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[Senate Report 110-330]
[From the U.S. Government Publishing Office]

110th Congress 
 2d Session                      SENATE                          Report
                                                                110-330
_______________________________________________________________________

                                     

                                                       Calendar No. 707

                    COMMUNITY BROADBAND ACT OF 2007

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 1853

                                     

                 April 22, 2008.--Ordered to be printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred tenth congress
                             second session

                   DANIEL K. INOUYE, Hawaii, Chairman
                   TED STEVENS, Alaska, Vice-Chairman
JOHN D. ROCKEFELLER IV, West         JOHN McCAIN, Arizona
    Virginia                         KAY BAILEY HUTCHISON, Texas
JOHN F. KERRY, Massachusetts         OLYMPIA J. SNOWE, Maine
BYRON L. DORGAN, North Dakota        GORDON H. SMITH, Oregon
BARBARA BOXER, California            JOHN ENSIGN, Nevada
BILL NELSON, Florida                 JOHN E. SUNUNU, New Hampshire
MARIA CANTWELL, Washington           JIM DeMINT, South Carolina
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
MARK PRYOR, Arkansas                 JOHN THUNE, South Dakota
THOMAS CARPER, Delaware              ROGER F. WICKER, Mississippi
CLAIRE McCASKILL, Missouri
AMY KLOBUCHAR, Minnesota
          Margaret Cummisky, Staff Director and Chief Counsel
         Lila Helms, Deputy Staff Director and Policy Director
       Jean Toal Eisen, Senior Advisor and Deputy Policy Director
     Christine Kurth, Republican Staff Director and General Counsel
                Paul J. Nagle, Republican Chief Counsel
             Mimi Braniff, Republican Deputy Chief Counsel

                                                       Calendar No. 707
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-330

======================================================================

 
                    COMMUNITY BROADBAND ACT OF 2007

                                _______
                                

                 April 22, 2008.--Ordered to be printed

                                _______
                                

       Mr. Inouye, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 1853]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 1853) to promote competition, 
to preserve the ability of local governments to provide 
broadband capability and services, and for other purposes, 
having considered the same, reports favorably thereon with 
amendments, and recommends that the bill (as amended) do pass.

                          PURPOSE OF THE BILL

  The purpose of S. 1853 is to promote universal and affordable 
access to broadband by preserving the ability of municipal 
governments to provide advanced telecommunications capability 
and services.

                          BACKGROUND AND NEEDS

  Widespread broadband deployment can promote economic 
development, enhance public safety, and increase educational 
opportunities for millions of Americans. As a result, 
communities across the country are eager to bring the economic 
and social benefits of broadband infrastructure to their 
citizens. Within the past several years, hundreds of cities 
have launched community broadband initiatives, either with 
private partners or on their own. These efforts have an 
historical analogue from the last century: When the private 
sector fell short of providing electric services in some areas 
of the country, community leaders stepped forward to form their 
own municipal electric utilities.
  In some areas of the country, however, community broadband 
efforts have been blocked or stymied by State or local laws 
restricting the ability of municipalities to provide 
telecommunications or telecommunications services. In practice, 
these laws can leave some rural and remote communities without 
broadband service. Other municipalities may find their 
broadband service limited to already available commercial 
options, which may fall short of community need. Many of these 
laws followed in the wake of the Supreme Court decision in 
Nixon v. Missouri Municipal League, holding that the 
Telecommunications Act of 1996 did not preempt a specific State 
statute prohibiting political subdivisions from providing 
telecommunications. 451 U.S. 125 (2004).
  The Community Broadband Act of 2007 will support efforts of 
cities and towns across the country to ensure faster, more 
affordable broadband service for their citizens. The bill would 
prohibit State or local regulations or requirements that 
prevent a municipality from offering advanced 
telecommunications capability or services to any person, or 
public or private entity. The bill, however, would prevent a 
municipality from using its regulatory authority to 
discriminate against competing private providers. In addition, 
the bill would require a municipality offering high-speed 
Internet services to comply with Federal and State 
telecommunications laws and regulations that apply to all such 
providers.

                         SUMMARY OF PROVISIONS

  S. 1853, the Community Broadband Act of 2007, would promote 
broadband service by preserving the ability of municipalities 
to provide advanced telecommunications capability and services.
  The bill would bar State and local governments from adopting 
new legal measures or enforcing existing legal measures that 
would prohibit or have the effect of prohibiting municipal 
governments from providing broadband services. At the same 
time, the bill would encourage the development and use of 
public-private partnerships to further the deployment of these 
services. The bill also would set forth notice requirements to 
ensure that the public has adequate information to evaluate 
prospective public broadband deployments and that the private 
sector has an opportunity to put forward alternative 
approaches. Finally, the bill would ensure that public 
providers of broadband services are treated on an equal footing 
with respect to ordinances, rules, and policies that apply to 
private providers of broadband services.

