Home » Broadband Speed »Consumer News »Public Policy & Gov't »Rural Broadband » Currently Reading:

Alabama Passes New Broadband Accessibility Act, $20 Million in Tax Credits for Rural Expansion

Phillip Dampier April 2, 2018 Broadband Speed, Consumer News, Public Policy & Gov't, Rural Broadband No Comments

Gov. Ivey signs SB149.

Alabama Governor Kay Ivey last week signed into law SB149, the Alabama Broadband Accessibility Act, authorizing the creation of a broadband accessibility grant program to be administered by the Alabama Department of Economic and Community Affairs. The bill, sponsored by Senator Clay Scofield (R-District 9) and Representative Donnie Chesteen (R-District 87), also creates the Alabama Broadband Accessibility Fund.

According to a press release from the governor’s office, there are more than 842,000 people in Alabama without access to a wired connection capable of 25 Mbps download speeds. Over 1 million people in Alabama have access to only one wired provider and another 276,000 people don’t have any wired internet providers available where they live.

“The internet is vital to economic development, health, education, and to be honest, all areas of our modern life. This common sense legislation will help us attract new broadband to areas that need it most, especially in rural Alabama,” Governor Ivey said. “I congratulate Senator Scofield and Representative Chesteen for a job well done in seeing this bill through the legislature. It is just another step forward as we improve access to high-speed internet sooner rather than later.”

Sen. Scofield

Media reports claimed the new bill would help “thousands” of Alabama’s unconnected to get access to broadband service for the first time. A closer look at the legislation shows an effort to encourage private internet providers in the state to expand their networks in areas they currently consider unprofitable to serve.

At the heart of the new law is up to $20 million in state tax credits for providers willing to expand broadband:

  1. A state income tax credit equal to 10% of the new investment a provider spends to build or upgrade broadband service in a qualified unserved area.
  2. A 10-year exemption from sales tax for any qualified broadband network facilities that are built with new investment, starting the date those upgrades go live.
  3. A sales tax exemption applicable to the purchase of equipment needed for the upgrade.

Rep. Chesteen

There are annual caps on the credits, limiting the amount Alabama is willing to spend on the program:

  1. $750,000 limit per provider if the upgrade provides up to 10/1 Mbps service;
  2. $1,400,000 limit per provider if the upgrade delivers up to 25/3 Mbps service.
  3. $20 million annual cap on program – $18 million designated for rural projects, $2 million for areas that do not receive at least 10/1 Mbps service.

In contrast, New York State’s rural broadband expansion effort paid $209.7 million in the third round of its funding program alone to extend service to an additional 122,285 rural homes, businesses and community institutions. Fairpoint Communications (today doing business as Consolidated Communications) received $3.2 million — more than twice the maximum amount Alabama will pay any one provider — to extend service to just 407 homes in the Capital and mid-Hudson region of the state.

Alabama is also counting on the Trump Administration’s infrastructure improvement spending program that will enable applicants to finance a project by combining loans and grants to provide broadband to eligible rural and tribal areas. But almost all that money will be spent on private providers, and will cover only a small portion of their costs. For a broadband expansion program to be successful, providers will have to determine if the amount of tax credits and exemptions available will allow such projects to pass the critical Return On Investment (ROI) test companies use to decide where to offer service.







Search This Site:

Contributions:

Recent Comments:

  • Conan: Live long and invest, Tom Galisano....
  • John B.: What "competitor"? In my area AT&T is currently the only other ISP and they can only provide a blazing top speed 5Mbps down at my address. And if...
  • joe: Its about time ROCHESTER gets gigabit speeds! Buffalo, Auburn and Syracuse had Verizon Fios for a long time (in certain areas of the cities) but Roche...
  • Eric: I believe that I'm one of the people that fall into the 75K+ that will be receiving HughesNet as the solution to not having access to broadband. Gran...
  • FredH: ....and you know what? The worst part is they could give two sh*ts. "Don't like it? Go to our competitor. Oh yeah, there isn't one. Hahahahahaha"...
  • Joe: managers folks - forget this company. worst company of my 30 year career in the industry...
  • Joe: I worked for Frontier over 10 years. They have a Rochester clique that goes back to Rochester Telephone Company - Rochester Telephone Corporation was...
  • Phillip Dampier: I realize lots of people hate Spectrum (or Comcast, or whatever cable company services a particular area.) Historically however, most people will not ...
  • Phillip Dampier: It is very unlikely Greenlight would attach infrastructure to utility poles without a permit because it is an involved and integral part of network co...
  • Rob: I live in Webster. I have been on Greenlight’s sign up list, after paying my $10, for nearly 3 years now. Our neighborhood is at 94% of sign ups need...
  • Ar Be: Not surprised. Frontier Fios has totally ruined the view experience for those of us in Texas. Particularly those in the Dallas / Fort Worth area. Ho...
  • Steve: The article states that Greenlight May find competition tough since Spectrum will soon be offering faster internet offerings. The article ignores one ...

Your Account: