news-record.com

RALEIGH — Cities and counties would have to stay out of the broadband Internet business for the next year while lawmakers come up with rules to govern when it’s appropriate for local governments to own such systems, under a proposal that cleared the Senate Finance Committee on Wednesday.

Five North Carolina municipalities have or are building their own Internet systems and would be allowed to continue those efforts.

But senators said other local governments should wait until lawmakers can lay down guidelines on questions such as when is it appropriate for cities to issue debt to pay for such systems.

If lawmakers do not draw up such rules by the end of the 2011 session, the moratorium would end.

“This is not ... a peace treaty. It is an armistice,” said Sen. Dan Clodfelter , a Mecklenburg Democrat. Debate over prior versions of the bill has been heated, he said, and has not given lawmakers time to consider the issues at hand.

“I just don’t believe ... that government at any level should unfairly compete with the private sector,” said Sen. David Hoyle , a Gaston Republican who has been pushing for harsher versions of the bill, such as one that would have required a public vote before a city borrowed money to create a broadband system.

Utility companies have argued that cities can borrow money at lower rates than businesses and can charge fees to access rights of way, giving governments an unfair edge in the business.

But representatives of city governments have argued that private companies don’t always provide for the needs of residents, who are sometimes left out of the digital revolution by slow or nonexistent Internet service.

The Greensboro City Council passed a resolution opposing the broadband measure Tuesday night, but did so before the bill was revised to be a temporary moratorium.

“In general, it’s an option that we’d like to preserve,” said Assistant City Manager Denise Turner . Greensboro has no immediate plans to go into the broadband business but is competing for the high-speed system that Google has proposed installing in one community across the nation.
Hoyle said language in his bill would exempt Google from the prohibition.

Turner said the city is still reviewing the draft of the bill that cleared committee. But she pointed out that Greensboro was a test market for Time Warner Cable’s tiered-pricing plan.

The plan provoked outrage among consumers that eventually forced the company to back off the idea of charging customers different rates based on how much bandwidth they consumed.

“That’s the type of situation we may not want to be vulnerable to,” Turner said.

Although the measure has support among both Republicans and Democrats in the Senate, its fate in the House is less certain.

Rep. Hugh Holliman , a Lexington Democrat and the House majority leader, said the House might consider the Senate bill but added that making sure everyone has access to high-speed Internet should be a high priority for the state.

“It boils down to whether the industry is serving the people,” Holliman said.

Rep. Bill Faison , the chairman of the House’s Ways and Means and Broadband Connectivity Committee, said he opposes the measure, even if it is a one-year moratorium.

“I can’t see a reason why you would give cable companies and (phone companies) another free year and not have cities in a position to take care of their own needs,” Faison said. “I think that ends up hurting people.”

However, Faison said he’s been told that the bill might not come to his committee.

“I don’t know what’s going to happen with it,” he said.

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com