Oregon’s Effort to Bring Fast Internet to “Digital Dust Bowls” Has Hit a Roadblock

Rural telecom providers hit the roof. How hard will the governor push back?

Alex Petit's first gambit to fix Oregon's woeful internet service worked.

On his second try, he awoke a slumbering yeti.

Petit is Oregon's chief information officer—essentially the state's top IT guy. Last year, alarmed at state government's "ridiculous" $11 million internet bill, he teamed up with the state's research universities to buy nearly 2,300 miles of fiber optic cable, hoping to create a faster, substantially cheaper public network running across the state.

Two weeks ago, Petit doubled down, asking lawmakers for permission to open that network to rural schools, public libraries and tribal reservations, and create public-private partnerships to increase connectivity.

"The more of us that use it, the more efficient for all of us," says Petit.

But when he tried to extend his reach, in amendments to a pending bill in the Oregon House, rural telecom providers hit the roof.

Petit's proposal has touched off a legislative donnybrook, pitting the state's hope to roll out its new broadband network against the telecommunications industry's desire to keep its markets fenced off from a government-funded internet provider.

The disagreement raises important questions about how deeply government should insert itself into an arena—broadband—dominated by private providers.

It will also test of how hard Gov. Kate Brown is willing to push back against a telecom industry that has traditionally supported her, in order to fulfill a pledge to help revive rural Oregon.

"This is not only about better, cheaper service for us," Petit says. "I feel strongly it's about digital equity."

The industry disagrees. Michael Weidman, president of LS Networks, which is owned by five Oregon electric co-ops and the Coquille Tribe, says Petit is correct that the state could pay far less for internet service. But Weidman says it's unfair for the state to undercut industry.

"It just doesn't make sense to use public dollars to compete with private investment," he says.

In Portland, where a WiFi hot spot is rarely more than a block away, this debate may seem arcane. But internet connectivity in rural Oregon is dismal—and how Oregon addresses that imbalance could have big ramifications in a state where the gap between haves and have-nots is widening.

A nonprofit group called Education Superhighway, which uses federal funds to hook up rural schools to the internet, gave Oregon poor scores in its 2017 State of the States Report. The state ranks 45th in connectivity, 42nd in fiber needed and 41st in affordability.

"The most persistent barrier to digital equity is the lack of fiber optic connection to the Internet," says Andrew Kenny, state engagement director for Education Superhighway. "Without that, kids are going to get left behind."

In amendments Petit offered to House Bill 4023, which relates to rural connectivity, he proposed to use the state and university system's new network to connect rural Oregon, where 43 school districts still lack a fiber optic connection.

Brown jumped on board. Before the session began, she had pledged to make development in rural Oregon a priority but wasn't making much headway.

The governor's spokesman, Chris Pair, says cheaper, faster internet service for rural areas is a must. "Increasing broadband for rural communities," he says, "is one way to encourage economic equity across Oregon."

Two groups disagree. One consists of so-called "middle mile" suppliers such as LS Networks, which connect internet hardware to "last mile" providers. They worry the new state network would compete directly with them.

Last-mile providers also object to the proposal. They supply the off-ramps that connect fiber optic networks to office buildings, schools and homes, and they fear another part of Petit's request: that the state be allowed to form public-private partnerships that could build such off-ramps.

The Oregon Telecommunications Association says Petit's proposal threatens its members, including a couple dozen small telecom companies such as Frontier Communications, which serves Eastern Oregon, and Molalla Communications, which serves rural Clackamas County.

Petit says the focus should be on outcomes, such as providing better service to the 95,134 Oregon students who the Education Superhighway study says lack access to bandwidth that meets minimum requirements.

But Brant Wolf, a lobbyist for the OTA, says he's skeptical about those numbers and claims rural Oregon is not so underserved as Petit and others suggest.

"It's easy for a witness in a hearing to say a school or county or city doesn't have access," Wolf says. "Those claims are often demonstrably false. Almost everywhere in Oregon, you can get service if you ask for it."

Wolf says there are other reasons to be wary of the desire for a new, publicly owned network. He says government-led technology projects often fail or produce unintended results.

He says mission creep is a risk and cites a recent example: Clackamas County built a sophisticated broadband network in 2010 with federal stimulus dollars and promised never to compete with industry providers for business or residential customers. Late last year, though, county officials sought permission to do just that.

Pushback from industry representatives, including Weidman and Wolf, stopped Petit's bill after three sessions before the House Economic Development and Trade Committee.

But with Brown's backing, House Speaker Tina Kotek (D-Portland) then moved the bill to the Joint Committee on Information Management and Technology, where it awaits a hearing.

Brown's spokesman says the governor is optimistic about its chances.

"The governor is encouraged by the support she's seeing from rural communities and rural lawmakers," Pair says, "and she hopes that this Legislature can support rural economies."

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