THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII
A BILL FOR AN ACT
relating to broadband service infrastructure.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that increased demand for broadband internet service has created greater disparities between remote and rural communities and densely populated areas of the State. It is becoming increasingly vital that access to broadband internet is a daily necessity.
The Federal Communications Commission's 2018 broadband deployment report showed improvements in nearly every area of advanced telecommunications services, but there are still significant gaps specific to rural and other low-density areas.
Across the United States, partnerships between government and private companies are developing new ways to bring high‑speed broadband networks to areas where the challenging terrain and low populations make deployment challenging. Public‑private partnerships are proving to be critical to closing the digital divide in unserved low‑density areas and for creating incentives for broadband providers to spend capital to build a new network in such areas.
The purpose of this Act is to establish the broadband service infrastructure grant program to award grants to applicants to extend deployment of facilities used to provide broadband service to unserved and underserved areas of the State.
SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
BROADBAND SERVICE INFRASTRUCTURE GRANT PROGRAM
§ -1 Definitions. As used in this chapter, unless the context requires otherwise:
"Broadband service" means a mass market retail service using any wireline or fixed wireless technology that provides the capability to transmit data from or to all or substantially all internet endpoints of at least twenty-five megabits per second downstream and three megabits per second upstream.
"Broadband service infrastructure" means the signal transmission facilities and associated network equipment proposed to be deployed in a project area used for the provision of broadband service to residential customers.
"Department" means the department of business, economic development, and tourism.
"Eligible applicant" means an entity that:
(1) Has authorization to do business in the State of Hawaii;
(2) Has demonstrated that it has the technical, financial, and managerial resources and experience to provide broadband service or other communications service to customers within the State; and
(3) Is not a government entity.
"FCC" means the Federal Communications Commission.
"Program" means the broadband service infrastructure grant program established by this chapter.
"Project" means a proposed deployment of broadband service infrastructure set forth in an application for grant funding authorized under this chapter.
"Project area" means a census block, aggregation of adjacent census blocks, or shapefile area within an unserved area or underserved area where the proposed broadband service infrastructure would be built as described in an application for grant funding authorized under this chapter.
"Shapefile" means a file format for storing, depicting, and analyzing geospatial data showing broadband coverage, comprised of several component files, such as a Main file (.shp), an Index file (.shx), and a dBASE table (.dbf).
"Underserved area" means a project area without access to broadband service with minimum speeds of at least fifty megabits per second downstream and five megabits per second upstream.
"Unserved area" means a project area without access to broadband service with minimum speeds of at least twenty-five megabits per second downstream and three megabits per second upstream.
§ -2 Establishment of the broadband service infrastructure grant program. There is established the broadband service infrastructure grant program to be placed in the department of business, economic development, and tourism for administrative purposes. The department shall receive and review grant applications and may award grants for eligible projects pursuant to the program.
§ -3 Eligible projects. (a) The department may award grants for eligible projects; provided that as of the date the application is filed, the project area to be served by the proposed deployment for which program support is sought shall be an unserved area or underserved area; provided further that no funds may be used to support any project involving the upgrade of an existing broadband plant by an eligible applicant, any affiliate, or partnering entity, nor may any funding be used to support non-capital expenses, including general operations of an eligible applicant, non-broadband services, marketing, or advertising.
(b) The project area to be served by a project funded through the program shall be described on a census block or shapefile basis.
§ -4 Eligible applicants. To become eligible for a grant, an applicant for a grant:
(1) May not receive funds under any other federal or state government grant or loan program for projects covered by an application;
(2) May not receive funds in any area that is already served by another provider of broadband service;
(3) Shall commit to paying a minimum of twenty per cent of the project costs out of the applicant's own funds and may not provide a minimum matching amount from any funds derived from federal or state government grants, loans, or subsidies; and
(4) May only be a non-governmental entity with demonstrated experience in providing broadband service or other communications service to residential customers within the State.
§ -5 Applications. (a) The department shall establish an annual window to commence an open process for submission of applications for funding under the program. The window for submission shall be no less than sixty and no more than ninety days.
(b) The form of the application shall be as prescribed by the department. The application shall provide the following information:
(1) Evidence demonstrating the eligible applicant's technical, financial, and managerial resources and experience to provide broadband service or other communications services to customers within the State and ability in building, operating, and managing broadband service networks serving residential customers in the State;
(2) A description of the project area, including a list of census blocks or shapefiles that the eligible applicant proposes to build or serve. If a census block or shapefile included in an application already is partially served by a provider of broadband service, the application shall describe the portions of the project area that are already served, the portions of the project area that constitute an unserved area or underserved area, and include a certification that none of the funds provided by the program for the project proposed in the application will be used to extend or deploy facilities to any already-served households;
(3) A description of the broadband service infrastructure that is proposed to be deployed, including facilities, equipment, and network capabilities, including minimum speed thresholds;
(4) Evidence, including certification from the application signatory, demonstrating the unserved or underserved nature of the project area;
(5) The number of households and businesses that would have new access to broadband service as a result of the grant;
(6) The total cost of the project and the timeframe in which it will be completed;
(7) The amount of matching funds the eligible applicant proposes to contribute and a certification that no portion of the funds is derived from any federal or state grant or loan program;
(8) Evidence demonstrating the economic and commercial feasibility of the project; and
(9) A preliminary list of all government authorizations, permits, and other approvals required in connection with the proposed deployment, and an estimated timetable for the acquisition of such approvals.
(c) The department shall treat any non-public information submitted by an eligible applicant as confidential and exempt from disclosure under the Uniform Information Practices Act upon any such eligible applicant's request for confidential treatment.
