Updated, see below.
More than 100 people—citizens, lobbyists, elected officials and members of the press—attended Wednesday morning's meeting of the House Public Utilities Committee. Those rallied by the Americans for Prosperity, sponsors of the tax day "tea parties," wore red shirts to show their support for the bill. Opponents wore yellow stickers that said, "Save NC Broadband."
Several hoped to speak about House Bill 1252, which would have required local governments that offer Internet and other telecom services to tack on to customer fees the difference in the amount it would cost a private company to provide the service and prohibit governments from "cross-subsidizing" the launch or operation of a system, a practice common in private industry. (For more background, see "Broadband bill would penalize cities," Independent Weekly, April 29, 2009)
But the only people who spoke were committee members and the bill's sponsors, who addressed the mounting controversy by introducing a substitute that would send the bill to committee for further study.
Study committees are often where bills go to die. That's what happened in 2007, the last time the General Assembly considered a similar measure, which is why Time Warner and the state's cable industry had opposed efforts earlier this year to compromise by turning the legislation into a study bill, says Rep. Ty Harrell, the bill's chief sponsor.
But Harrell says he does not intend to let the measure die but hopes it will have "a thorough chewing-on."
"Let me just say, this is a highly complex issue, and it's not as simple as many would like to think," Harrell said to the committee. "I think both sides of the coin are in agreement that this thing needs to be studied, it needs to be discussed."
Rep. Bill Faison, who chairs the House Ways and Means / Broadband Connectivity committee, argued that his committee would be a better venue for making that study than House Finance or the Revenue Laws Study Committee. Faison's committee originated out of an interim study committee on broadband Internet access, authorized by House Speaker Joe Hackney, that could continue its work even when the legislature is not in session. "That committee already has the knowledge base, knows the scope of the problem and has been making great progress," Faison said.
Politically, changing the bill's course likely means it will not be voted on by the General Assembly during the 2009-2010 session, as only those bills that either pass one body of the legislature by May 14 or concern finance and revenue are considered to have "made crossover."
Several committee members expressed concern that study of the bill should not be restricted to the House, and that state Senate members should also be included in the discussion. The committee passed a motion that would create a joint House-Senate committee, with Faison's broadband study committee as its foundation. But Faison noted that the Senate had neglected to appoint members to his study committee in the past.
"We're pleased that the bill's moving forward, that it's going to be studied," says Brad Phillips, who represents Time Warner Cable and the North Carolina Cable Telecommunications Association. "It's obviously a very polarizing issue, and we think the more it can be discussed, and the more closely it can be examined, the better the results will be."
Chapel Hill Mayor Kevin Foy is also pleased with the outcome. "My opinion is that if you look at the bill and you really study it, you would come to the conclusion that it's anti-competitive and is not good for the economic health of the state," he says. Chapel Hill is currently installing fiber-optic cable while upgrading its signal system. "We're creating the backbone for something we might use in the future. And I think that's really the key: Why would you cut off the ability of a municipality or anyone else who wanted to provide this infrastructure to people?"
Update 12pm 5/7/09: StoptheCap! reports that the N.C. Senate Commerce committee passed a substitute version of the companion bill, SB 1004, which also sends the legislation to study committee.