Senate Finance Committee Hears from Citizens, Cities and Cable Reps

For about 45 minutes yesterday, members of the NC Senate Finance Committee heard from people who support or oppose H129. They also heard from lobbyists from the cable and telcom companies. It was an interesting mix.

Currently, everyone seems to expect a vote on the bill this Tuesday, April 19th. I’ll post the time when it’s announced. It will probably be in the same room, LOB 544.

If you missed yesterday’s meeting, you can watch the meeting and hear the comments here on WRAL’s site.

Thanks to everyone who came out to support those of us who want better broadband in NC.

 

Paper: Muni Broadband Bill Quietly Tucked Into Another Bill

Okay, I know there’s a lot to keep up with in this ongoing battle, but there’s a new development you need to know about. According to the Greensboro News and Record’s Mark Binker, the municipal broadband moratorium from senate bill 1209 has been moved to another bill, house bill 1840; apparently to get around a committee that the sponsor, Sen. David Hoyle (D-Gaston), considered unfriendly.

Here’s today’s story, courtesy of the News and Record:

Muni broadband moratorium put in another bill

For those watching the municipal broadband moratorium bill (background from me here and from the N+O here) you have another bill to keep track of.

The Senate Rules Committee attached the broadband study and moratorium as constructed in S 1209 and dumped it into H 1840, which has to do with extending E-NC authority.

I asked Sen. David Hoyle, chairman of the Rules Committee, why he was sending over a bill that has already passed the Senate.

“I’m sending it over with something the House likes,” Hoyle said. “I can’t get a committee hearing on the broadband.”

Rep. Bill Faison, the House committee chairman holding onto the bill, attended Senate Rules to watch the proceedings but did not comment to the committee.

This is the legislative version of trading paint. If the House fails to concur on H 1840, the measure will be sent to a conference committee. At that point, if no senator signs off on a conference report, the bill goes nowhere. So Hoyle can say, give me a hearing on the muni broadband bill or I lock up you E-NC bill.

“All I’m asking for is a hearing, an up or down vote,” he said. “It’s not fair for someone just to hold my bill and not hear it.”

That collective coffee spit you just heard was Senate Republicans thinking to themselves about all the bills they can’t get heard in their own chamber.

Clarifications to News and Observer Article About NC Broadband Bill

The News and Observer published an article this week about the broadband fight in NC. While the reporter did his best to cover a big issue in a relatively small amount of space, some important points were left out.

First, you should know two things:

  • Before building our fiber optic network, Wilson asked the cable company to upgrade its network or to partner with us to build something better. They turned us down.
  • Broadband from the City of Wilson is much, much faster than cable modems. Local homes can get up to 100 Mbps upload and download.

The article is below in its entirety. My comments and clarifications are in blue italics. The copy is owned and copyrighted by the News and Observer of Raleigh. Now, on to the article…

Cable TV fights municipal broadband

BY JOHN MURAWSKI – Staff Writer

Alarmed by the prospect of competing for customers against local governments, the cable TV industry is pushing for a state law to prevent North Carolina cities from offering Internet and cable systems to their residents.

The industry, led by Time Warner Cable, wants to protect itself from what it calls unfair competition. The industry’s concerns are gaining urgency as some two dozen towns in the state are either planning or exploring their own telecommunications and television service for residents and businesses.

A proposed moratorium on municipal broadband has sailed through the state Senate and is now awaiting debate in the House of Representatives. But some lawmakers in the House are intent on derailing any proposal that would delay the development of local broadband networks. They say the future of the state depends on unfettered broadband access.

The bill is pending in the House Ways and Means Committee, whose chairman, Rep. Bill Faison, sees the moratorium as an attempt to protect the powerful cable monopoly. Faison, a Democrat who represents Orange and Caswell counties, is meeting Wednesday with representatives of the telecommunications industry and local government leaders to discuss options.

“I decide what gets put on the agenda,” Faison said. “It’s unlikely that any bill with a moratorium in it has a chance of getting through the House.”

Local growth

Virtually unheard of just a few years ago, a high-speed Internet and cable TV service offered by your local government is becoming a reality for some.

The City of Wilson’s $28 million Greenlight service is the prototype of municipal broadband in this state, launched just two years ago and now claiming about 4,800 customers. The City of Salisbury will be next with its $30 million Fibrant service, scheduled to be offered later this year. Meanwhile, Fayetteville is set to study its own version of municipal broadband this summer and could decide this year whether to proceed.

Additionally, the towns of Davidson and Mooresville recently bought telecom assets from Adelphia Communications during bankruptcy proceedings, and now both provide municipal broadband. Their jointly owned system has been hobbled by revenue shortfalls as the towns seek to convince more citizens to subscribe.

City officials say municipal telecom service is an economic development strategy that will increase competition and provide high-speed Internet access to those who lack any kind of broadband. They point out that local governments traditionally provide public services – water, sewer, electric, natural gas, transportation – where the options are nonexistent or inadequate.

