Wednesday, June 06, 2007

When is a public utility not a public utility?

According to the telecommunications and cable industries: when it's the internet. My colleague Mark Kleinschmidt and I went over to Raleigh this morning to attend a hearing of the House of Representatives' Public Utilities Committee on House Bill 1587, "The Local Government Fair Competition Act." Local activist Brian Russell was also there.

This bill would make it prohibitively difficult for a local government body to get into the business of offering broadband to its constituents. As Fiona Morgan writes in today's Independent Weekly,

Largely ignored by the media, this tug of war between local governments and private industry is part of a trend in which state legislatures are carving out the nation's digital future by enacting laws that will govern the next generation of communications technology. Like the fight over net neutrality, these local laws will have tremendous impact on American's access to the Internet in years to come. But unlike that widely publicized congressional battle, these state-level regulations are struggled over in obscurity.

I expect that at our next Council meeting on June 11, we will join Fayetteville, Greensboro, and other cities in adopting a resolution in opposition to this bill. But our views certainly carried no weight in Raleigh this morning, despite the good efforts of Pricey Harrison (of Guilford County) and Angela Bryant (Nash County). Though the room was packed with opponents, many of them elected officials from municipalities and counties--Mark had hoped to speak--only one speaker was allowed in response to the statement by the industry advocate. But as it turned out, that one voice was powerful: it belonged to the mayor of Wilson, which is already in the business of running a fiber optic network.

Wade Hargrove, attorney with Brooks, Pierce, McLendon, Humphrey & Leonard, argued for the bill on behalf of the industry. These are the notes I took.

This is about fairness. It also requires cities to have a realistic business plan. It’s about government accountability.

The other side says we are neglecting rural North Carolina. That is not true. Eighty-two percent of the state has access. There’s more to be done, but it won’t be done if you don’t allow fair competition.

Some will say some communities need more and so government should do it. But at what cost? Our whole government is based on free enterprise. If you had closed your eyes at the hearing last week [May hearing of this committee], you might have thought you were in Moscow.

The telecommunications business is capital intensive and highly competitive. Cities have learned too late that telecommunications is more expensive than their consultants had said. Morganton is Exhibit A of why not to go into this business. Their municipal cable business told a private company to leave town. Morganton said no to free enterprise. It was a monopoly. Now it is losing money. It has a $1 million loss and $7 million in debt. There’s a lesson there.

A vote for this bill is a vote against government monopolies and against unfair trade practices.

And the following is from the remarks of Wilson Mayor Bruce Rose.

Wilson has a strong history of being an economic leader in the state. We were leaders in the textile and tobacco industries. Our state leaders were proud of us. Our city decided to invest heavily in traditional infrastructure.

Now, we have been successful in getting new industry. State incentives have helped. Our state was our partner.

We realized we needed to invest in fiber optics infrastructure. This time our state is not our partner.

Kill this bill. We know who wrote it. We are at odds with a powerful industry. We were warned about huge corporations with deep pockets. We were told they would turn the legislature against their own local governments.

This is a direct assault on the citizens of this great state. BB&T and S.T. Wooten, our colleges, the Chamber of Commerce, businesses and citizens are on our side. They’re tired of waiting for someone else to bring this infrastructure.

The title of this bill is misleading. It is anything but fair. Our local cable provider has used public records law to gain access to our business model. That’s not fair.

This is David v. Goliath and all his cousins.

Does the state plan to level the playing field between public and private colleges?

Does the General Assembly really want to prevent private/public partnerships like the one we already have?

I am not asking these huge corporations not even based in North Carolina to believe in the City of Wilson. I’m asking the Legislature to let us believe in ourselves.

After brief discussion, on voice vote the committee referred the bill to the finance committee. Representatives Harrison and Bryant apparently voted against, but I am not sure. It was hard to tell.

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