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Alabama Rural Broadband Act on governor’s desk

A bill that would provide grants to aid rural broadband expansion is on Gov. Kay Ivey’s desk.

The legislation was delivered to the Capitol on Wednesday afternoon after the Senate adopted changes to the Alabama Rural Broadband Act previously made in the House.

Originally conceived as a bill that would offer tax incentives to companies to provide high-speed internet services to some of the state’s more remote areas, the bill was changed to offer grants instead. Projects that would provide speeds of 25 megabits per second down and 3 megabits per second up would be eligible for $1.4 million per project, while projects providing minimum speeds of 10/1 could get $750,000 each.

The bill is expected to provide $10 million annually, with the program being administered by the Alabama Department of Economic and Community Affairs. Private providers and cooperatives would be eligible for the money, but government entities would not.

The sponsor, Sen. Clay Scofield (R-Guntersville), wanted to give providers tax credits for providing broadband rather than cash. The bill still has safeguards in place – the money won’t be received upfront and a legislative committee would monitor the program for effectiveness.

Scofield couldn’t be reached for comment this week.

Ivey is expected to sign the bill after speaking about the need for such programs in her January State of the State speech. The legislation sailed through the Alabama Legislature, receiving unanimous yes votes in the House on Tuesday and in the Senate concurrence vote on Wednesday.

Speaker of the House Mac McCutcheon (R-Monrovia), said grants are better for taxpayers.

“It’s more transparent and gives us more accountability,” he said.

In reality, both funding mechanisms have been dismissed by critics. The MacIver Institute said in a 2014 report that incentives can actually hurt economic growth, while Obama’s stimulus grant program was one of the more stark examples of grant largesse.

Alabama lawmakers hope their broadband plan goes hand-in-hand with a proposal from President Trump to spend an immediate $200 billion and long-term $1.5 trillion on infrastructure improvements. Trump hopes to spur more public-private partnerships – so-called P3s – with his proposal to help state and local governments shoulder more of the load. But his plan has faced criticism on both sides – Democrats aren’t fans of the president’s goal to put more costs on the states, while many Republicans say the plan calls for too much spending and haven’t exactly deemed it a high priority this session.

Some on both sides have criticized the lack of any guaranteed funds for broadband, although the plan cites high-speed internet as an infrastructure priority. There are concerns that federal broadband grants could accelerate the growth of government internet projects, which have largely been a sinkhole for taxpayer money.