Missouri is an agricultural state, with farms covering two-thirds of the state’s total land acreage, supporting an $88 billion industry. The state’s large rural areas lack access to high-speed broadband. According to the FCC’s 2019 Broadband Deployment Progress Report, over half of Missouri residents in rural areas of the state lack access to broadband at speeds of 25 Mbps down and 3 Mbps up. The state ranks 42nd in the nation for broadband connectivity, with over a million residents lacking any access to high-speed internet.
Missouri’s sweeping agriculture zones and low-density communities have been largely ignored by private telecom companies, and fixed wireless is the only broadband option for many of the residents in these areas. Due to lack of access to broadband, the FCC awarded $254.7 million to Missouri telecom providers during the 2018 Connect America Fund auction — more than any other state.
Municipal and county governments are barred by state law from offering broadband service, leaving residents with few options in the state’s more rural areas. Still, electric cooperatives that provide electricity to many of the rural communities have stepped up and taken the initiative in providing high-speed broadband to their co-op members.
WHY is municipal broadband so restricted in Missouri?
Missouri state law bars municipalities from selling or leasing broadband services to residents. It also bars municipal governments from leasing broadband infrastructure to other communications providers.
Electric utilities in the state have been able to overcome this law in order to provide broadband service to co-op members in underserved or unserved areas of the state. In fact, recognizing the dire lack of access to broadband across much of the state, the Missouri General Assembly amended the state laws to encourage rural electric co-ops to establish broadband networks for serving residents high-speed internet. But many of these utility-led fiber broadband networks are limited to rural areas surrounding towns and cities in the state where residents were previously unserved by private telecom companies.
The telecom lobby continues to play a role in Missouri’s municipal broadband laws. The state law barring municipalities from providing broadband was enacted in 1997, just one year after Congress passed the Telecommunications Act of 1996 (see below). The passage of the state law has been credited in part to the lobbying efforts of Southwestern Bell (later renamed SBC), an incumbent ISP in Missouri. Southwestern Bell was also party in a suit against a group of municipalities in the state that wanted to provide broadband service.
In 2017, Republican state senator Ed Emery introduced a telecom-backed bill that would further limit local governments’ ability to provide retail and wholesale broadband networks. The bill ultimately died in committee, but telecom-backed efforts against municipal broadband haven’t slowed.
An incumbent ISP was recently tied to an astroturf campaign against a municipal-led fiber project in South central Missouri. The town of West Plains offered gigabit connections to a handful of businesses and residents as part of a pilot project. The project spurred incumbent Fidelity Communications to upgrade its service in the area to include a gigabit offering. But Fidelity also launched an astroturf campaign against the project using an out-of-state marketing firm. The campaign claimed to be led by a group of fiscally-conservative Missouri residents who were against taxpayer dollars going towards “high risk endeavors” that compete directly with private enterprise. But Fidelity was linked to the StopCityFundedInternet.com Website and related social media accounts by a local citizen, according to a report from the Institute of Local Self Reliance.
History of municipal broadband laws in Missouri
Missouri has been a battleground for municipal broadband since the 1990s, in light of the federal Telecommunications Act of 1996. The Act states that no state or local statute or regulation may “prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.”
After Congress passed the law, telecom companies across the country began lobbying state legislatures to pass legislation to prevent municipal governments from offering broadband service to residents. In 1997, Missouri’s General Assembly passed HB 620, which barred any political subdivision, including towns and counties, from offering broadband service to residents.
The Missouri Municipal League, representing local governments across the state, opposed the new law and asked the FCC to preempt the law, on the basis that it contradicted the federal communications law. In 2001, the FCC released its decision, opting not to preempt the state law, arguing that the term “any entity” did not include political entities such as local governments.
The FCC’s order states that “the term ‘any entity’ in section 253(a) of the Act was not intended to include political subdivisions of the state, but rather appears to prohibit restrictions on market entry that apply to independent entities subject to state regulation.” It also added that “municipal entry into telecommunications could raise issues regarding taxpayer protection from economic risks of entry, as well as questions concerning possible regulatory bias when a municipality acts as both a regulator and a competitor.”
The Municipal League filed a petition for review with the 8th Circuit Court of Appeals in 2001. The court found the term “any entity” to include municipalities. It vacated the FCC’s order and remanded the case to the FCC.
In 2003, the U.S. Supreme Court reviewed the case and the lower court’s ruling. The following year, the Supreme Court reversed the 8th Circuit Court decision, finding that the term “any entity” did not apply to political subdivisions, and therefore determining that the FCC could not preempt the Missouri state law that prohibits municipalities from providing broadband service.
Office of Broadband Development and the Rural Broadband Fund
Governor Mark Parsons has made promoting broadband access a key tenet of his administration since taking office in 2018. In a 2019 address, the Governor outlined plans for the state to begin providing funding “to cover the gaps in delivering broadband,” and his budget called for $5 million in funds to be allocated to the Rural Broadband Development Fund.
