The North Carolina Senate voted this week in favor of legislation designed to limit the ability of local municipalities to build and operate their own fiber networks in competition with established communications service providers. The Salisbury Post, a local news outlet, reported that the North Carolina House now must approve the bill, which is expected to happen quickly—and Governor Bev Perdue would then need to sign it before it becomes law.

People in Salisbury, N.C. are particularly interested in the bill’s outcome because the community already had plans to build a fiber network before the legislation was proposed. As it currently stands, the proposed legislation includes an exemption for Salisbury and for community networks that are already up and running.

Supporters of the bill argue that it would protect consumers by requiring voter approval before a city can borrow money to build a fiber broadband communications network. Opponents say the legislation is anti-competitive and could prevent some communities from receiving any broadband service.

People in at least two North Carolina communities—Albemarle and Chapel Hill–apparently agree with the opponents, as both communities passed resolutions disapproving of the newly approved bill as well as another piece of anti-municipal broadband legislation that the state is considering. In identical wording, the resolutions (posted on the Community Broadband Networks site) argue that the bills “impose numerous obligations on cities and towns that private broadband companies do not have to meet” and that “North Carolina law has long permitted local governments to engage in public enterprises and there is no justification for treating communications enterprises differently from other public enterprises that are essential for healthy local economies.”

The resolutions also argue that the legislation will limit smart grid deployments, prevent collaboration among local governments through regional public safety networks, hinder the deployment of traffic management systems, bar municipalities from working with school districts and community colleges on shared networks, and interfere with basic government operations, thereby undermining the local economies.

A blogger on the Community Broadband Networks website accused North Carolina legislators of being influenced by campaign contributions from established service provider Time Warner Cable. “The result of this bill will be to lessen any incentive for private companies like Time Warner Cable and CenturyLink to increase investment in the communities they serve because they know the local government now has no power to build a better network that would threaten their monopoly profits. And in areas without any access to broadband, the present Legislature seems to have no interest in solving that problem until those rural folks can pony up campaign contributions on the level of Time Warner Cable.”

It’s true that the existence of community broadband networks—or even the threat of community broadband networks—has provided the impetus for some established service providers to upgrade their networks. For example, TDS Telecom deployed fiber in Monticello, Minn. so as not to see an exodus of customers to a high-speed community offering. And with so much at stake, incumbent carriers often battle hard against community networks and have sometimes been accused of using unsavory tactics in those battles.

Opponents point to several high-profile cases of community networks that experienced financial and governance problems —although supporters say those examples are rare exceptions and that most projects have had a far greater level of success.

The telecompetitor community almost always seem to have a lot to say on this topic, so perhaps we will hear them add to this dialog once again.


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4 thoughts on “North Carolina is Current Epicenter of Muni Fiber Networks Debate

  1. "Bill would outlaw adult content on municipally owned networks"( trhis statement was in another article on LinkedIn), what else will the munis be able to "outlaw"? Would they have the potential to become monopolistic in the services provided? Would the Time Warners and CenturyLinks be able to provide competitve solutions? As opposed to downplaying their current spend maybe we should look at a free market which causes competition,which helps consumers?

    1. Art, I think you are confused. The amendment to an amendment on the bill was made by Senator Apodaca, who is in the pocket of Time Warner Cable. The language to ban adult content from publicly owned networks was a gift to TWC, it killed an amendment that would have benefited communities wanting to build these networks. Adult content is a cash cow on these networks – not something any business plan lightly forgoes.

      As for if the network would somehow supersede state and national law by somehow kicking TWC and AT&T out of communities, well that would be unconstitutional on multiple fronts. These networks add to competition, they do not reduce it – which is why massive companies spend so much in state legislatures to preempt local authority to build them.

  2. "..legislators of being influenced by campaign contributions from established service provider Time Warner Cable." TWC wrote the bill – that amounts to a little more than just influence.

  3. Considering it's the peoples' money, it should not be surprising that the bar is set high for muni due-diligence.

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