“We’re running this as a public utility,” said Doug Paris, assistant to the city manager in Salisbury. “It’s really not a luxury anymore – it’s a necessity.”

Potential dangers

Opponents warn that towns run a major risk of defaulting when competing against Wall Street-backed industries. In addition to contending against Time Warner Cable, the state’s dominant cable provider with 1.7 million customers, government broadband networks would also have to compete against satellite services, AT&T’s U-verse where it’s offered, and the expected spread of Internet-streaming services.

Sen. David Hoyle, a Democrat from Gaston County, says he heard similar arguments from government officials decades ago when city halls were eager to get in on the business of selling electricity. Several dozen North Carolina towns, including Wilson, joined to buy a share in utility-owned power plants, and now their residents pay some of the highest power bills in the state.

Wilson is one of 32 cities in the NC Eastern Municipal Power Agency (NCEMPA) and yes, our residential electrical costs are higher now, but they are temporary. We are paying down debt from the early 80s after the 32 cities and towns helped CP&L (now Progress Energy) finish construction at Shearron Harris Nuclear Power Plant. We passed the peak of that debt a few years ago. Our internal costs are actually less than the state average.

A similar proposal last year was also deferred for study by the General Assembly’s Joint Revenue Laws Committee, which led to the bill proposed by Hoyle this year.

Hoyle originally proposed restricting municipal broadband by requiring a public vote on a general obligation bond issue before a town could invest in a broadband network. Hoyle said such a vote would essentially prevent the systems from being built once citizens see the costs involved.

But the Senate preferred a year-long moratorium so the matter could be further studied by a panel to be named by the Joint Revenue Laws Committee. If municipal broadband expands, Hoyle worries that it’s just a matter of time until local towns are asking the state for bailouts.

“They’re going to have debt up the ying-yang,” Hoyle said. “It’s people getting into business they don’t know anything in the world about.”

(Okay, a freebie here. We all trust local government to put out house fires, arrest bad guys and provide our drinking water. Providing better communications services is relatively simple.)

Faison’s concern is promoting universal broadband access. It’s estimated about 10 percent of the state’s population, mostly in rural and remote areas, lacks access to high-speed Internet. Still, the networks being developed by local governments largely overlap with existing networks.

While the networks overlap, the services don’t. Wilson provides much faster broadband speeds than the cable company – up to 100 M residential. It’s apples and oranges.

The argument

About half the nation’s states restrict municipal broadband. The N.C. Cable Telecommunications Association says local governments have an unfair advantage over Time Warner or other providers because they don’t pay taxes and consequently have significantly lower operating costs.

Other conflicts can arise as well. For example, in 2007, when Wilson was developing its Greenlight service, the town tripled its rate for using municipal utility poles from $5 to $15 a year. That raised the pole fee for Time Warner Cable from $82,000 to $246,000 a year, but Time Warner is still paying the old rate while it negotiates with town officials over the issue.

Before 2007, Wilson’s pole fee had stayed the same since 1975. The attachment fee increase was not related to Greenlight. The old fee schedule was outdated. By comparison, the cable company’s standard rates have doubled since 1997.

“When the regulator becomes your competitor, it’s not a good situation,” said Marcus Trathen, a lawyer for the cable lobby.

Wilson and other cities regulate only the pole attachments. The cable and telecom companies are regulated by the State of NC. The local regulation of cable services ended in 2007 after intense lobbying from the cable/telecom companies.

The moratorium provision before Faison’s committee is the result of a compromise between the N.C. League of Municipalities, the city government’s lobby, and the N.C. Cable Telecommunications Association, the industry’s lobbying arm. The moratorium doesn’t apply to towns that are already planning or developing municipal broadband, towns that received federal stimulus grants for broadband deployment, or towns chosen by Google for its Fiber Project.

Restrictions on municipal broadband also are opposed by Google, Intel, Alcatel-Lucent and several other telecom companies that wrote a letter to lawmakers in May.

“North Carolina should be lowering barriers to public broadband initiatives rather than establishing new ones,” their letter says, arguing that the state would be cutting off potential federal stimulus grants.

Both sides accuse the other of putting profits before the public interest.

“It’s like, say, Barnes & Noble saying we shouldn’t have a public library system because it stops private sector investment,” said Kelli Kukura, the League’s director of governmental affairs. “The bottom line is they need to get busy working on this or get out of the way so we can serve our citizens.”

S1209 in Finance Committee Tuesday, plus a surprise from Rep. Faison

Rep. Bill Faison

Rep. Bill Faison

Been a busy couple of days on the issue of next-generation broadband in our state.

First, unless they change the date again, Senate Bill 1209 should come up in the Senate Finance Committee this Tuesday, June 1st, at 1pm in the Legislative office building; room 544.

