Legislature debates who should oversee up to $400 million in Nebraska broadband funds

LINCOLN, Neb. (Nebraska Examiner) — Decades of legislative frustration with Nebraska’s results after spending billions of dollars in fees and funds since the late 1990s to boost broadband access boiled over into a floor debate Thursday about possible fixes for a state agency’s funding decisions and follow-through.

Senators are weighing who at the state level should direct up to $400 million in new federal grant funds set aside for broadband expansion: the elected members of the Nebraska Public Service Commission, which manages the program now, or a person appointed by the governor to head a new office under the governor’s direction. 

Before reaching a vote, lawmakers expect a few more hours of filibuster-forced discussion Friday about Legislative Bill 683, which proposes removing the Public Service Commission’s authority to award the $100 million to $400 million for broadband build-out in underserved areas of the state.

The bill from the Transportation and Telecommunications Committee would grant that power in state statute to a new gubernatorial appointee leading a new state broadband office. 

New broadband office or PSC

Gov. Jim Pillen created a new state broadband office using an executive order in January, during his first week in office. He said at the time that “affordable, accessible, dependable and high-speed broadband is essential” to educating and keeping young people in Nebraska.

His spokesman told the Nebraska Examiner on Thursday that Pillen wants the new broadband office codified, saying the nimbler new structure would be “more accountable to Nebraska voters and able to expand and improve broadband access across the state more quickly.”

State senators who raised questions about the bill, including Steve Erdman of Bayard, Steve Halloran of Hastings and Megan Hunt and Machaela Cavanaugh, both of Omaha, asked why the state would create a new office and structure rather than adding staff to the Public Service Commission.

Halloran suggested saving money by naming a broadband director and leaving the office under the authority of the commission. Erdman said senators shouldn’t hold the current Public Service Commission responsible for past problems because the board has three new members and a new majority.

“That might be a better alternative,” Halloran said. “The goal would be the same. The results would be the same. But it would be under the Public Service Commission.”

Years of frustration

Much of lawmakers’ frustration is based on inconsistent access to broadband in rural Nebraska and in older urban neighborhoods where it costs more to install the infrastructure needed. As many as 90,000 locations in Nebraska still lack quality broadband, based on testimony to the committee about LB 863.

The bill would authorize $1.7 million a year on the new broadband office. It would transfer three employees from the Public Service Commission, hire six more and add the director. The office would be housed at, but not controlled by, the Nebraska Department of Transportation.

The bill would leave the Public Service Commission in control of several smaller grant programs aimed at broadband that are already in progress, as well as work with Universal Service Fund dollars. The commission awards about $40 million to $50 million in broadband grants a year.

Cavanaugh and Hunt said the Legislature should consider whether it is handing over too much power to the executive branch, including the Legislature’s authority to approve new spending. Under a proposed committee amendment, the state broadband director would decide funding.

Some in the Legislature, including State Sen. George Dungan of Lincoln and John Cavanaugh of Omaha, who are attorneys, worried that a provision in the State Constitution giving authority over “common carriers” to the commission might make LB 683 unconstitutional.

State must act quickly

Bill supporters, including State Sens. Suzanne Geist of Lincoln, Mike Moser of Columbus, Myron Dorn of Adams and Bruce Bostelman of Brainard, said the Legislature needs a new state broadband office to ensure that Nebraska obtains the funds it needs to build out the system.

Geist, in a brief interview, said the key reason to put the office under the governor’s direction instead of the Public Service Commission is because the commission, as the state’s catch-all regulator, is involved in too many things to give broadband deployment the focus it needs.

“They’re spread so broadly,” Geist said of the commission. “They regulate so many things. This is so big and with very specific deadlines. If the deadlines aren’t met, we don’t get the money. Adding this on top of that was more than the governor thought they could adequately do.”  

Holding companies accountable

Defenders of the commission, including former Commissioner Crystal Rhoades, disagreed. She said the commission could do what the Legislature wants if senators would give the PSC the tools to hold telecommunications companies accountable for awarded broadband projects.

She would like to see a law that requires companies applying for state or federal broadband funds to disclose where they built the project, the speed at which it was built and the cost per mile. The state also needs to require independent speed testing, she said.

The Public Service Commission testified in a neutral position at the hearing for LB 683, but most of the testimony its members gave was skeptical of the need for the change.

“(Senators supporting LB 683) just want to create this new department that they think is going to be a panacea,” Rhoades said. “What they need to do is empower the expertise they already have to make sure that the public is getting what they paid for.”

Bostelman and State Sen. Wendy DeBoer of Bennington said Nebraska needs better mapping of broadband deployment, citing a bill passed last session to require it. But Bostelman expressed frustration that the map might be based on federal data and not local data from the PSC.

Rhoades said the Legislature could fix this by requiring telecommunications companies to report their progress publicly. She also suggested requiring the companies to disclose how they are providing broadband, because there’s a difference between fiber and Wi-Fi.

“Wi-Fi lasts three to five years and needs to be replaced,” she said. “Fiber gives you 20 years.”

Odd allies, late swing in support

Erdman, who spent much of the hearing questioning the bill, decided late in the day that he would support it. He worried about telling his constituents the state would be “growing government.” But he said supporters answered his questions about why the state needed to make the change.

Dorn put it succinctly: “I think most people agree we need some type of person to do this or help spur along the Public Service Commission. It seems we haven’t nearly progressed at the rate we should, or at the rate other states have.”

Hunt and Cavanaugh joked about siding with Halloran and Erdman about “wasteful spending.” Hunt said she worried that the new office would be “duplicative or redundant.” Cavanaugh said senators should think carefully before taking such “drastic” action.

Cavanaugh, the only committee member to speak in opposition to the bill, said she wanted to know more about the intentions behind the new broadband office. She said she might support a separate broadband office if it left room for legislative and public input. 

Her fellow committee members said the bill would require the broadband office to file a report with the Legislature each December detailing progress toward the five-year plan required with the federal funds.

Bostelman said 35 states already have some sort of broadband governance structure and said the new office would take the issue off the back burner and give someone more clearly accountable to the masses – the governor – a way to direct the money where it needs to be used.

Rhoades said she doesn’t think the change would accomplish what senators want.  

“We’ve been passing out the money thinking they would do the right thing, and they are not,” she said. “This new structure will be rife with the same exact problems.” 

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