A bill now before the General Assembly that would place sharp restrictions on the local governments’ ability to offer broadband and wireless services has come under fire from municipalities across the state.
The Local Government Fair Competition Act, which had just passed the House Public Utilities Committee at press time, would require municipalities providing Internet service to turn a profit within four years, along with holding two public hearings and a special election. The law would also prohibit them from subsidizing such services.
The bill’s proponents, including the Alliance of North Carolina Independent Telephone Companies, assert that local governments enjoy an unfair advantage because they don’t have to pay taxes and can subsidize an Internet service even if it’s not making money.
Those opposing the bill—including the North Carolina League of Municipalities and the cities of Chapel Hill, Durham, Fayetteville and Greensboro—counter that it’s simply a handout to the telecommunications companies that will hamper municipalities’ ability to provide an important economic-development tool, especially in rural areas that private industry might otherwise neglect.
“This would severely affect the ability of local governments to offer this service—it’s that simple,” said General Manager Hunter Goosmann, of ERC Broadband, an arm of the nonprofit Educational Resource Consortium that aims to ensure that there is Internet service throughout Western North Carolina. “The concern is that it will cripple North Carolina’s ability to compete and extend this infrastructure. It would especially have an effect in the eastern and western parts of the state, which are more rural and are trying to use this to build their economy.”
Goosmann emphasized, however, that ERC hasn’t taken an official position on the bill. “We’re kind of stuck in the middle here,” he explained. “We have to work with local governments, small business and large companies to do what we do.”
At least one supporter of the bill agrees with that assessment but believes it’s a good thing. “Yes, it will definitely harm the ability of local governments to provide this, [but] that’s in its favor,” said John Hood, president of The John Locke Foundation, a conservative Raleigh think tank.
“This is scaling back government from expanding beyond its proper scope,” said Hood, adding, “Government should be in the business of providing real utilities like roads, sewer, water instead of muscling in on private business. It may not be as sexy, but it needs to be dealt with.”
But he disputed the idea that rural areas would be harmed by the measure as much as its opponents maintain. “That’s just empirically false. We shouldn’t assume that broadband service will come to those areas in the same way it would to Asheville or Charlotte. There are ways you can get Internet service on the side of a mountain.”
But Wally Bowen, executive director of the Mountain Area Information Network, sees the proposal as a corporate power grab. “This would … cut off the ability to get these services from anywhere besides a cable or telephone company,” he said. “This is fundamentally about corporate control—there are bills like this all around the country. There’s a full-court press by corporations to take this away from municipalities.” MAIN, an Asheville-based nonprofit, provides Internet access in rural areas.
All five of the bill’s sponsors on the Public Utilities Committee received $4,000 or more in campaign contributions from telecommunications-industry political-action committees, according to a report in the June 6 [Durham] Independent Weekly.
Meanwhile, a Senate bill co-sponsored by Buncombe County Democrat Martin Nesbitt would move in the opposite direction, allocating a portion of each municipality’s sales-tax revenues for providing broadband and community media centers, as well as restoring local governments’ authority over cable-TV franchise renewals in order to help fund public-access channels.