The Wilson Times posted an editorial Wednesday that explains these two bills better than I’ve seen anywhere else. We’ve had our disagreements with the paper, but they really cut through the fog on this one.
Here’s the entire entry.
State shouldn’t block local broadband
Two years after an unsuccessful effort by cable and telephone companies to pass a bill through the North Carolina Legislature called “The Local Government Fair Competition Act,” opponents of municipal broadband services, who seek to make it difficult if not impossible for a municipality to build and market its own high speed communications network, are at it again.
And, as was the case in 2007, the stakes for the City of Wilson couldn’t be higher.
Unlike two years ago, when Wilson was just starting the process of building the fiber backbone for its $28 million Greenlight network, the city now has that network fully established and is marketing its cable, Internet and telephone services to residential and business customers throughout the city.
So far, about 3,000 customers have signed up for Greenlight, which competes with Time Warner, Embarq and other companies for a share of the Wilson market.
The bill introduced last week in the N.C. House would raise the costs and regulations for cities marketing their broadband services. The House bill (1252) is identical to a Senate bill (1004) introduced last month.
Among the key points of the bill, which supporters call the “level playing field” bill, are:
* Prohibiting cities from using any general revenues, including property taxes or sales tax proceeds, or money from any other utility fund to start or subsidize communications services.
* Banning cities from pricing any communications service below the cost of providing the service.
* Requiring the communications service to “pay” the city an annual amount equal to the property taxes and other fees a private provider would be required to pay.
* Requiring an independent, annual audit for all costs associated with the communications services.
Catharine Rice, a communications consultant who advised Wilson’s planning for Greenlight, calls the bill an attempt by the telecommunications industry to eliminate municipal broadband services, and we agree.
While some of these regulations seem reasonable — in particular we agree that municipalities should not use tax funds or other utility funds to subsidize a prohibitively lower rate to drive the private providers away– the accumulative effect of the proposed legislation would be to make it cost prohibitive for a municipality to build and support such a network.
Ironically, the proposed state legislation comes at the same time that the recent passed American Recovery and Revitalization Act includes $4.7 billion targeted for the development of rural communications infrastructure.
Wilson started Greenlight because it felt it was not being adequately served with the kind of high-speed Internet connections that are essential for economic development. The city made the decision that it should develop its own network to help make Wilson more marketable for both companies and new residents.
In doing so, it took on the area’s private providers, and so far the winner appears to have been the city’s consumers. There is no question that overall service has improved, and Wilson is one of the few communities where Time Warner has not raised its rates the last two years.
What Wilson decided to do may not be the right decision for other communities. Each community has to make that decision for itself.
But the state should not pass legislation that effectively makes that decision for them.
Filed under: Media Coverage