Tennessee Gov. Bill Haslam (R) proposed $45 million in broadband grants and tax credits, and to allow nonprofit electric cooperatives to provide retail broadband service. The proposed budget and Tennessee Broadband Accessibility Act also would make grant funding available to libraries, the state government said in a Thursday news release. The $45 million would be distributed over three years and include $30 million for broadband providers to reach unserved homes and businesses, plus $15 million to buy broadband equipment in the state’s most economically challenged counties, the state government said in a fact sheet. The proposal doesn’t address Tennessee’s ban on municipal broadband expansion, which was upheld last year by the 6th Circuit U.S. Court of Appeals. Tennessee Senate Leader Mark Norris (R) will introduce the bill in his chamber, and House Leader Glen Casada (R) and Rep. David Hawk (R) will sponsor it in theirs, a spokeswoman for the governor said. “While there is no one solution that can guarantee broadband accessibility to every single Tennessean, this legislation provides a reasonable, responsible path to improve access in a meaningful way through investment, deregulation and education,” Haslam said. It’s progress, but could be better, said Institute for Local Self-Reliance Community Broadband Networks Director Christopher Mitchell. Tennessee had been violating the Telecom Act by creating barriers to cooperatives building fiber networks, he said. But Haslam “refuses to upset Comcast and AT&T by allowing the state's best networks (like Chattanooga) to expand to serve its neighbors,” Mitchell emailed us. “It is a cowardly move forward but better than a cowardly move backwards.” Tennessee is one state community broadband advocates are watching this year for state legislative action, our Friday report found (see 1701260022).

Pennsylvania Public Utility Commissioners raised jobs and competition concerns Thursday before voting 5-0 to approve Verizon/XO Communications without conditions. The order is the last regulatory OK the deal needed, and a Verizon spokesman said the company aims to close the purchase of XO “in the coming days.” While voting to allow the deal, Commissioner David Sweet said he worried about not including a condition to protect jobs of Pennsylvania employees after New York and New Jersey required Verizon to keep the jobs for four years (see 1701240051). “I fear that that places a bull's-eye on the backs of Pennsylvania employees since we are neighbors of New York and New Jersey, and we apparently are not going to impose the similar condition that I would have liked to have seen us done,” Sweet said. Commissioner John Coleman said he was sympathetic to Sweet’s employment concern, but didn’t want to “handcuff” the companies: “There is a higher goal here, and that is to preserve the company itself.” Chairwoman Gladys Brown said she would have supported conditions on business data services: “Adding Pennsylvania-specific conditions regarding its Internet Protocol interconnection agreements, DS1 and DS3 loop circuits and the current federal requirement to provide the functional equivalent of DS1 and DS3 loops whenever copper network facilities are retired could have gone a long way in strengthening the commission’s finding of affirmative public benefits.”

Ohio Gov. John Kasich (R) received five nominations to fill two vacant commissioner seats at the Public Utilities Commission, the PUC said in a Thursday news release. For an unexpired term ending April 10, 2020, the PUC nominating council Thursday submitted the names of Daniel Conway, an energy and telecom attorney from Porter Wright; Lawrence Friedeman, an IGS Energy executive; Edward Hess, a former PUC staffer with energy experience; and Raymond Lawton, ex-director of the National Regulatory Research Institute, research arm of NARUC. For the second seat that has a five-year term starting April 11, the council recommended Gregory Williams, former aide to Ohio ex-Commissioner Andre Porter, along with the three who don’t get the first seat. Kasich chose Howard Petricoff in June for the first slot, but after the state Senate appeared unlikely to confirm him, Petricoff announced his resignation Dec. 2 (see 1612120029). Under Ohio process, the governor has 30 days to appoint names from the list or request more names. The state Senate must confirm the governor’s appointees, who may take seats before receiving confirmation.

Verizon/XO Communications may get a last-needed regulatory green light today. Pennsylvania Public Utility Commissioners plan to vote on the $1.8 billion deal at their Thursday meeting, said an agenda posted Wednesday. In November, an administrative law judge there issued an initial decision to OK the deal without conditions. Tuesday, New York Public Service Commissioners approved the deal with a condition to protect the jobs of existing XO employees (see 1701240051). The New York PSC released the text of that order Wednesday. The FCC and FTC gave the OK last year.

