There is a lot of broadband legislation introduced every year in State legislatures, and most States only pass a few of the dozens of bills proposed each session. Every once in a while, a particularly egregious or curious bill gets introduced.

The Blandin Foundation broadband blog recently posted the text of proposed legislation in Minnesota for House Bill HF4659 that makes it much harder to build projects with grant funding in the state. The stated purpose of the bill is to provide protection for labor and to promote safety standards. But the practical purposes of the bill is to make it incredibly hard for ISPs to use broadband grant funds.

The proposed legislation would apply to both the State’s Border-to-Border grants as well as for federal BEAD grants.

For Minnesota Border-to-Border grants, all employees working to build grants, including employees of ISPs, contractors, or subcontractors, must:

• Be paid a prevailing wage.
• Be provided at least 80 hours of skill training annually at no cost to the employee. At least 40 of the hours must be hands-on instruction.
• Any employee working more than 500 hours per year must be provided with employer-paid family health insurance.
• Any employee working more than 500 hours per year must be provided with a post-retirement benefit equal to at least 15 percent of total taxable wages.
• If the grant office doesn’t get applications from ISPs that meet these rules, it is required to solicit applicants that will meet the new rules.

These new rules would apply to 50% of state grants awarded this year, 60% awarded in 2025, and 70% awarded in 2026 and beyond.

There are even more stringent rules for anybody applying for a BEAD grant:

• Applicants must use a directly employed workforce instead of a subcontracted workforce to perform placing, splicing, and maintenance work on networks. Public applicants for grants can meet this requirement by partnering with an ISP that uses a directly employed workforce.
• The criteria established by the legislation must represent 25% of the scoring criteria for winning the BEAD grant.
• Anybody winning a BEAD grant must publicly disclose a lot of information about wages twice per year.
• An ISP violating any of the rules would be barred from future grants.
• Locating existing buried facilities must be done by a safety-qualified underground telecommunications installer. All construction within 10 feet of existing telecommunications infrastructure must be done by a safety qualified telecommunications installer. No less than two safety-qualified underground telecommunications installers must be present at all times during directional drilling.

This bill is such a major departure from the way that networks are built that it looks to be intended to drive ISPs away from seeking grants. Throughout the industry, network construction is largely performed by small crews of sub-contractors. These companies have never been required to carry employer-paid health insurance or post-retirement benefits. Even those that do would likely not give these benefits to employees who work as few as 500 hours in a year. Even large telcos and cable companies don’t give health insurance and retirement benefits to part-time employees.

The requirement that all technicians must be employed by the grant recipient would kill most applicants from pursuing BEAD grants. Even giant ISPs use contractors to build networks. While there are likely a few ISPs who could use 100% employees to fulfill a grant, my guess is that this requirement would drive away most potential BEAD applicants.

It’s hard to understand the motivation for the bill since it doesn’t seem to benefit any particular class of ISP. Instead, the legislation just adds more costs to ISPs willing to accept grants and makes it more expensive to build networks. The practical result would be that very few ISPS would be willing to pursue grants in the state. The motivation behind the legislation baffles me.