Washington State Bill to Extend Retail Authority for PUDs Draws Opposition
A Washington state bill designed to allow public utility districts and rural port districts in areas with underserved areas to offer retail broadband services faced strong opposition from lawmakers and some private providers. As a result, a revision that would include the FCC’s definition of unserved and underserved is expected before a committee vote next week, bill sponsor state Rep. John McCoy (D) told us.
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The bill would allow PUDs and rural port districts in counties with populations of less than 300,000 to offer retail service to consumers, said McCoy, chairman of the state House Technology, Energy and Communications Committee. Some service providers have complained that the bill would create unfair competition, McCoy acknowledged, but “I will continue to try to make this happen” with some revisions. The new proposal would limit the service areas to unserved and underserved areas using the FCC’s definition, he said. A committee vote is expected next week. Washington state currently allows home-rule cities to offer wholesale and/or retail services, but prohibits county PUDs from offering retail services. Currently, 14 PUDs and three rural port districts in the state provide wholesale services. Companies like Comcast testified against the legislation.
Before moving forward with the proposal, legislators need to define the problem, we were told by Rep. Cathy Dahlquist (R), who also is on the committee and opposes the bill. “Why are we rushing to extend retail authority” before we make sure there would be no private investment, she asked. She said there have been several private investments in infrastructure in the state. PUDs, as government entities, would have an unfair competitive advantage over private companies, she said.
The best scenario is when a local service provider partners with a public entity, said Craig Settles, a consultant on community broadband issues. Having a utility build out the infrastructure and a local operator offer service is a win-win, he said. The public-private partnership model is happening in states like New York, Maine, Wisconsin and Pennsylvania, he said. But the state already allows public-private partnership with the wholesale authority, Dahlquist said.
Washington’s PUDs generally serve the most sparsely populated areas in the state, said municipal attorney Jim Baller. Their territories typically include areas that don’t have enough potential end-user customers for private-sector providers to build broadband facilities. Nor are there enough for retailers to be successful if PUD’s built out those areas and operated them on a wholesale-only basis, he said. PUDs may, however, feasibly be able to provide service in these areas if they can deal with end-user customers directly and cut out all unnecessary costs and complexities, he said. “So, the real question for the Washington state legislature is whether it wants to foster service in these areas enough to give PUDs a realistic opportunity to provide it,” he said.