Saying VoIP is an information service under federal law, Comcast sought oral argument on a Vermont Public Service Board-proposed decision defining it as a telecom service. PSB staff recommended the finding last month in a proposed decision in docket 7316 (see 1612130060). In Jan. 20 comments we obtained Wednesday, Comcast urged the board to reject the proposal because it makes factual findings that are irrelevant or unsupported by the record and includes legal analysis that disregards FCC and federal court precedent. “Beyond the legal and factual errors and omissions in the PFD [proposal for decision], Comcast also reiterates that the proposed decision remains wholly unnecessary,” the company said. “The matters at issue in this docket have now been under consideration for over nine and a half years, during which time the Board has not exercised regulatory authority over the terms and conditions of Comcast's VoIP service. Throughout this time, the FCC has applied nationally uniform, light-touch regulation to interconnected VoIP providers, and there has been no showing that the lack of further regulation by the Board has resulted in any adverse consequences to consumers.” AT&T, Verizon and the Voice on the Net Coalition supported Comcast in joint comments: “The Proposal conflicts with federal court decisions that squarely and correctly hold that VoIP services such as XFINITY Voice are information services under federal law because, among other things, they offer the capability for net protocol conversions.” The phone and VoIP companies cited a 2008 decision by the 8th U.S. Circuit Court of Appeals (Southwestern Bell v. Missouri Public Service Commission) and a 2010 decision by the U.S. District Court for the District of Columbia (Paetec v. CommPartners). “FCC decisions make clear that ownership and control of that device are irrelevant to the question whether that VoIP service offers the capability for a net protocol conversion and, therefore, is an information service,” they said. But eight independent RLECs said they strongly support the PFD because it "will create the potential for a more level playing field in the regulatory treatment of materially identical voice service.” Customers see no difference between voice services provided by legacy and VoIP technologies, the RLECs said. “The current regulatory mismatch between those services impedes the efficient operation of the competitive marketplace, which would be addressed in significant measure by the Board's adoption of the PFD.” The Vermont Department of Public Service and Green Mountain Power separately supported the proposed decision without additional comment.

The New York Public Service Commission greenlit Verizon's buying XO Communications with a condition to protect the jobs of about 100 existing XO employees in the state. Commissioners unanimously OK’d the $1.8 billion deal as part of a consent agenda vote at the commission’s Tuesday meeting. It was "approved because the transaction provides an overall net benefit to customers of both companies,” a commission spokesman emailed after the vote. “The PSC required Verizon not to lay off or take any action effecting an involuntary reduction of customer-facing jobs within XO Communications in New York State for four years, excluding retirement incentives and attrition.” Verizon now needs OK from the Pennsylvania Public Utility Commission, which also is expected to vote soon and next meets this Thursday (see 1701120051). In November, an administrative law judge there issued an initial decision to OK the deal without conditions. The FCC and FTC already OK’d the Verizon/XO deal last year. The acquiring telco didn’t comment.

After learning how the state commission may rule on wireless pole attachments by cable companies, the California Cable & Telecommunications Association asked to pull its petition to extend right-of-way (ROW) rules for commercial mobile radio services to cable. The California Public Utilities Commission said it may deny the petition next month (see 1701100062). In a Friday motion to withdraw posted Tuesday, CCTA said the public interest may be better served by withdrawing the petition than by “issuing a final decision based on incomplete (and potentially incorrect) information.” The proposed decision made clear to CCTA that the commission “would benefit from additional information regarding the cable industry’s interest in attaching antennas to joint-use utility poles, the services they intend to provide using those devices, and the regulatory authority they intend to rely on to provide such services.” The group said its petition may be moot given the proposed decision’s finding that cable providers can install wireless facilities by relying on CLEC authority, especially if the CPUC grants a separate pending petition by the Wireless Infrastructure Association to extend the ROW rights of CMRS providers to CLECs. "Most, if not all, of CCTA's cable provider members have CLEC affiliates,” the association said. If adopted, the proposed decision may spur pole access disputes in the state, the association said. "The Proposed Decision as drafted could be read to suggest that cable television providers’ use of even the wired facilities they install may be limited to providing cable (i.e., video) service and not, for example broadband services and/or that they have no rights to install wireless pole attachment even in furtherance of their provision of cable television services."

