By Scott Panitz
WNPA Olympia News Bureau

     OLYMPIA - Legislation that would allow public utility districts and rural port districts to provide telecommunications services directly to consumers is being met with opposition from lawmakers intent on leaving that service to private enterprise.
     House Bill 1711 would apply to counties currently not served or underserved by broadband telecommunications services.
     Rep. John McCoy, D-Tulalip, said the bill would provide an increasingly necessary service to those lacking it.
     “Everybody agrees we have underserved areas,” he said after a stakeholders’ meeting Feb. 3 in Olympia. “But we do not have Internet service providers willing to go out to those extreme rural areas to deliver service. So the question is: How do we get them served?”
     McCoy, the bill’s lead sponsor and chairman of the House Technology, Energy and Communications Committee in which the bill is being heard, said the answer is within his bill.
     It would give PUDs and rural port districts in counties with populations under 300,000 the ability to offer service to individual households.
     The Okanogan County Public Utility District now offers wholesale telecommunications through its fiber optics and wireless network. Several Internet service providers buy bandwidth from the utility and then market it to consumers.
     The utility is in the midst of a project to expand the service to most areas of the county. Funding comes from a federal grant-loan program and the utility.
     Ferry County has no broadband, though a line will be built along the state Highway 20 corridor to serve the area.
     Committee member Rep. Cathy Dahlquist, R-Enumclaw, subscribes to the Field of Dreams “If you build it, they will come” outlook when it comes to PUDs, saying districts investing in infrastructure would bring private companies.
     “They currently have, under law, wholesale authority and they haven’t used it,” she said of many utility districts in the state. “They don’t want to make that initial investment, because they’re worried (the providers) won’t come.
     “So I’m saying, fine, maybe we should mandate you having the wholesale, you do the build out and then have the small retailers come in.”
     Erik Poulsen, government relations director at Washington Public Utility District Association, said PUDs have used the wholesale authority they were granted in 2000, building 4,500 miles of fiber-optic cable, investing $300 million in infrastructure and joining with 150 retail providers. He said such wholesaling isn’t possible in certain parts of the state.
     “The idea was that PUDs would build critical infrastructure and private companies would come in and provide direct service,” Poulsen said. “This wholesale arrangement serves many of our PUDs well. Others believe they need expanded authority to overcome some of the barriers that still exist.”
     Okanogan County PUD commissioners have said the current wholesale marketing situation works well for the utility and they aren’t interested in getting into the retail telecommunications field.
     Dahlquist said she’s also concerned that PUDs, as government entities, would have an unfair competitive advantage over private companies since they can draw from taxpayer money to fund their retail operation.
     “I feel like by allowing retail authority, PUDs can go out to ratepayers and they can go to their port districts and tax their constituency,” the 31st District representative said. “For government to get into a retail business, we’re going to have government compete. We’re going to put people out of business.”
     “They’re saying they’re creating jobs,” Dahlquist said. “Quite the contrary.”
     Rep. Maureen Walsh, R-Walla Walla, also opposes the bill even though she is a co-sponsor. She said she signed on because a Franklin County PUD employee she trusts told her it would help provide access to her constituents.
     “She expressed to me that this was a great bill that would help rural communities get high-speed Internet access, at which point it sounded like a great idea,” said Walsh. “Ultimately, what happened is the original intention of the bill got a little bit skewed.”
     PUDs would end up “in competition somewhat with some of the private providers of Internet services,” Walsh said. “And I don’t like that.”
     The bill would have provisions to defend against such inequity, McCoy said.
     “In my opinion I’ve taken care of that,” he said. “Yes, the PUD can borrow from its (revenue-based services) but they have to pay it back, so there’s some rate of return that they have to crank in there. In order to get permission to do this, they have to hold public hearings with an extensive business plan that has to be approved by their ratepayers. They need to go through that process before they make a decision on whether they’re going to provide the service or not.”
-Chronicle Managing Editor Dee Camp contributed to this report.