The state of Texas partially prohibits the sale of broadband services by municipalities and other local governments as of 2021.
However, the regulations have been amended and outright circumvented at times, most noteably through the offering of internet service by electic co-ops — making the legal status of municipal broadband more than a little confusing in Texas.
Texas Utilities Code, § 54.201 Breakdown
From the Texas Utilities Code 1:
§ 54.201. CERTIFICATION PROHIBITED. The commission may not grant to a municipality a: (1) certificate of convenience and necessity; (2) certificate of operating authority; or (3) service provider certificate of operating authority. Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
- Texas Utilities Code § 54.201 currently prohibits municipalities from establishing broadband services to their residents.
- This law was originally enacted in September 1997, when municipal broadband as a concept was just beginning to take shape. Prior to this year, the market was, for all intents and purposes, entirely unregulated.
2016 Circumvention of State Law
In 2016, the city of Mont Belvieu was able to successfully build out and deploy a fiber-based internet network, despite the prohibition. It was able to do so thanks to a local district court decision that ruled broadband services did not fall under the state law’s classification of “telecommunications” services.
In essence, the city’s legal counsel was able to argue that the planned service was a “non-voice data transmission service,” which did not overlap with the state’s definition, which includes “local exchange telephone service, basic telecommunications service, or switched access service.”
Today, this effort has culminated in MB Link – a local municipal fiber provider that offers residents symmetrical gigabit internet service for $75 per month. MB Link is one of only 8 municipal providers in Texas, and is currently the only of its kind in operation. Despite this, the City of Mont Belvieu has welcomed the opportunity to share their strategy with any others in Texas that wish to establish a true municipal broadband service for residents.
2019 Electric Cooperative Bill
In the 2019 legislative session, Gov. Greg Abbott signed bill SB 14 into law, allowing electric cooperatives in Texas to establish broadband services in areas where they currently serve residents for electrical services. The bill marked the first major change to the status quo in over two decades, and almost immediately resulted in several such networks being established.
Today, the majority of municipal broadband networks in Texas are electric cooperatives – 5 of the 8 in total.
Frequently Asked Questions
Is municipal broadband legal in Texas?
Texas state law currently prohibits municipal broadband in most forms. However, a 2019 law made it possible for electric cooperatives to establish broadband services within the areas that they operate.
How many municipal broadband providers operate in texas?
As of January 2021, there are 8 municipal broadband providers in operation in Texas. 6 of them provide broadband services to residential customers, and all but one of ther residential municipal broadband providers in Texas are electric cooperatives.