Local broadband limits go to Perdue

State lawmakers gave final approval today to new limits on public broadband networks.

Posted 9:10 p.m. May 5, 2011 — Updated 12:08 a.m. May 6, 2011

Laura Leslie

NC state lawmakers have sent the governor a measure limiting local governments’ ability to set up public broadband networks.

The bill, H129, sets a higher bar for municipalities who want to get into the broadband business. If a private provider offers service to half the residents of an area, local officials would have to hold public hearings and a special election to get voter approval for any debt to build a broadband system. They would be barred from using revenue from other public utilities to subsidize the service, or from finding some other way to price the service below its actual cost.

The measure also strictly limits the expansion of existing municipal broadband services, including Wilson’s Greenlight, which offers far faster speeds than most commercial systems in the state.

Proponents of the bill, most notably Time Warner Cable and Embarq, complained that cities seeking to offer broadband have advantages – tax exemptions, municipal financing, and zoning and regulatory authority – that the private sector doesn’t enjoy.

Another bill supporter, Americans for Prosperity’s Dallas Woodhouse, said cities shouldn’t be allowed to borrow money for costly networks without the explicit approval of voters.

In an emailed statement, Time Warner Cable VP Jack Stanley said the bill’s passage “sent a strong message to the private sector. NC is business friendly and encourages the private sector to do what it does best; invest capital and create jobs for our NC citizens.”

“In addition, H-129 puts in place guidelines to protect taxpayers from being saddled with debt without first having a voice as well as bringing greater transparency to local government. This is a good day for NC businesses and a better day for our citizens,” Stanley said.

Opponents said it’s only a good day for the state’s two big telecom companies.

“This bill should be re-titled the Time Warner Cable Anti-Competitive Bill,” said Rep. Bill Faison, D-Orange. “It keeps our municipalities from providing services to their citizens.”

Faison accused the company of writing the legislation to maximize its profits, while refusing to offer high-speed service to areas it doesn’t deem profitable. “It’s the most arrogant thing I’ve ever seen,” he said. “They came to this body to get it done. And I’ll be dadgummed if we didn’t pass it.”

Wilson officials testified they had tried to persuade Time Warner to offer high-speed internet in their area. When the company declined, the town launched its 100mbps Greenlight network.

Now, Faison says, Time Warner’s high-speed service is 40% cheaper in Wilson, where it competes with Greenlight, than in the Triangle area. “The folks here get the shaft,” Faison said.

The measure passed its final House vote 84-32, with 19 Democrats joining the entire Republican caucus in supporting it. It now goes to the governor, who hasn’t yet indicated whether she’ll sign it.

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