(d) Notwithstanding subsection (c), an eligible applicant shall ensure that the application contains sufficient public information to enable a provider submitting a written challenge authorized under section ‑6(b) to identify the specific geographic location of any proposed project area contained in such application.
§ -6 Review of applications; approval. (a) Within five business days following the last day of the window for submission of applications, the department shall make the applications available for review in a publicly available electronic file, subject to the confidentiality provisions set forth under section ‑5(c).
(b) A broadband service provider that provides service within or directly adjacent to a proposed project area may submit, within forty-five days of the release of the applications, a written challenge to the application. Such a challenge may include information:
(1) Disputing an eligible applicant's certification that a proposed project area is an unserved area or underserved area, or that no other federal or state programs provide funding for a proposed project for which program support is sought; or
(2) Attesting to the challenging provider's existing, or planned, provision of broadband service within the eligible applicant's proposed project area.
(c) In presenting information to document a claim in support of a challenge under subsection (b), evidence of broadband service infrastructure deployment in the proposed project area that includes FCC Form 477 deployment data or public shapefile data that encompasses the project area that a challenging provider has created for purposes of complying with FCC rules shall suffice to demonstrate that a project area subject to a challenge is served.
(d) Upon request, the department shall treat any non‑public information submitted by a challenging provider pursuant to this section as confidential and exempt from disclosure under the Uniform Information Practices Act.
(e) In reviewing applications, and any accompanying challenge, the department shall review the proposed project areas to ensure that all awarded funds are used to deploy broadband service infrastructure to unserved areas or underserved areas. The department shall not award any grants to fund deployment of broadband service infrastructure for any project area that fails to meet any of the criteria set forth in this chapter for being an unserved area or underserved area.
(f) The department shall award funding support for projects set forth in applications based upon a scoring system that shall be released to the public at least thirty days prior to the first day of the window for submission of applications. The weighting scheme employed by the department shall give the highest weight or priority to the specific criteria enumerated as follows:
(1) The size and scope of the unserved area or underserved area proposed to be served;
(2) The experience, technical ability, and financial wherewithal of the eligible applicant in successfully deploying and providing broadband service;
(3) Length of time the eligible applicant has been providing broadband services in the State;
(4) The extent to which government funding support is necessary to deploy broadband service infrastructure in an economically feasible manner in the proposed project area;
(5) The size and proportion of the matching funds proposed to be committed by the eligible applicant and the extent to which an eligible applicant's proposed contribution exceeds the minimum required under section ‑4(3);
(6) Whether the proposed project area is an unserved area, rather than an underserved area;
(7) The service speed thresholds proposed in the application and the scalability of the broadband service infrastructure proposed to be deployed to speeds higher than twenty-five megabits per second downstream and three megabits per second upstream;
(8) The eligible applicant's ability to leverage its own nearby or adjacent broadband service infrastructure to facilitate the proposed deployment and provision of service to households;
(9) The extent to which the project does not duplicate any existing broadband service infrastructure in the proposed project area; and
(10) Such other factors the department determines to be reasonable and appropriate, consistent with the purpose of facilitating the economic deployment of broadband service infrastructure to unserved areas and underserved areas.
(g) In awarding grants, the department shall not include consideration of any new or additional regulatory obligations beyond those required under applicable law, including but not limited to open access network requirements or any rate, service, or other obligations beyond the speed requirements required by this chapter. The department shall not consider factors that would constrain an awardee from offering or providing broadband service in the same manner as the service is offered without funding support by the provider in other areas of the State.
(h) The department shall set a reasonable timeframe to complete projects selected for funding approval. The department may, in consultation with any successful eligible applicant, set reasonable milestones for project completion along with procedures for addressing failures to meet such milestones without reasonable cause.
§ -7 Departmental authority. Nothing shall:
(1) Preclude the department from requiring disgorgement of grant funds in response to an eligible applicant's pattern of failure, following notice and an opportunity to cure and build out a project area in accordance with the timeframes and milestones set pursuant to this chapter;
(2) Be construed to preclude the department from considering an eligible applicant's financial ability to complete the project proposed in an application or making reasonable requests for information necessary for the oversight and administration of projects funded under this chapter; and
(3) Be deemed to empower the department to adopt any new rules or additional regulatory obligations, or to impose any new or additional regulatory requirements on funding recipients, through grant agreements or any other mechanism, other than the program implementation rules expressly authorized in this chapter.
§ -8 Rules. (a) Consistent with the provisions of Act , Session Laws of Hawaii 2020, the department shall adopt rules pursuant to chapter 91 to effectuate the purposes of this chapter.
(b) The rules:
(1) Shall include reasonable oversight and reporting provisions to ensure that project funds are used as intended;
(2) Shall not include third-party audit requirements, letter of credit, security fund, performance bond obligations, or any other financial commitment to secure performance other than those expressly specified in this chapter; and
(3) May not impose any financial penalty or liquidated damages provisions, or provisions that are not reasonably related to the deployment of broadband service infrastructure by an eligible applicant in accordance with this chapter."
SECTION 3. Within one hundred eighty days of the approval of this Act, the department of business, economic development, and tourism shall adopt rules pursuant to chapter 91 and section ‑8, Hawaii Revised Statutes, to implement the broadband service infrastructure grant program, including rules governing the submission, review, and approval of applications; the administration of projects funded; and grant agreements memorializing the award of funds.
SECTION 4. This Act shall take effect on July 1, 2020.
Broadband Service Infrastructure Grant Program; Unserved and Underserved Areas
Establishes the broadband service infrastructure grant program to award grants to applicants to extend deployment of facilities used to provide broadband service to unserved and underserved areas of the State.
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