Lawmakers eye blocks on fiber optic systems

By Emily Ford

eford@salisburypost.com

Local officials say they have convinced state legislators to exempt Salisbury from a bill that would limit the ability of municipalities to operate broadband networks.

Salisbury recently launched Fibrant, a fiber to the home network that competes with private telecommunication companies to provide Internet, phone and cable TV service.

This marks the fourth year that legislation threatens municipal broadband systems like Fibrant.

But Mayor Susan Kluttz said state lawmakers have assured her they will rewrite the bill to exempt Salisbury and other cities with networks that are up and running.

“We were able to have a really positive discussion with them and explain to them what this situation means and the impact it could have on Salisbury,” said Kluttz, who spent a day and a half in Raleigh with Assistant City Manager Doug Paris meeting with legislators.

Sponsors pulled the bill, which was scheduled to be heard Wednesday by the Public Utilities Committee.

“They did not want to do anything to harm Salisbury or any other city,” Kluttz said. “There was already some partial exemption in the bill, and we expect to have full exemption.”

Before the bill is reintroduced, Kluttz, Paris and other community broadband advocates will meet with cable companies to try to find a compromise. Paris said he would like to see public-private partnerships that could end cable companies’ repeated efforts to restrict municipal broadband networks.

Before launching Fibrant, the city tried to partner with Time Warner Cable and AT&T to improve telecommunications services in Salisbury, where some residents and businesses could not access high-speed Internet, Paris said.

“That may very well be the way it goes,” he said. “That is the direction that would be best.”

Titled “An act to protect jobs and investment by regulating local government competition with private business,” the bill would impose restrictions on cities that want to create their own broadband systems by curbing their ability to fund the networks, advertise them or price the service below cost.

Cable companies have backed similar legislation for four years.

“Cities have unfair advantages,” said Melissa Buscher, Time Warner Cable’s vice president of communications for the Carolinas. “If municipalities want to get into a business already offered by the private sector, we welcome the competition, but we want to level the playing field.”

Cities can cross-subsidize their networks by taking money from another utility fund, Buscher said. When cities get into the broadband business, they become not only a regulator for incumbent providers, but also a competitor, she said.

After Wilson launched the Greenlight network, the city increased pole attachment fees by 300 percent for private providers like Time Warner, Buscher said.

The N.C. Cable Telecommunications Association says local governments don’t pay taxes and consequently have lower operating costs.

“Salisbury with Fibrant is not providing any service that was not already being provided by some of the largest and most sophisticated communications companies in the country,” said Marcus Trathen, a lawyer for the N.C. Cable Telecommunications Association.

North Carolina has no rules that govern how competition between the public and private sectors is to occur, Trathen said, and cities can incur large amounts of debt with little to no citizen involvement.

Salisbury borrowed $30 million without voter approval to build Fibrant.

“Cities are particularly ill-suited to competition in a technology-based industry,” Trathen said in an e-mail to the Post. “Technology changes in an instant.”

Time Warner and other companies have refused to upgrade their aging networks, and Fibrant and Greenlight are the most technologically advanced systems in the state, said Christopher Mitchell, director of the Telecommunications as Commons Initiative for the Institute for Local Self-Reliance.

Mitchell called the proposed state law a “job and competitiveness killer.”

“Private cable companies refuse to overbuild each other, phone companies struggle to compete with cable speeds, and wireless lags greatly behind wired networks in offering broadband,” he said in an e-mail to the Post. “This is why communities are building fiber-optic networks and why companies like TWC fight so hard to outlaw them.”

Contact reporter Emily Ford at 704-797-4264.