State Legislature Expands Municipal Authority to Provide Broadband, but to What Extent?

Expanding the availability of broadband in the state was a priority for the legislature this past spring; so much so that it passed two bills on the topic in the 2021 session. Although the bills both broadened the authority of municipalities to provide retail telecommunication service, some parts of the bills are in conflict with each other. For example, ESHB 1336 authorizes public utility districts (PUDs) and port districts to provide broadband at wholesale and retail within district boundaries and, in some cases, by agreement with other government entities outside district boundaries. On the other hand, 2SSB 5383 is more restrictive and authorizes the provision of retail broadband to end users only in unserved areas.

Both bills were submitted to Governor Inslee for signature. As noted in RCW 1.12.025(1), when the legislature enacts two or more acts amending the same section of state law, “each act shall be given effect to the extent that the amendments do not conflict in purpose…” However, if there is a conflict, the act last filed with the secretary of state controls. RCW 44.20.020 requires the Washington Secretary of State to number bills in the order in which they became law.

Then Governor Inslee did something unprecedented. He signed both bills at the same time with one pen in each hand. Doing so raised the question: how should the conflicts between the bills be resolved if you don’t know the order in which each bill became law?

As noted by the Association of Washington Cities (AWC), the secretary of state sought judicial guidance and determined that the acts should be filed in the order in which they passed the legislature. ESHB 1336 passed one day after 2SSB 5383, so the conflicts between the two are resolved in favor of ESHB 1336.

Understanding the Need for Legislation

As background, it is helpful to understand why clarification of municipal authority to provide broadband is a welcome development. Municipal entities with broad “home rule” powers, such as first-class cities, code cities, and charter counties, have broad authority in all matters of local concern. Under Washington case law, such as In General Obligation Bonds of City of Edmonds, 162 Wn. App. 513, 256 P.3d 1242 (2011), these entities have authority to provide fiber optic and broadband services within their boundaries.

On the other hand, non-charter counties, second-class cities, and towns only have those powers granted expressly or implicitly by the legislature. And special purpose districts are, by definition, entities authorized to provide a limited range of services under state law. The bills enacted in the last session clarify and expand the authority of these types of municipal entities to provide broadband. For more on municipal powers in general, please see MRSC’s webpages on City and Town Classification (comparison of powers section), County Forms of Government, and Special Purpose Districts in Washington.

Summary of Legislative Changes

ESHB 1336 and 2SSB 5383 both amend two separate sections of the RCWS: RCW 53.08.370 relating to ports and RCW 54.16.330 relating to PUDs. ESHB 1336 (Sections 2 and 10) amends those statutes to grant broad authority to provide wholesale and retail telecommunications services. On the other hand, 2SSB 5383 (Sections 2 and 3) authorize the provision of retail telecommunications only in “unserved areas” and impose additional requirements on ports and PUDs providing such service.

Both bills take effect on July 25, 2021. It remains to be seen how the state code reviser will address the conflicts between the ESHB 1336 and 2SSB 5383, so ports and PUD’s that are considering providing retail broadband will want to monitor that closely. Since ESHB 1336 was adopted later in time by the legislature, presumably its broad grant of authority will override the restrictions set forth in 2SSB 5383, but, as they say, the devil is in the details.

There are also provisions in each bill that do not conflict with the other. Here is a summary of those changes:

• Port districts and PUDs are required to report certain feasibility and planning information about the proposed telecommunications service area to their governing bodies and the state broadband office prior to providing service (In ESHB 1336, Section 3 addresses PUDs and Section 10 addresses ports);
• Counties, second-class cities, and towns are granted broad authority to provide or contract for telecommunications services to their inhabitants. Prior to doing so, they must report feasibility and planning information to their governing bodies and the state broadband office (In ESSB 1336, Section 5 addresses towns; Section 6, second-class cities; and Section 7, counties);
• By the end of 2022, the state broadband office must report to the governor and legislature on the provision of retail telecommunications services by PUDs and ports in unserved areas (2SSB 5383, Section 4).
• The governor vetoed Section 12 of ESSB 1336, which would have amended RCW 43.155.070 to allow agencies to receive state public works funds even if they are not in compliance with the Growth Management Act (GMA).

Conclusion

Confusion over the unorthodox way these bills were signed into law should not distract from the fact that cities, counties, PUDs, and port districts now have broad authority to extend broadband into unserved areas. AWC has posted additional information on various available grant opportunities for broadband.