Latest committee vote goes Fibrant’s way 26-1

By Emily Ford

eford@salisburypost.com

RALEIGH — Salisbury scored a victory Wednesday in the State House, but the city’s battle isn’t over to remove Fibrant from new rules that would restrict selling broadband as a public utility.

By a vote of 26 to 1 — a wider margin than last week’s 15-to-13 vote — the Finance Committee agreed to exempt Salisbury from House Bill 129, dubbed “Level Playing Field.”

N.C. Rep. Harry Warren offered the amendment to carve out Salisbury and four other cities after a similar measure he proposed last week contained an error.

The city’s new lobbyist, former Raleigh Mayor Tom Fetzer, as well as Assistant City Manager Doug Paris and Warren himself worked to convince committee members the bill would harm cities with existing broadband networks.

Their efforts paid off, with only N.C. Rep. Mike Stone, R-Sanford, voting against the amendment.

Warren’s measure also expands Salisbury’s service area, allowing the city to sell Fibrant in Spencer, East Spencer, Rockwell and Granite Quarry, as well as along the 12 corridors between Salisbury and the towns.

The Rowan County Tea Party is encouraging House members to add a sunset clause to the exemption, so it would expire in three to five years and cities like Salisbury would come under any new broadband laws passed by the General Assembly.

“It was an amazing win in the David and Goliath fight,” said Mayor Pro Tem Maggie Blackwell, who spoke at the public hearing.

Salisbury has been battling the cable lobby, which says government has unfair advantages when selling broadband services and taxpayers often must bail out municipal networks.

The bill, including the carve-out for Salisbury, Wilson, Mooresville, Davidson and Morganton, was recommended by the committee 21 to 9 and is scheduled to go to the House floor today.

The issue then goes to the Senate, where the city will advocate for the same exemption.

“Today was a victory for Salisbury,” City Manager David Treme said after the committee meeting.

Also in Raleigh on the city’s behalf were Councilman Brian Miller, Director of Broadband Services Mike Crowell and Jason Parks, who manages Access 16, the local government channel on Time Warner Cable.

Robert Van Geons, executive director of RowanWorks Economic Development, spoke at the hearing.

Van Geons said since Fibrant’s launch last year, international companies have shown interest in Salisbury because of the network’s speed and flexibility. Fibrant makes Salisbury stand out from other communities in North Carolina, he said.

“The bill before you, in its current form, hurts our community and our citizens,” Van Geons said. “As written, it would handcuff our potential.”

Blackwell said Salisbury launched Fibrant after the private sector turned down the city’s request to provide broadband access for all residents.

“We entered into this market in good faith, fully complying with all existing statutes,” Blackwell said.

Changing the rules for Salisbury would endanger Fibrant’s success and the city’s ability to pay back its debt, she said. Salisbury borrowed $30 million in revenue bonds to build Fibrant.

The committee’s decision was not philosophical, Blackwell said.

“You have the power to harm our neighbors, our friends, our co-workers and our small businesses,” she said. “If this legislation causes us to fail, who will pick up the tab?”

After the hearing, Salisbury officials gathered in Warren’s office and said the most compelling comments may have come from Vance Holloman, deputy treasurer for the State and Local Government Finance Division of the N.C. Department of State Treasurer.

Holloman warned the bill would compromise the ability of cities with broadband networks to repay their debt. If the cities default on their bonds, it would have far-reaching effects, he said.

Default also “would have a detrimental impact on the ability of other units to issue debt,” including counties and schools, Holloman said.

Speakers during the hearing said the private sector won’t provide broadband access to rural areas and recounted examples of parents driving miles so their kids could do homework. Another amendment to the bill exempted rural areas where 50 percent of people don’t have access to high-speed Internet.

But sponsor N.C. Rep. Marilyn Avila (R-Wake) said her bill has nothing to do with service in rural areas.

The legislation forces cities to play by the same rules as private companies and prevents government from discriminating against industry, Avila said. Opponents say the bill gives industry an advantage.

Avila said the bill doesn’t prohibit cities from competing but requires a voter referendum to get into the business.

“I haven’t heard anybody say we don’t need rules,” she said.

N.C. Rep. Deborah Ross (D-Wake) said the legislation would worsen the digital divide in North Carolina and compound a mistake made years ago when lawmakers deregulated the industry and did not require telecommunications companies to serve rural areas.

“We are capitulating to the almighty dollar, and that is not in the public interest,” Ross said.

N.C. Rep. Paul Stam (R-Wake) argued to keep rural areas in the bill so small towns won’t face “the same financial disaster that larger towns have gotten into.”

Contact reporter Emily Ford at 704-797-4264.