Comcast, Charter Communications and four other companies sought broadband grants in Massachusetts to serve 40 unserved towns. MBI set aside $19.68 million for the grant program. Monday, the Massachusetts Broadband Institute notified municipal leaders in the unserved towns about the six grant applications received in response to its request for proposals that closed Jan. 11, posting the applications on its website, an MBI spokesman said. The applications are under review and each individual town will decide whether to pursue a proposed solution with a private provider, he said. “The ultimate award of any grant funding from the MBI would be predicated upon many factors, including municipal feedback and approval by the MBI Board of Directors and the Executive Committee of the MassTech Board,” MBI said. Comcast proposed to deploy new broadband plant and offer Xfinity internet services to Goshen, Montgomery, Princeton and Shutesbury. Comcast wouldn't normally consider deploying to the towns, said its proposal. “With the MBI’s support, the economics of deploying broadband infrastructure to these areas would be altered.” Charter proposed expanding broadband service to Princeton, New Salem, Shutesbury, Hancock, Egremont and Monterey. The towns are contiguous to existing operations, represent a manageable capital investment given other obligations, and can be built out in a “reasonable period of time,” Charter said in its application. The other companies that applied for grants were Crocker Communications, Fiber Connect, Mid-Hudson Data Corp and Westfield Gas & Electric. The Institute for Local Self-Reliance slammed the MBI program as favoring big firms. “Comcast will be subsidized to serve the slightly rural while those living farther away are effectively abandoned,” institute Community Broadband Networks Policy Director Christopher Mitchell emailed Monday. “But doing it in rural areas where they do not have to serve everyone is a travesty. This is screwy economics -- the way to serve everyone is to mix rural with more dense populations and require service to all. In this MBI model, the left behind will require still greater subsidies in the future to be serviced rather than using an intelligent one-time subsidy to solve the problem permanently.” Responding to Mitchell, MBI Board Chairman Peter Larkin emailed, “For nearly two years, the MBI worked on regional broadband network solutions with limited success. The new Last Mile framework, launched by the Commonwealth of Massachusetts last May is centered on a ‘flexible, responsive and community-based approach to prioritizing affordable and sustainable solutions.’ The new RFP matches that goal, providing unserved towns with information about potential private sector options to close the broadband gap and full control over whether to proceed.” The RFP said grant applications serving multiple towns will be favored, he said. “Our hope is that towns engage in this process, but if one opts out or is not covered by a proposal, the MBI will continue managing that town through the parallel ‘Last Mile’ Readiness Process.” In December, the MBI awarded grants to three town-managed projects, he said. Comcast and Charter didn’t comment.

T-Mobile urged the California Supreme Court to reverse a lower court’s decision upholding a San Francisco ordinance intended to block installation of telecom equipment that would diminish the city's beauty (Case S238001). The California Court of Appeal for the First District said cities may consider aesthetics when assessing telco pole attachment applications, rejecting a challenge by T-Mobile, Crown Castle and ExteNet (see 1609160052). In a Jan. 20 opening brief, the companies said the state appeals court applied an incorrect standard of review when it said the challenge could succeed only if there were "no set of circumstances" under which the ordinance could be validly applied, the companies said. The ordinance conflicts with state telecom franchise rules in Section 7901 of the Public Utilities Code and the court "adopted an illogical reading" when it said municipalities must treat entities equivalently for temporary construction activities and occupations of the rights of way, but localities may discriminate among them when regulating long-term occupations. San Francisco hurts itself with the ordinance, the companies said. “While the rest of the country is moving forward to facilitate and streamline the wireless infrastructure deployments needed to support advanced services, some localities, such as the City and County of San Francisco … have enacted measures that stand in the way of progress.”

Arizona Corporation Commission staff sought comment on proposed language for a state E-rate program meant to provide an estimated $8 million state match of rural broadband funds for schools. ACC members voted earlier this month to launch the rulemaking, which would allow the state to apply for federal E-rate Category One funding by an April federal deadline (see 1701110062). In a Friday letter posted Monday (docket RT-00000H-97-0137), Elijah Abinah, ACC Utilities Division's acting director, asked for comments Jan. 27 and replies Feb. 7. He also included an agenda for a Jan. 30 workshop. The commission plans to release a second draft of proposed rules “on or about” Feb. 14, and another workshop or round of comments may follow, he said. Due to the tight federal deadline, the matter likely will be handled as an emergency rulemaking and get a vote at commissioners' March meeting, he said.