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Cable industry tries to throttle municipal broadband

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The state's cable TV industry is once again trying to quash what it deems unfair competition from local governments that provide their own TV and Internet services.

For the third consecutive year, the cable TV lobby has succeeded in getting legislation introduced in the N.C. General Assembly that would hamper competition from local governments. In the past two years the controversial bills got bogged down in legislative committees as supporters said that municipal broadband increases competition and Internet access.

The most recent incarnation of the bill, introduced last week in the state House and Senate, says it's contrary to good public policy to let a government agency compete with private industry for the provision of goods and services.

What the legislators have in mind are super high-speed Internet services offered by the cities of Salisbury and Wilson. Wilson's Greenlight and Salisbury's Fibrant service offer Internet speeds 10 times faster than the current top speed offered by Time Warner Cable. Municipal broadband also offers e-mail service, phone service and hundreds of television channels.

The local town governments, led by the N.C. League of Municipalities, in the past have fought similar legislation that was pushed by the N.C. Cable Telecommunications Association. This year's bill was introduced by two Republicans: Rep. Marilyn Avila of Wake County and Sen. Tom Apodaca, who represents Buncombe, Henderson and Polk counties.

Time Warner Cable, the state's dominant cable provider, has long argued that such municipal services represent unfair competition, potentially exposing city governments to a high risk of default on the money they borrowed to build out their broadband networks.

Essentially, the latest bills seek to take away any financial advantage of municipal broadband.

The legislation would require municipal broadband services to be operated out of separate enterprise funds, fully reflecting the cost of the services. It would prohibit towns from advertising their broadband services on the city's public TV channels. It would prohibit cross-subsidization of the services from other city funds. And it would bar the towns from pricing their services below the actual cost of providing the services, a proposal aimed at preventing towns from undercutting Time Warner.

Plus, the bill would require the broadband services to pay an equivalent in city, county and state taxes.

Wilson, with a population of 50,000, rolled out Greenlight in 2008; Salisbury, with 32,000 resident, introduced Fibrant last November.

Both Wilson's Greenlight and Salisbury's Fibrant service offer a top speed of 100 Mbps to download and upload files and data. 

Salisbury charges $125 a month for its 100 Mbps service. Wilson charges $149.95 a month for 100 Mbps.

 

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Purpose of Bill

This bill goes far beyond creating a level playing field.  It places communities in a strait-jacket while ignoring common anti-competitive tactics from companies like TWC including predatory pricing, cross-subsidies from non-competitive areas, pricing below cost, etc.

The section requiring imputing the costs that would be faced by a private provider are pure fantasy -- to the extent one can do that, it is subject to massive interpretation, a fantasy for the lawyers working for TWC to challenge.  

Finally, in a time when we all need the economy to recover, this bill will make businesses in North Carolina less competitive by ensuring they have too few choices for broadband services.  Without competition, there is less investment and higher prices.

The decision to build a community fiber network should be made locally, not in Raleigh with a bill that effectively bans community networks while pretending to be reasonable regulations.  

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About the blogger

John Murawski has been a full-time newspaper reporter since 1991, with stints at Legal Times and The Chronicle of Philanthropy (both in Washington, DC), The Philadelphia Inquirer and The Palm Beach Post (in South Florida) before arriving at the N&O in December 2004. At the N&O he covers energy (nuclear, coal, renewable, efficiency), hydraulic fracturing (or "fracking"), public utilities and health care. His beat includes PSNC Energy, Piedmont Natural Gas, Duke Energy Progress, PowerSecure International, GlaxoSmithKline, Merck, Novo Nordisk, Pfizer, Biogen Idec and others. He has also contributed more than 30 book reviews on topics spanning botany, history, science and religion. You can reach him at 919-829-8932 or e-mail him.
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