A battle over the right of municipalities to offer broadband services has erupted for the fifth time in four years in the North Carolina State Legislature.

This time, there’s both a bill that could curb the ability of cities to offer broadband to their residents and an opposing pro-muni bill that would expand the right to offer broadband to county governments. For the first time in the now long-running battle, however, it appears that the anti-muni broadband bill stands a reasonable chance of passing, says N.C. State Rep. Kelly Alexander.

Alexander, a Democrat, is the sponsor of the pro-muni legislation, and he sits on the N.C. House Select Committee on High Speed Internet Access in Rural and Urban Areas.  On Feb. 15, based on recommendations of that committee, he introduced a bill “providing that counties have the same authority as cities to engage in public enterprises related to cable television systems.” The bill was passed on first reading the next day and sent to committee, but it since has been foundering, ignored and “sidetracked,” according to Alexander.

Meanwhile, Rep. Marilyn Avila, a Republican and also a member of the committee, has balked at the committee recommendations. On Feb. 16, she re-introduced essentially the same legislation that went down in flames last year, one that its backers insists simply “levels the playing field” between municipalities and private companies. 

The bill, this year called “An act to protect jobs and investment by regulating local government competition with private business,” strictly controls the ability of municipalities to fund broadband services. It prevents such financing techniques as using seed money from other municipal services. That bill was passed on first reading on Feb. 21, and also sent to committee; in contrast, however, hearings on it are starting almost immediately.

Avila Bill Could Pass

Even pro-muni forces agree Avila’s bill sharply contrasts with three earlier bills that were defeated in past years. Those would have banned municipal broadband outright, while the new bill does allow for it, albeit with strict financing caveats. The softening of the bill could help it win passage, especially in a legislature now dominated in both houses by Republicans following last year’s elections.

“There are enough members (of the North Carolina legislature) who are business-oriented that the level playing field bill has the edge right now,” says Alexander, noting Democrats sponsored previous anti-muni bills. Indeed, a dozen of the 46 sponsors and co-sponsors of the current bill are Democrats, which gives the anti-muni bill a bipartisan cachet.

The situation has left pro-muni forces crying foul, especially those in the few N.C. municipalities that have fiber offerings in place already (those would be grandfathered in Avila’s bill). “It’s called a level playing field, but it’s really asking towns to do more than a private company would do,” argues Brian Bowman, public-affairs manager for the city of Wilson; that town’s “Greenlight” municipal fiber network signed its first paying customers in late 2008.

Bowman, the prime author of a blog that attempts to rally support to defeat the anti-muni legislation, says, “I’m confident that whenever the cable companies roll out a new service, they’re subsidizing it with profits from other services.”

And not only would cities be prohibited from using similar techniques – perhaps using water-system revenue for seed funding of broadband, for instance – Bowman points out that cities can’t hide revenue transfers the way private companies can. “They say level playing field, but they’re not willing to be as transparent as we are,” he maintains. “It’s really asking towns to do more than a private company would do.”

And even if Avila’s bill passes, a big unknown is whether North Carolina’s Democratic Gov. Bev Purdue will sign an anti-muni broadband bill into law. So far she hasn’t said, and Alexander admits he hasn’t asked her about her position.

-Stuart Zipper

The Daily

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