A BILL TO BE ENTITLED
AN ACT to encourage the provision of advanced broadband telecommunications service to all citizens of north carolina.
Whereas, the 2015 Broadband Progress Report ("the FCC Report") issued by the Federal Communications Commission found that 35% of citizens of North Carolina residing in rural areas lack access to advanced broadband access, compared to only 4% of North Carolina citizens in urban areas; and
Whereas, the FCC Report found that "people living in rural areas and on Tribal lands remain persistently behind their urban counterparts in terms of broadband adoption and deployment to these unserved areas is not progressing quickly enough"; and
Whereas, the FCC Report further concluded that one of the primary barriers to adequate infrastructure investment and competition in the telecommunications market is the high cost associated with deploying and operating a broadband network, combined with low broadband adoption rates; and
Whereas, the infrastructure necessary to support deployment of so‑called smart meter technology can also simultaneously support broadband access to thousands of households that currently lack broadband access and produce significant energy savings that can serve as a self‑sustaining funding source for the deployment effort; Now, therefore,
The General Assembly of North Carolina enacts:
I.  Title
SECTION 1.  This act shall be known as and may be cited as the "Close the Digital Gap Act of 2015."

II.  Universal broadband access through energy savings upgrades to Electric power distribution network
SECTION 2.(a)  The General Assembly finds that the primary barrier to provision of universal broadband access across North Carolina is the expected rate of return on capital investment necessary to install broadband infrastructure in unserved or underserved areas does not exceed the cost of that capital, and that this barrier reinforces a digital divide with respect to broadband access that in turn mirrors and reinforces current patterns of economic disparity.
SECTION 2.(b)  The General Assembly further finds that the technology used to provide real‑time electric usage feedback from the universal deployment of smart electric meters can also be utilized to provide broadband access to its customers, and that these smart meters can empower consumers to analyze and reduce their energy use, save money on utility costs, and provide broadband access.
SECTION 2.(c)  The General Assembly further finds that electric public utility companies can realize significant gains in energy efficiency through universal deployment of smart meter systems, and the generating capacity made available through energy efficiency gains used to service population growth without the necessity of constructing additional generating capacity.
SECTION 2.(d)  The General Assembly further finds that the benefits of the avoided cost generated by smart meter related energy savings should be shared by all North Carolina consumers and electric public utilities.
SECTION 2.(e)  To this end, the North Carolina Utilities Commission shall do all of the following:
(1)	Issue Requests for Proposal to enter into contracts with as many firms or other entities in the network or telecommunications sectors as is necessary to establish a statewide Universal Broadband Smart Meter program that will include the following components:
a.	Smart meter technology at the household level that accommodates broadband access to the home occupant and the opportunity for remote real‑time electric usage feedback.
b.	Remote energy usage management software and hardware interfaces to promote average household energy savings of at least twenty percent (20%) through peak shaving, peak avoidance, and other cost‑saving electric usage management practices.
c.	"Last mile" connectivity solutions that bridge the gap between existing broadband infrastructure and unserved or underserved users that maximize speed, reliability, and noninterference with existing telecommunications systems and networks, and that can feature a variety of last mile solutions, such as WiMAXX (Worldwide Interoperability for Microwave Access) or BPL (Broadband over Power Lines) technologies, avoiding complete reliance on any particular last mile solution.
d.	Funding of the Universal Broadband Smart Meter program drawn from resale by the electric public utility's share of the energy savings created by the installation and use of smart meter systems.
(2)	Execute a contract with the firm chosen to implement subdivision (1) of this section and exercise oversight of the fulfillment of the contract.
SECTION 2.(f)  It is the intent of the General Assembly that ongoing program costs be funded by the electric public utilities based on the energy savings achieved through implementation of the Universal Broadband Smart Meter Program. The North Carolina Utilities Commission shall by order provide for the electric public utilities to expend remaining avoided cost‑savings on enhancements to its transmission and distribution networks to increase energy efficiency and on development of alternative energy resources, in order to provide the State with a lower cost, and more efficient power future. For purposes of this subsection, alternative energy includes a renewable energy resource, as defined in G.S. 62‑133.8(a) or any other energy source that is not derived from the combustion of peat or a fossil fuel.

III.  regulatory reform for local government broadband innovation
SECTION 3.(a)  G.S. 160A‑340.1 is rewritten to read:
"§ 160A‑340.1.  City‑owned communications service provider requirements.
(a)	A city‑owned communications service provider shall meet all of the following requirements:
	
(2)	In accordance with the provisions of Chapter 159 of the General Statutes, the Local Government Finance Act, establish one or more separate enterprise funds for the provision of communications service, use the enterprise funds to separately account for revenues, expenses, property, and source of investment dollars associated with the provision of communications service, and prepare and publish an independent annual report and audit in accordance with generally accepted accounting principles that reflect the fully allocated cost of providing the communications service, including all direct and indirect costs. An annual independent audit conducted under G.S. 159‑34 and submitted to the Local Government Commission satisfies the audit requirement of this subdivision.
	
(4)	Shall not, directly or indirectly, under the powers of a city, exercise power or authority in any area, including zoning or land‑use regulation, or exercise power to withhold or delay the provision of monopoly utility service, to require any person, including residents of a particular development, to use or subscribe to any communications service provided by the city‑owned communications service provider.

	
	
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(b)	A city‑owned communications service provider shall not be required to obtain voter approval under G.S. 160A‑321 prior to the sale or discontinuance of the city's communications network."
SECTION 3.(b)  Article 9A of Subchapter IV of Chapter 159 of the General Statutes, G.S. 160A‑340.3, 160A‑340.4, 160A‑340.5, and 160A‑340.6, G.S. 105‑164.14(d2), G.S. 62‑3(23)(l.) and Sections 2(b) and 5 of S.L. 2011‑84 are repealed.

Iv.  DOT BRoadBand Infrastructure
SECTION 4.(a)  G.S. 136‑18 is amended by adding a new subdivision to read:
"(46)	The Department of Transportation shall have authority to construct conduits for telecommunication cable in the State right‑of‑way, with the costs of construction to be borne through the leasing of the conduit to private telecommunications companies, where such construction and leasing is not otherwise prohibited by any other federal or State law. The Conduit Installation Account is created as a nonreverting account within the Highway Trust Fund to receive revenues from conduit leasing. The Department shall administer the Account. Revenue in the Account may be used only to fund the installation of telecommunications conduit in State right‑of‑way, as authorized by this subdivision."
SECTION 4.(b)  Article 2A of Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136‑44.17.  Installation of telecommunications conduit within State right‑of‑way.
As authorized in G.S. 136‑18(46), the Department shall include in its planning for new roads and for improvements to existing roads the installation of conduit for telecommunications cables when all of the following apply:
(1)	Less than fifty percent (50%) of households in the county where the road project is located have access to high‑speed data or telecommunications services. If a project is located in more than one county, the Department may evaluate each county separately under this subdivision.
(2)	A provider of high‑speed data or telecommunications services provides the Department with a letter indicating its interest in leasing the conduit from the Department at any time within five years of completion of the project."
SECTION 4.(c)  The Department shall report no later than May 1, 2016, to the Joint Legislative Transportation Oversight Committee and annually thereafter on its progress in implementing the program to install telecommunications conduit authorized by this act. The initial report shall include identification by the Department of any statutory or regulatory barriers to implementation of the conduit installation program. Each report shall include a list of highway projects eligible for conduit installation in the next year with a financial and market analysis and resulting estimate by the Department as to whether the conduit installation authorized by this act is likely to be cost‑effective for that project.

V.  Effective Date
SECTION 5.  This act is effective when it becomes law.