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SB 165 redraws municipal broadband rules; cities warn new requirements could raise costs and require voter approval for revenue bonds
Summary
Senate Bill 165 would impose new reporting, access and governance requirements on municipal broadband utilities and would require voter approval for certain revenue bonds; municipal leaders warned in LPC discussion that the draft could raise costs and create operational uncertainty.
Senate Bill 165 would change municipal broadband rules, according to League presenters and city delegates. Staff provided a brief legislative history: a prior decade of litigation and a patchwork of municipal wholesale models has led to the current situation in which roughly a dozen cities operate fiber wholesale networks or participate in shared systems (e.g., UTOPIA partners).
What the bill does: Staff and municipal leaders said SB 165 would (1) require municipal systems to provide non‑discriminatory access to incumbents and other service providers, (2) impose an annual, public utility‑style accounting and reporting requirement (including continuing‑disclosure‑style material currently provided to bondholders), (3) create a statutory separation between regulatory functions and service operations so the same staff, property or data cannot be shared without safeguards, and (4) for certain financing structures — notably sales tax revenue bonds — require voter approval for the bond issuance (a new statutory voter requirement for revenue bonds).
City officials’ concerns: Gary Hill (Bountiful) and other city speakers said the annual reporting and the firewall between regulatory and operational functions would increase costs and complexity for municipal providers. They also said the conduit/access provisions contain undefined terms (for example, “conduit” size and scope) that could create operational uncertainty. Bountiful staff emphasized the reporting duplicates disclosures already made to bondholders and that the statutory voter‑approval requirement for sales‑tax revenue bonds would be “a new thing” not currently in state law. Kate Bradshaw, also of Bountiful, urged caution: she described a multi‑year local review the city completed before building its network and said a voter‑approval requirement would limit municipal discretion and expose elected officials and cities to heavy public scrutiny by private interests.
Arguments in favor: Sean Guzman (St. George City) and other speakers argued municipal infrastructure has effectively addressed persistent service gaps in underserved neighborhoods where incumbent carriers would not invest. Guzman said local wholesale infrastructure can enable multiple retail providers to serve those areas and noted federal broadband funding rules can leave gaps if an area already meets minimum speeds.
Staff and sponsor engagement: Presenters said they had met with the sponsor and are seeking amendments; the sponsor signaled willingness to consider some adjustments but indicated the sales‑tax revenue bond provision was important.
Next steps: League staff and member cities plan further conversations with the sponsor and recommended tracking substitute language closely. No formal League position or committee vote was recorded at the meeting.