Yes, it’s scheduled for the first day back after a three-day weekend. :)

Now stick with me, here. This gets a little complicated, but it’s good news.

Rep. Bill Faison (D-Caswell, Orange) has introduced a second bill, House Bill 2067,  that would specifically allow Caswell County to build its own broadband network.

Mr. Faison’s bill lists broadband as a public utility, and that’s important. Some lawmakers, including the cable and telecom companies, have portrayed broadband as a luxury. The Independent Weekly of Durham covered the story.

More as this develops. I hope to see you Tuesday.

WBTV Charlotte nails it with fiber optics story

WBTV, the CBS affiliate in Charlotte did a really effective job this week explaining why fiber optics is better than the old fashioned cable lines. They covered our friends in Salisbury, NC, just a few hours from here, who are planning to launch their own fiber optic network later this summer. They will join Wilson as the only cities in NC with fiber to every address in town.

I love the opening line: “In the old days if you wanted to attract business to your town you built a railroad.  Later, you added highways, and phone lines.” Today, we believe next-generation broadband is just as important.

In Wilson, the tobacco market helped build our city in the 20th century. While tobacco is still grown in areas outside the city, the tobacco warehouses that fueled our growth have shut down for good. We need our Greenlight broadband network for the next century. Communication is a critical element of the information and creativity economies.

The FCC has explained that municipal broadband is just one way the US can improve its broadband infrastructure.  Senator Hoyle’s bill, S1209, sends NC in the opposite direction with additional burdens that will keep NC cities on the sidelines.

Lawmaker: We should promote other models, including the municipal

The Associated Press covered the NC broadband debate this weekend, and the News and Observer picked it up.

It mentioned that another committee is already studying this topic and quoted the chair of it: “Leaving this solely to the telecoms and the cable companies has not gotten us the best result we could get, and we should promote other models, including the municipal model,” said Rep. Bill Faison, D-Orange, who is leading a separate House committee examining the topic.

Wilson and Salisbury have invested millions into fiber to the home networks.  A number and name of this draft bill should be posted later in the week.

Editorial: Moratorium protects cable monopoly at communities’ expense

This Wednesday, May 5th, Senator David Hoyle (D-Gaston) will propose a moratorium on municipal broadband in NC. The Salisbury Post recently published this editorial about it. The moratorium, to be presented in the NC Revenue Laws Committee goes hand in hand with the cable company’s repeated attempts to change the law to protect its monopoly. Salisbury is building a fiber to the home network called ‘Fibrant’ that will be similar to Wilson’s Greenlight fiber network. Salisbury’s network will go live this summer. -BB

Cable wars in Raleigh
Published Monday, April 26, 2010 11:00 PM
Salisbury Post

Salisbury city officials say they’ve been assured that whatever happens to House Bill 1252, it won’t short-circuit the city’s fiber-optic cable to the home network. But there’s a good reason they, other municipal officials and local businesses are rallying opposition to the bill.

They know its passage would severely inhibit the spread of high-speed cable to many areas of the state, leaving Salisbury and a few other pioneering municipalities in a position similar to the lone wagon surrounded by an angry war party. Clearly, the cable industry wants to mount a pre-emptive attack on the municipal broadband movement in its infancy. It would be naive to think the bill wouldn’t seriously affect the long-term viability of the Fibrant system and others that have started up or are on the drawing board.

In pushing the House bill, industry advocates have spoken of the need to “level the playing field.” But it’s debatable who faces the bigger hills here — cable companies worried about losing customers through competitive disadvantage, or municipalities trying to keep pace with 21st century communication technologies. City governments can rightfully argue they want a level playing field, too, when it comes to attracting new businesses and providing necessary services to citizens. Broadband is comparable to a 21st century version of rural electrification or the interstate highway system. That’s why the federal government set aside $4.7 billion in stimulus grants specifically designated to help local governments like Salisbury provide broadband to unserved and underserved areas.

Yet, if the HB 1252’s intent becomes reality, such areas will be severely hobbled in their near-term ability to tap into the broadband revolution. Private telecommunications companies — in this case, primarily Time-Warner — will determine where services will go and when they will go there. Such decisions will be driven by short-term profits, not a long-range vision of community progress. That’s like letting one or two asphalt companies determine the future of North Carolina’s roads.

At this point, the fate of House Bill 1252 has yet to be determined. Last week, the Revenue Laws Committee heard the pleas of municipal officials, local businesses and others who support municipal broadband, as well as the arguments of cable companies who believe the municipal ventures enjoy an unfair advantage. In an ideal world, we wouldn’t be having this debate. The city of Salisbury wouldn’t need to enter the fiber-optic business because multiple cable companies would be fighting tooth and nail to provide that service. Instead, cable companies are fighting to preserve the near monopoly they’ve enjoyed in many communities. Rather than leveling the field, HB 1252 looks more like an attempt to bulldoze away consumer options.

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