Tennessee Could Give Taxpayers America's Fastest Internet For Free, But It Will Give Comcast and AT&T $45 Million Instead

Chattanooga, Tennessee has the fastest, most affordable internet in the United States. Many of the rural areas surrounding it have dial up, satellite, or no internet at all. Chattanooga wants to expand its network so these rural areas can have the same Gbps and 10 Gpbs connections the city has. Rather than allow that to happen, Tennessee's legislature just voted to give Comcast and AT&T a $45 million taxpayer handout.

The situation is slightly convoluted and thoroughly infuriating. EPB—a power and communications company owned by the Chattanooga government—offers 100 Mbps, 1 Gbps, and 10 Gpbs internet connections. A Tennessee law that was lobbied for by the telecom industry makes it illegal for EPB to expand out into surrounding areas, which are unserved or underserved by current broadband providers. For the last several years, EPB has been fighting to repeal that state law, and even petitioned the Federal Communications Commission to try to get the law overturned.

This year, the Tennessee state legislature was finally considering a bill that would have let EPB expand its coverage (without providing it any special tax breaks or grants; EPB is profitable and doesn't rely on taxpayer money). Rather than pass that bill, Tennessee has just passed the "Broadband Accessibility Act of 2017," which gives private telecom companies—in this case, probably AT&T and Comcast—$45 million of taxpayer money over the next three years to build internet infrastructure to rural areas.

To be clear: EPB wanted to build out its gigabit fiber network to many of these same communities using money it has on hand or private loans at no cost to taxpayers. It would then charge individual residents for internet service. Instead, Tennessee taxpayers will give $45 million in tax breaks and grants to giant companies just to get basic infrastructure built. They will then get the opportunity to pay these companies more money for worse internet than they would have gotten under EPB's proposal.

"Tennessee taxpayers may subsidize AT&T to build DSL service to Chattanooga's neighbors rather than letting [EPB] expand its fiber to neighbors at no cost to taxpayers," Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance said. "Tennessee will literally be paying AT&T to provide a service 1000 times slower than what Chattanooga could provide without subsidies."

When I was reporting a story about EPB's network last year, Republican state Sen. Janice Bowling—who has been pushing to remove restrictions on EPB—told me that Tennessee's state legislature has repeatedly bent over backwards for large ISPs.

"What we have right now is not the free market, it's regulations protecting giant corporations, which is the exact definition of crony capitalism," she said.