Members urged to encourage veto of SB 406

On May 25, Claiborne Electric’s General Manager & CEO Mark Brown issued an urgent call for Co-op members to contact their area legislators concerning Senate Bill 406.

The bill was originally an effort to grant legislative authority for electric cooperatives to provide broadband internet service. Almost immediately, however, SB 406 was targeted by large telecom companies, and amendments were added to restrict cooperatives so severely that it would be nearly impossible for an electric cooperative to offer internet service in a financially feasible manner.

Although Claiborne Electric’s members stepped up immediately and answered Brown’s call with an outpouring of messages to state legislators, the bill ultimately passed (34-0) with the restrictive amendments included.

“This is a disheartening result,” Brown said. “We had such high hopes for this bill, but the amendments put into place drastically changed the original intent of the bill. What started out as a great thing for our rural friends and neighbors turned into a bill that does more harm than good to the Co-op and its members.”

Electric cooperatives typically serve rural areas where options for true broadband internet service are nonexistent or severely lacking. More than three years ago, Claiborne Electric began the process of trying to join about 150 electric cooperatives across the country filling the rural broadband void with fiber-to-the-home internet projects. These co-ops are providing the fastest, most reliable internet available with no data caps, all at extremely competitive rates. The geographic areas where electric cooperatives are building these projects have largely been ignored by for-profit internet companies.

The current internet situation is eerily similar to electricity in the 1930s. At that time, for-profit electric companies refused to build lines to rural areas because they weren’t profitable, so farmers and ranchers created electric cooperatives to bring electricity to the countryside. To date, the large for-profit internet service providers have ignored rural America, and cooperatives have once again stepped up to provide a critical service to their members. With the amendments added to SB 406, these companies acted to obstruct genuine efforts to bring broadband internet services to rural Louisiana.

The bill, as passed, will severely limit the number of internet customers for electric cooperatives. It prohibits them from offering internet service to a significant portion of their electric members. The bill will eliminate competition and customer choice, even if the co-op could offer better service at a more affordable rate with no data caps. This bill’s amendments also require electric cooperatives to allow large telecom companies to use the cooperative’s infrastructure (physical materials owned by the co-op’s members) to deliver internet service using the cooperative’s poles and other physical plant.

If signed into law, SB 406 makes Louisiana the most restricted state in the nation where cooperative-provided broadband is concerned. This bill is anti-competitive, anti-free market, and will essentially eliminate any chance of cooperatives providing affordable, reliable, true broadband internet service to rural Louisiana.

Although the bill is a set-back for electric cooperatives wanting to provide this critical service, Brown said he still has hope for the future of cooperatives and rural broadband.

“This bill has essentially derailed our efforts to bring a Fiber-to-the-Home solution to our members,” Brown said. “However, we want our members to know we are still fighting this outcome. We hope to convince the governor to veto the bill in its present form.”

Brown said he believes SB 406 bill may violate certain state and federal laws related to the restraint of trade by preventing the Cooperative from delivering the service to all its members. He said it also likely violates the provisions of the Federal Telecommunications Act of 1996 – a bill that was designed to enhance competition for telecommunications services across the nation.


Please follow this link to show your support in encouraging Governor Edwards to veto this bill:


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