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Cooperative calls on members to help with Senate Bill 406


Claiborne Electric’s General Manager & CEO Mark Brown issued an urgent call today for the help of the Co-op’s 17,000 members in contacting their area legislators concerning Senate Bill 406, which is scheduled to be heard on the House floor on Wednesday, May 27.

The bill, authored by Senator Beth Mizell, was originally an effort to grant legislative authority for electric cooperatives to provide broadband internet service. Electric cooperatives typically serve rural areas where options for true broadband internet service are nonexistent or severely lacking. About 150 electric cooperatives in dozens of states are now filling that void with fiber-to-the-home internet services. These co-ops are providing the fastest, most reliable internet available to areas that have largely been ignored by for-profit internet companies.

Almost immediately, SB 406 was targeted by large internet providers in the state and amendments were added to restrict the ability of electric co-ops to offer this service. The amendments have made the bill so restrictive that it almost completely eliminates the possibility of an electric cooperative offering internet service in a financially feasible manner.

Provisions in the current amendments include allowing cooperatives to only provide service to “unserved” areas of their service territory. There are several issues with this provision. This would not allow the electric cooperative to compete with other broadband providers in an area where service is available. Even if the co-op can offer better service at a more affordable rate with no data caps, they would not be allowed to provide customers that choice. This provision would mean that Claiborne Electric would not even be permitted to provide an internet option to most of the members they already provide electric service to. Also, the term “unserved” applies by census blocks, and if one single resident in that census block has available broadband service, the entire block is deemed “served.” Finally, many current providers will likely argue that broadband internet is available nearly everywhere, although customers reliant on satellite or cell-based service know the problems with cost, unreliable service, speeds which don’t line up with what is advertised, data caps, and speed throttling on “unlimited” plans.

Another provision that has been added to the bill would require electric cooperatives to allow large telecom companies to use the cooperative’s infrastructure – the physical materials that are owned by the co-op’s members – to deliver internet service using the cooperative’s poles and other physical plant. The co-op would be restricted to an extremely limited number of internet customers, but would be forced to allow the big for-profit companies to use co-op infrastructure in delivering internet service.

These amendments are anti-competitive, anti-free market provisions that will keep our local communities from having a choice for affordable, reliable, true broadband internet service. The amendments would make Louisiana the most restricted state in the nation where cooperative-provided broadband is concerned.

In discussing the bill with legislators across the state, misinformation has come to light about the origin of electric cooperatives. Many members of the Louisiana Senate and House of Representatives are being told that electric cooperatives are government-created, taxpayer funded organizations, and these provisions would only be fair. This is simply untrue. Electric Cooperatives are private electric utilities owned by the members they serve. These co-ops were not created by government. The government created a loan program to electrify rural America more than 80 years ago. The government offered that program to the investor-owned utilities, but they rejected the offer to serve these unprofitable areas. Farmers and ranchers then joined together to form rural electric cooperatives to meet their need for electrification in those areas. They signed up for the loans, built their infrastructure, and have re-paid those loans with interest. That program has never been a taxpayer burden.

The situation today is eerily similar. The for-profit internet service providers have ignored rural America. The cooperatives have once again stepped up to the challenge of providing this critical service to their members. For-profit companies that have ignored our market for decades are now coming forward to act as obstructionists with clearly anti-competitive amendments to a bill that promises to help bring broadband internet services to rural Louisiana.

Claiborne Electric appreciates Senator Mizell’s efforts, and agrees with her that broadband is essential to healthcare, business, and education. Electric cooperatives have always been committed to rural America. The bill, with its current amendments, will essentially eliminate any chance of cooperatives entering the internet business.

Please reach out to your area members of the Louisiana House of Representatives (https://house.louisiana.gov/H_Reps/H_Reps_ByParish) and ask them to support this bill only if electric cooperatives are allowed to offer this service across their entire membership. Customers deserve a choice in their internet service provider. Help us stop these anti-competitive, protectionist, for-profit companies from stifling progress in your communities.

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