The Governor also established the Broadband Development Office in 2018, charged with helping rural communities receive access to broadband. The office has released the Missouri Broadband Plan, which outlines five goals for the office in closing the state’s digital divide:
Accelerate broadband infrastructure and access: includes launching the State of Missouri broadband grant program; identifying rural areas in need of enhanced broadband infrastructure; and assembling best practices of broadband deployment policies and agreements.
Increase broadband adoption and awareness: includes developing a broadband communications plan; and supporting regional campaigns aimed at increasing adoption and utilization of broadband among businesses, agricultural producers, and community institutions.
Leverage partnerships to accelerate broadband efforts: includes establishing a broadband advisory team to include public and private stakeholders; implementing a regional broadband planning framework and establish a ‘broadband ready’ designation for counties; and promoting broadband planning toolkit for communities and survey templates for communities, counties, and regions to utilize for broadband planning processes.
Increase broadband data collection and utilization: includes creating Missouri broadband coverage and adoption maps; identifying new uses for broadband in the state’s agricultural sector; and documenting broadband needs of rural students and heal facilities.
Promote efficiencies and opportunities in broadband development: includes facilitating efforts to streamline access and partnerships within state and federal assets; developing a dig-once policy for state, county, and municipal entities; monitoring and promoting federal broadband funding programs; and researching and recommending alternative funding and broadband implementation tools.
The office hopes to achieve universal access to broadband speeds of at least 100 Mbps download and 20 Mbps up for all Missouri citizens by 2028. Its roadmap includes reaching 95 percent of all households and businesses with access to 25 Mbps service by 2025, and achieve a broadband adoption rate of 97 percent across the state by 2027.
While these efforts are laudable, the state still prevents any and all political subdivisions from offering broadband to residents. That leaves many residents in towns and cities without competitive broadband options, while new broadband initiatives must rely on public-private partnerships.
Municipal broadband success stories
Electric utility-led fiber broadband initiatives are flourishing in rural parts of the state. Here’s a look at some of the utilities that are currently providing high speed broadband to residents.
PEMISCOT-DUNKLIN ELECTRIC COOPERATIVE
The Pemiscot-Dunklin Electric Cooperative (PDEC) began exploring options for offering broadband service in the Southeastern “Bootheel” portion of the state in 2014. After conducting a feasibility study on fiber-to-the-home (FTTH) for three counties, PDEC began building out its FTTH service in 2017.
The co-op recently completed phase one of its buildout in Dunklin County. PDEC will extend the network to Pemiscot county and parts of New Madrid county. In all, the project will see 1,200 miles of fiber being laid.
To make its offering more attractive to residents, PDEC is offering cable TV and voice services in addition to broadband. The utility has partnered with neighboring co-ops Co-Mo Electric Cooperative and SEMO Electric Cooperative in order to resell existing video services to PDEC customers.
PDEC estimates the project will cost about $30 million. It received a $750,000 grant to go towards the project from the Delta Regional Authority (DRA), an economic development organization covering parts of Missouri and other states. The utility expects to pass a total of 7,500 homes, farms and businesses, and is aiming for a 37 percent uptake rate. While the utility does not provide electric service within some of the towns of the area, PDEC is exploring overbuilding in several towns in order to compete directly with telecom companies. PDEC is also considering expanding its fiber network to neighboring communities outside its electric footprint.
CO-MO ELECTRIC COOPERATIVE
Co-Mo Electric launched broadband service within its footprint in 2010 under a for-profit subsidiary named Co-Mo Connect. Co-Mo deployed a FTTH network across most of its service area and is currently offering gigabit broadband, voice and video to thousands of customers in areas including Stover, Russellville, Tipton, California, Windsor Place and Versailles across its footprint. It was one of the first entities to offer gigabit speeds to customers.
In 2018, the FCC award the utility $21 million, to be dispersed over 10 years, under the Connect America Fund II (CAF II). The money will go towards Co-Mo’s FTTH initiative that’ll see its fiber network extend to new communities.
UNITED ELECTRIC COOPERATIVE
Maryville-based co-op United Electric (UEC) began building out its fiber network in 2011. The utility, which has one of the lowest density footprints in Missouri, has built out 1,500 miles of fiber to serve over 7,000 customers with high-speed broadband and wireless service in Northwest Missouri. UEC received funds as part of the American Recovery and Reinvestment Act (ARRA) of 2009 and a U.S. Department of Agriculture grant to bring high-speed internet to residents in 10 counties in the state.
To date, UEC’s United Services and its broadband bran United Fiber has invested over $50 million in deploying 1,800 miles of fiber. It has 9,200 broadband subscribers. It offers gigabit service for $99 per month.
In 2018, UEC subsidiary United Services received $20 million from the FCC under CAF II to expand its fiber network in parts of Northwest Missouri over the next 10 years. The funding will be used to deploy FTTH services in areas that currently lack access to broadband service options offering 10 Mbps. Under CAF II, construction on the project must be completed within six years, beginning in 2019.
