Raleigh, N.C. — A bill that would limit municipal efforts to provide telecommunications services cleared a House committee Wednesday after a tense hearing.

Cable television and telephone companies are backing House Bill 1587, which would put restrictions on cities and counties that try to offer residents such services, including high-speed Internet.

"It's an issue of fair competition and local government not using their taxing and borrowing authority in a way that gives them a competitive advantage over private business," said Randy Fraser, a lobbyist for Time Warner Cable.

The bill would require municipal communications services to charge taxes so their rate structure is comparable to that of a private service and would prevent government workers from working for the cable or Internet service while being paid by another department.

Wilson officials plan to borrow and spend $30 million by next January to wire the city for high-speed Internet, cable and phone service. They said they are tired of waiting for Time Warner to upgrade service to the town, which isn't seen as a major profit center because of its size.

Most government offices are already connected by fiber-optic cables, along with two of Wilson's biggest businesses.

"The bill you are considering would be a devastating blow to local governments all across the state," Wilson Mayor Bruce Rose told members of the Committee on Public Utilities Wednesday.

Industry representatives fired back that many municipalities have failed at the cable business before, costing taxpayers millions.

The bill cleared the committee and was sent to the House Finance Committee. As a compromise, lawmakers stripped out a provision that would require a voter referendum before getting into the telecommunications business.

But local government representatives said they aren't giving up their fight against the measure.

"The telecommunications industry is very wise and strategic, and they introduced the bill in a committee that they knew it would pass. We simply wanted to get our message heard, and we're preparing for the next battle that lies ahead," Wilson City Manager Grant Goings said.

"This isn't David versus Goliath. This is David versus Goliath and all his cousins," Rose said.