Democrats Balk at Governor’s Bill for More High-Speed Internet

May 6, 2015

Governor Branstad’s broadband bill, which passed the House earlier this session by a wide margin, received a cool welcome Tuesday at its first hearing in the Democratically controlled Senate.    

This is the second year the governor has asked for incentives for telecommunications companies to expand broadband.   Democrats question whether tax breaks would result in more Iowans with high-speed internet.     

Telecommunications lobbyists crowded a committee room in the Iowa Senate, where Des Moines Democrat Janet Peterson was in charge.

“Please come up to the table and we’ll hear from you one by one,” Peterson says.

The industry and the governor’s office are keen on the bill to give property tax breaks to companies which build out broadband.    But just like with past efforts, the bill is leaving some doubt that the incentives would actually work.   

The governor’s spokesman Jake Ketzner has high hopes for the bill.

“We’re very pleased with the bill that passed the House 90 to five,” Ketzner says.  “We would like to see it go through the Senate as is.”

But Democrats pushed back hard, questioning how realistic the bill is. 

David Duncan is with the Iowa Communications Alliance that represents over one hundred broadband providers.   He says some 27,000 Iowa households lack high-speed internet.   Des Moines Democrat Matt MCoy pushes him to admit what a big problem that is.

 “You're saying it's going  to be a big challenge.   It’s going to take a lot of money and time to reach them all,” McCoy says.

 “Your  words not mine,” Duncan replies.   “But yes it’s not easy or cheap. The households that are unserved are the most expensive to serve.  That’s why they haven’t been hooked up yet.”  

Duncan says a tax incentive would help.    Senator Peterson questions that.

“Where do we show that the tax incentive is actually going to benefit a farm or school or rural area?” Peterson asks.  

 “I think it’s an indirect benefit,”    replies Victoria Daniels with the Iowa Department of Revenue. 

Senator McCoy wonders if companies would cherry-pick areas that are not the neediest.

“I don't know with this current proposal how that could be completely avoided,” McCoy says.  “But I think it would provide full employment for some attorneys in the state.”

“I concur,” Daniels replies.

The Branstad administration’s chief information officer Bob Von Wolffradt agrees the tax breaks should be monitored.

 “I think there's a big accountability push to make sure we’re not throwing money around willy-nilly,” Wolffradt says.  

Senator Randy Feenstra, a Republican from Hull, says rural Iowa needs help.

“ We’re talking about a mile here, a mile there,” Feenstra says. “I’m talking  about western Iowa farms and small manufacturing places.   These are places that can’t be connected where  a property tax incentive might dramatically help.”

Senator Peterson essentially rules out giving the governor a clean up or down vote on the House bill.

“Asking us to move it through the Senate chambers without any amendments is probably not going to happen,” Peterson says.  

Peterson dismissed the panel with no action on the bill.

“I guess I'm interested to see is this really going to help us connect Iowans,” Peterson says.  “I want to spend some more time with it.” 

Meanwhile, backers say even the 27,000 unserved households are just a start.  They say there are tens of thousands more so-called underserved households with too-slow internet.