Municipal wireless
I spent part of today working up a short story on H.B. 1587, a bill that would put hurdles in front of local governments that want to offer "communication services." It is due to be heard in the House Public Utilities Committee Wednesday at 10 a.m.
From that story:
Bill opponents are most concerned about the ability to offer Internet access, which is increasingly seen as a necessity for businesses and education. They say the proposed restrictions could hurt municipal efforts to recruit businesses or help bring affordable broadband Internet to lower-income areas."Broadband is just that important. It's just like bringing in electricity or water or gasoline, it's that much of a need," said ToNola Brown-Bland, an assistant city attorney for Greensboro.
Businesses say the measure merely ensures governments won't use their powers to undercut prices offered by private companies.
Click here for the full story.
Although communication services include a bunch of things - phone, cable tv, etc... - the piece of it people seem to be really concerned about is broadband internet. Local governments see broadband as an essential utility for attracting business, up there with water and electricity. There's also a question of providing internet access to low income and rural areas.
Every once in a while, you'll talk with folks on either side of a story and they'll be talking past one another. This was one of those. It was sort of like I was talking to two different groups of folks about entirely different bills.
Basically, the bill is backed by utility providers like AT&T and Time Warner. It is opposed by some municipal governments (including Greensboro) and some public interest advocates who see it as anti-consumer (NC PIRG and AARP). One side is absolutely sure this thing is necessary. The other side is convinced it is unnecessary and aimed at curbing competition.
In Edition 1, the bill would require local governments to hold public hearings and a referendum before getting into the communication business. It also would prohibit cities from using other sources of revenue (taxes, other fees like those paid for garbage service) to subsidize the communication service. And it would require the service to begin paying for itself within four years, considered a very high standard.
Rep. Hugh Holliman, one of the bill's sponsors, told me today that the original bill favored the original companies too much and that a re-write would be considered in committee tomorrow. Some of the bills more onerous provisions would be toned down or eliminated, he said. The referendum requirement was particularly due to be scrapped, he said.
However, bill opponents say they have not seen a draft of the revisions, so they can't vouch for whether their concerns have been met. Also, they are worried that the committee will refuse to take public comment on the bill.
Some linkage from the pro side:
- An conservative outfit on the left coast call The Pacific Research Institute did a report that frowns on municipal wireless. "When faced with strong competition from the private sector, most government-run networks save resorted to predatory pricing to achieve fiscal solvency: of those in our sample that reported their earnings in 2004, 69 percent priced their services below cost, recklessly undercutting incumbent providers in hopes of forcing them to capitulate and leave the marketplace."
- The John Locke Foundation's John Hood likes the bill. "Municipalities seem to be under the impression that their citizens will lack access to the Internet without government intervention. It’s one of the oddest misperceptions of reality I’ve ever seen."
Some linkage from the con side:
- A fact sheet circulated by the City of Greensboro, argues " On the whole, local government is not ready to offer broadband services, but you should vote against HB 1587 so that the choice to provide such service remains an option of last resort that can be used to develop universal broadband service as a means of assuring a stable, secure and competitive economy for all."
- The blog MuniWireless has been critical of the bill. "North Carolina’s "Local Government Fair Competition Act" requires so much local input into the process that it promises to tie up projects with enough red tape and nasty politicking to keep them from getting off the ground," the site argues. (Second post from that site here.)
On more bit of context: in the past General Assembly session, the honorables passed a bill that shifted regulation of pay television service to the state level. One big point of negotiation on that bill involved whether utilities would have to extend services throughout an entire city or county. Although there are provisions in what is now the law to prohibit cherry-picking (choosing areas to serve based on income or race) there can still be gaps in coverage.
So when I spoke to her earlier today, Rep. Pricey Harrison pointed out that the 2006 bill allowed gaps in coverage. The bill due up for a hearing on Wednesday, she said, would make it hard for government to fill those gaps.
It should be an interesting hearing.