An obscure Pennsylvania law has snarled efforts to bring faster internet speeds to rural communities. Now it might complicate a historic infusion of federal funding.

The Infrastructure Investment and Jobs Act includes the largest-ever federal investment in broadband. Pennsylvania could receive as much as $1 billion — enough to seriously move the needle. But the state may now have another, more unique problem. In 2004, Pennsylvania lawmakers gave telephone companies what one critic at the time described as a “virtual veto” over publicly-owned networks they saw as unwelcome competition. But for years afterward, the law was rarely invoked. More recently, local governments flush with federal dollars from two pandemic stimulus packages have begun ambitious broadband projects that place them directly in the crosshairs of that law, which is facing new challenges and fresh scrutiny. Already, the restrictions have prompted officials in the Southern Alleghenies (PA) region to get creative. Instead of working within the confines of the law, local officials decided to sidestep it altogether by creating a separate nonprofit to deal with broadband expansion. In legal proceedings in front of the state Public Utility Commission, the state agency that oversees the phone companies, fundamental questions about how the almost two-decades old law should work are being hashed out for the first time.