Tennessee pole tax bills draw national attention on broadband taxes

Tennessee pole tax bills draw national attention on broadband taxes

Political action committees and concerned citizens of all stripes have come out against two bills in the Tennessee state legislature that would effectively increase taxes paid by utility companies and broadband providers for use of the poles in that state. Both anti-tax groups and broadband access groups are concerned that the bill could limit investment in broadband throughout the state.

Right now, the taxes Tennessee charges for use of poles by utility companies and broadband providers is already about two times the national average according to the Federal Communications Commission (FCC). The Commission has called for these taxes to be lowered in an effort to support broadband expansion, so bills like those going forward in Tennessee are drawing national attention. The national average rate is about $7 Tennessee charges $17.

Relatively unknown taxes and user fees like this often come up for increase during tight budget cycles. Since the 2008 crisis state governments have been relying on increases like this to make up for budget gaps as demand for government services continues to increase. However, this time, those bills are facing opposition from all sides of the political spectrum as groups focus on improving access.

Anti-tax activist Grover Norquist and his group Americans For Tax Reform issued a statement last week voicing their opposition to the bill and local broadband advocates are also against it, noting the potential threat to access. Tennessee has been a bright spot for broadband advocates who often point to the gigabit access in Chattanooga along with new elementary school laptop programs as national models.

Those projects have gone forward through public-private-partnerships and government subsidies from both federal and local governments but additional access taxes could have a chilling effect on future buildout. The bills, HB1111 and SB1222, are slated for further discussion in the state legislature this month. We will be following them – stay tuned for future updates.

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