                          LEGISLATIVE HISTORY

  In the 109th Congress, H.R. 5252, the Communications 
Opportunity, Promotion, and Enhancement Act of 2006, included 
Title V, a section to establish the framework under which local 
governments may offer broadband capability or services to the 
public. The bill (as amended) was reported favorably by the 
Commerce Committee by a vote of 15-7.
  On July 23, 2007, Senator Lautenberg, for himself and 
Senators Inouye, Kerry, McCain, McCaskill, Smith, Snowe, and 
Stevens, introduced S. 1853, a bill to preserve the ability of 
local governments to provide broadband capability and services.
  On October 30, 2007, the Committee held an executive session 
at which S. 1853 was considered. The Committee adopted two 
amendments proposed by Senator Ensign. The first would preclude 
the use of Federal funds to assist a public provider in the 
event of bankruptcy or termination of a project. The second 
would provide private sector entities with the opportunity to 
bid to provide advanced telecommunications services. The bill, 
as amended, was approved by voice vote.

                            ESTIMATED COSTS

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

S. 1853--Community Broadband Act of 2007

    S. 1853 would likely preempt state and local laws in 15 
states that would ban, or have the effect of banning, the 
provision of broadband services by public entities, including 
municipalities. Before public entities may provide broadband 
service, the bill would require them to publish notice of their 
intent to offer such services, including detail of the types of 
services to be provided. The bill also would require public 
entities to allow private bids for those services. CBO 
estimates that enacting S. 1853 would have no significant 
impact on the federal budget, but it would impose mandates on 
state and local governments.
    The preemption, as well as the notification and bidding 
requirements, would be intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that 
the costs of those mandates would be small and would not exceed 
the threshold established in UMRA ($66 million in 2007, 
adjusted annually for inflation). The bill would benefit public 
entities in some states by allowing them to offer broadband 
services. The bill contains no new private-sector mandates as 
defined in UMRA.
    The CBO staff contacts for this estimate are Susan Willie 
(for federal costs) and Elizabeth Cove (for the impact on state 
and local governments). The estimate was approved by Theresa 
Gullo, Deputy Assistant Director for Budget Analysis.

                      REGULATORY IMPACT STATEMENT

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

  S. 1853 would expand the availability of broadband access. 
The number of persons covered by this legislation should be 
consistent with current levels of individuals affected.

                            ECONOMIC IMPACT

  S. 1853 would increase the affordability of broadband service 
for consumers and commercial use.

                                PRIVACY

  S. 1853 is not expected to have an adverse effect on the 
personal privacy of any individuals that will be impacted by 
this legislation.

                               PAPERWORK

  S. 1853 has minimal or no impact on current paperwork levels.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

  Section 1 would establish the short title of the Act as 
``Community Broadband Act of 2007''.

Section 2. Local government provision of advanced telecommunications 
        capability and services

  Section 2 would bar State or local governments from 
prohibiting any public provider from providing advanced 
telecommunications capability or services using advanced 
telecommunications capability to any person or any public or 
private entity.

Section 3. Safeguards

  Subsection (a) would prohibit any public providers from 
biasing themselves over competing providers with respect to 
ordinances, rules, and policies, including those relating to 
access to public rights-of-way, permitting, performance 
bonding, and reporting.
  Subsection (b) would provide that the bill does not exempt 
any public providers from any Federal communications law or 
regulation that applies to all providers of advanced 
telecommunications capability or services.

Section 4. Public-private partnerships encouraged

  Section 4 would encourage each public provider that intends 
to provide advanced telecommunications capability or services 
to consider the potential benefits of a public-private 
partnership prior to doing so.

Section 5. Public input and private sector opportunity to bid

  Subsection (a) would require that before a public provider 
may provide advanced telecommunications capability or services, 
either directly or through a public-private partnership, a 
public provider must publish notice of its intention to do so; 
generally describe the capability or services to be provided 
and proposed coverage area; identify any special capabilities 
or services to be provided in low-income areas or other 
demographically or geographically defined areas; provide local 
citizens and private-sector entities with an opportunity to be 
heard on the costs and benefits of the project and potential 
alternatives to the project; and provide private-sector 
entities with an opportunity to bid to provide such capability 
or services.
  Subsection (b) would make clear that subsection (a) does not 
apply to contracts or arrangements under which a public 
provider is providing advanced telecommunications capability or 
services as of the date of enactment. Subsection (b) also would 
make clear that subsection (a) does not apply to proposals that 
as of the date of enactment are in the request-for-proposals 
process, are in the process of being built, or have been 
approved by referendum.

Section 6. Exemptions

  Section 6 would make clear that the requirements of sections 
3 and 5 do not apply when a public provider provides advanced 
telecommunications capabilities or services other than to the 
public. Section 6 also would make clear that the requirements 
of sections 3 and 5 do not apply during an emergency declared 
by the President, Governor of the State, or any other elected 
local official authorized by law to declare a state of 
emergency where the public provider is located.

Section 7. Use of Federal funds

  Section 7 would prohibit the use of Federal funds by public 
providers if any project providing advanced telecommunications 
capability or services fails due to bankruptcy or is terminated 
by a public provider.

Section 8. Definitions

  Section 8 would define ``advanced telecommunications 
capability'' consistent with its meaning in the 
Telecommunications Act of 1996 and ``public provider'' as a 
State or political subdivision thereof, or an Indian tribe, or 
any agency or entity affiliated with a State, political 
subdivision, or Indian tribe.

                        CHANGES IN EXISTING LAW

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, the Committee states that the bill as 
reported would make no change to existing law.

                                  
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