SEMO ELECTRIC COOPERATIVE
Southeast Missouri (SEMO) Electric decided to begin offering broadband service to customers in 2017. The utility began phase one of its five-phase plan to lay fiber throughout its footprint in Southeast Missouri in 2018, delivering broadband to residents in Scott county and in the towns of Miner, Bloomfield and Advance. When the project is completed, SEMO will offer broadband service across Bollinger, Cape Girardeau, Mississippi, New Madrid, Scott and Stoddard counties, and reaching more than 3,000 residents.
SEMO has received $250,000 from DRA for the project. It has also raised $8 million from other investors, and has allocated $40 million of its own funds to the initiative.
SEMO Electric’s broadband subsidiary, GoSEMO, currently offers two tiers of broadband service: a gigabit connection for $80 per month, and 100 Mbps for $50 per month. The utility plans to begin offering voice and video at a later date.
CALLAWAY ELECTRIC COOPERATIVE
Callaway Electric, which services central Missouri, first began offering broadband services under the brand Callabyte to customers in some areas of its footprint in 2015. The FTTH pilot project offered service near Fulton, Missouri. Callaway Electric then expanded the network the following year, and has been steadily building out its fiber footprint ever since. It received $2.17 million from the FCC during the 2019 CAF auction.
Callaway partnered with telephone utility Kingdom Telephone Company’s subsidiary Kingdom Technology Solutions on the project, which operates as a profit-sharing partnership between the two organizations. Kingdom handles customer connections and relations, while Callaway is handling infrastructure buildout.
Callabyte offers gigabit connections at $95 per month.
BARRY ELECTRIC COOPERATIVE
Barry Electric began exploring broadband options in 2010, in response to pressure from the community to offer high-speed internet in an area where telco companies refused to deploy networks. The utility received $610,000 from the FCC under the 2019 CAF II auction.
The co-op devised a five-year fiber network plan to lay 1,100 miles of fiber by 2020, in order to offer every co-op member access to broadband. Cassville was the first area to receive service in 2016. Barry Electric is offering symmetrical tiers of speed, with 250 Mbps offered at $49 per month and gigabit service priced at $99 per month.
RALLS COUNTY ELECTRIC COOPERATIVE
Ralls Electric began building a fiber network to offer broadband to its electricity customers in Northeastern Missouri in 2010 under the subsidiary Ralls Technologies. The utility received $19 million in funds for the project under the ARRA. It built out a fiber network in unserved rural portions of its footprint.
Ralls Electric launched another pilot fiber project in 2016 in New London to offer gigabit speed broadband, voice and video to New London’s 1,000 residents. It has since expanded that network to the neighboring town of Perry, Missouri.
SHO-ME POWER ELECTRIC COOPERATIVE
Sho-Me Power began offering fixed wireless broadband to residents in Houston, Missouri (located in Texas County, no less) in 2017. The fixed wireless solution utilizes an existing fiber network used to connect the County Administrator Center from an earlier project.
The town of West Plains, home to just 12,000 residents, began a FTTH pilot for residents and businesses in 2017. The town initially deployed a fiber ring around the town to connect city-owned buildings. In 2015, the city council formed a 22-person Broadband Study Group tasked with polling local residents and businesses on broadband access. The committee concluded there was sufficient interest to support a FTTH initiative, and that the community would benefit from the town creating an Internet utility. The town has since begun its FTTH pilot, but hasn’t released any timeline as to the project’s expansion. It’s unclear if the offering would survive a legal challenge under Missouri state law.
WHAT YOU CAN DO TO MOVE THE NEEDLE IN MISSOURI
Residents in the state of Missouri who are interested in exploring municipal broadband services should contact their local, state elected officials to voice their support for such initiatives. Here are some ways citizens can advocate for municipal broadband in their communities.
• Launch a grassroots campaign for municipal broadband: Community members that band together to raise awareness about municipal broadband have historically been very effective in launching municipal broadband initiatives. Grassroots-led campaigns that highlight the economic opportunities that high speed broadband access can deliver to struggling communities tend to be attractive causes for local politicians to join.
• Voice support for municipal broadband to city councilors and county commissioners. Local elected officials are always interested to hear from constituents on issues facing the community, and broadband access has become a critical service for any economy in the 21st century. Communicate with local officials about community struggles around lack of high-speed broadband access.
• Call state elected officials: Missouri General Assembly members write state laws, so it’s important that constituents reach out to state representatives to register their interest in repealing or amending the state statute that prohibit municipalities from offering broadband service.
Kendra Chamberlain is a freelance journalist covering telecommunications, IoT and smart infrastructure. Based in Baton Rouge, Louisiana, she has covered telecommunications for over six years as a journalist and analyst. She wrote this story for BroadbandNow.com, which released it to The Salem News and Phelps County Focus.