number of smaller providers, who objected to government-owned entities competing with them.
EPB President and CEO David Wade said in a statement that "allowing electric coops to offer broadband is a good first step. Giving them the ability to provide video services further strengthens the proposed legislation, but coops also need the flexibility to subcontract with any provider.
"EPB and other municipal utilities have proven experience in delivering broadband services," Wade added. "We could help the electric coops serve more Tennesseans in less time. Unfortunately, the current legislation only allows municipals to play a limited supporting role."
Wade also said "every state restriction on who can provide broadband and how they can provide it means a longer wait for many Tennesseans who need broadband today."
The amended bill will be heard in the full House.