Broadband Infrastructure Utility-Leasing

Executive Summary 

According to the 2019 American Community Survey, 15% of Missourians do not have access to broadband internet. Filed in the 2022 Missouri Legislative Session, SB 848 and HB 2015 would establish the Electrical Corporation Broadband Authorization Act, allowing electrical corporations to provide broadband infrastructure services to a third-party for resale to an end-customer. Under current Missouri Statute (RsMO 386.020), electrical corporations do not include municipally-owned electric utilities and rural electric cooperatives. An electrical corporation would not be able to sell broadband internet services directly to an end-user under these bills. Additionally, investment in broadband infrastructure will be included in the calculation of an electrical corporation’s base rate. This utility-leasing model is a relatively new method to expand broadband deployment. 

Highlights 

• Surveys by West Monroe, a national consulting firm, find that internet service providers (ISPs) are interested in leasing fiber infrastructure from utility companies.

• Huntsville, AL saw large increases in internet speeds after the implementation of a fiber leasing model with its city owned utility.

• City Utilities in Springfield, MO and Ameren have sought to lease their fiber network in Missouri.

Limitations 

• Due to the recent implementation of the utility-leasing model, research investigating best practices and its impact on broadband availability and adoption are not yet available.

• The amount of unused fiber available for lease in Missouri is not currently publicly available.