Connect Kentucky has suffered a rare legislative setback, deciding not to go ahead with a bill that would have redirected tax receipts from the state treasury to telephone companies as a way of paying for the buildout of broadband.
As described earlier, Connect is coordinating efforts to pass a bill send as much as 35 percent of the telephone taxes consumer and business pay to the telephone companies instead of to the state. The money would be used to cover the costs of providing broadband to unserved areas. The amount of money telephone companies and others would be reimbursed would depend on the speed of service they provided. According to a draft bill being circulated in Frankfort in advance of the legislative session, there would be no cap on the amount of money that could be collected; the definitions of what expenses are covered are somewhat lax as is the definition of an unserved area.
However, the administration of new Gov. Steve Beshear (D) objected to the legislation, as the state is facing a budget shortfall. Rather than take a chance in the legislature, Connect decided not to proceed.
In a Jan. 30 email to those involved in discussions over the proposed bill, Connect Vp Andrew McNeill said: “Given the clear budgetary challenges facing the Commonwealth – ConnectKentucky has determined that the time is not right to pursue tax incentive legislation this session. We certainly believe that the policy that was nearing completion was something that could – in time – serve as a means of continuing to promote broadband investment in Kentucky’s most rural areas. However, with the budget shortfall, the time to put this discussion into the legislative arena is not this session.”
McNeill said Connect had not yet approached anyone to sponsor the bill. A number of parties opposed the bill, including the state’s municipal utilities and independent Internet Service Providers.