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NC towns, telecoms battle to offer Internet service

Posted March 17, 2011 4:01 a.m. EDT
Updated March 17, 2011 7:09 p.m. EDT

— A revamped version of a long-running battle between telecommunications companies and North Carolina cities that have started their own broadband Internet offerings returned to the General Assembly on Thursday.

The House Finance Committee debated a bill that would create new requirements for cities and towns to build their own broadband networks. House Bill 129 calls for all municipal telecom providers to follow the same local, state and federal regulations as private companies and to pay an amount equal to the taxes that a private telecom provide would pay.

Existing municipal networks, such as one Wilson spent $28 million on four years ago, would be exempt from parts of the bill. The requirements also wouldn't apply to communities where at least half of residents don't have access to private broadband services.

"Our intent was never to harm the cities that are currently in the business," said Rep. Marilyn Avila, R-Wake, who sponsored the bill.

In addition to Wilson, Salisbury, Laurinburg, Morganton, Davidson and Mooresville run their own local telecommunications networks.

"They've committed their citizens to some terrific debt for these services," Avila said.

Telecom providers and some municipalities have argued annually in recent years over who has the right to sell high-speed Internet service. Cable and phone companies argue municipalities have financial advantages that they can't compete with, while cities say telecom companies aren't extending super-fast Internet at reasonable prices, putting rural areas behind in the wired world of commerce.

"What this is is Time Warner Cable's efforts to cut out municipalities as a potential competitor, and it is a monopolistic bill from the word go," said Rep. Bill Faison, D-Caswell. "We still have people who are largely under-served throughout many areas in our state."

Time Warner Cable officials denied allegations that the company was trying to squelch competition.

"The bill is intended to create a level playing field so, If local governments want to provide commercial retail services in direct competition with private business, they can't use their considerable advantages unfairly," the company said in a statement.

Wilson has about 5,600 customers for its broadband service, and an outside consultant estimates that both city and Time Warner Cable customers have saved more than $1 million because of the competition.

The Finance Committee didn't give final approval to the bill, which still faces debate in the full House and Senate if it makes it out of committee.