Update 4/16: A vote on the bill was postponed to next Wednesday, April 22.
N.C. Rep. Ty Harrell, who represents western Wake County in the General Assembly, last week introduced a House companion to a Senate bill that would effectively stop local governments from building their own broadband Internet and other telecommunications services if they compete with private industry.
Harrell is an otherwise progressive legislator. He's a co-sponsor of the comprehensive sex education bill, the Healthy Youth Act and the anti-bullying bill, the School Violence Prevention Act. He has twice received our endorsement. But by sponsoring HB 1252, Harrell has angered a wide grassroots base. Since introducing the bill, he says he's heard from many progressives who oppose it.
"I did not know there would be this type of response, to be honest with you," Harrell said in an interview.
He’s likely to hear more of that response this Wednesday, April 15, when the same coalition that fought the anti-muni broadband bill in 2007 plans to attend the House Science and Technology Committee meeting at 11 a.m. in Legislative Office Building room 425.
Harrell is chairman of that committee (though under House rules he won’t chair discussion of a bill he sponsors.) He says Time Warner Cable is based in his district and approached him about sponsoring the bill, which would require local governments to tack on to the fees they charge consumers the difference in the amount it would cost a private company to provide the service. Also under the bill, a city could not use government funds to “cross-subsidize” the launch or operation of a system, a practice common in private industry.
“You’ve got the municipalities who are more of less being subsidized by private industry in the sense that they don’t pay property tax, they don’t pay income tax, they receive rebates on their sales tax for these services and they have access to tax-free financing,” Harrell said, summarizing the industry’s argument. “I wanted to make sure that I look out for the businesses that are in my district. It was not an intent to rub out or punish municipalities that try to provide this service.”
But the bill’s opponents say that’s precisely the industry’s goal. They say these prohibitions artificially increase the cost of the municipal service and impose obligations that private industry does not have to meet. The cities of Wilson and Salisbury have already beaten a path to Harrell’s door, seeking to explain that building their own telecommunications infrastructure allows them to offer faster speeds and greater capacity than private industry is willing to build for their citizens.
The League of Municipalities, which lobbies for the interests of towns and cities across the state, is circulating a resolution to their members laying out the arguments against the bill (PDF).
Among the League’s concerns is the fact that North Carolina would be ineligible for $4.7 billion in federal stimulus grants set aside for local and state governments to provide broadband Internet service to unserved and underserved areas.
The timing of the bill is made worse by Time Warner Cable’s recent announcement that it would institute bandwidth caps for its customers in Greensboro and other cities nationwide. Customers who use more than their capped allotment (40 GB being the highest tier) will have to pay $1 per extra GB. Those customers are not happy and they're fighting back with help from national groups like Free Press.
This year's legislative effort is very similar to one the phone and cable industries unsuccessfully pushed in 2007. Harrell says he was unaware of the widespread opposition and heated debate that legislation inspired until after he filed HB 1252. “I was unaware of this being a hornet’s nest last time,” he said.
The main difference is that this year's legislation applies to "underserved" areas but leaves "unserved" areas--the ones private industry has no interest in providing services--up for grabs. In other words, it applies only in places where local governments would compete with private industry, even if, as in the municipal system provides much faster speeds and higher capacity than anything private phone and cable companies are willing to offer–and even if the private services are not available to all citizens.
Harrell says he tried to find a compromise. Opponents suggested a study bill, but Harrell says the industry representatives refused to consider it. “Having gone through those battles last time, the proponents of this bill were basically saying, ‘We’ve gone down that road before and we want to have it heard in committee. I said, ‘OK, since my name is on it and you’re in my district.’”
“From the standpoint of the parties that will be lined up against this thing again,” Harrell said, “many are friends of mine, people that I know personally and people that are politically supportive of me – or were. They’re going to voice their concerns. But I think this is worthy of at least having the discussion.”