Bill limiting municipal broadband faces Senate test

Published 12:00 am Wednesday, March 30, 2011

By Emily Ford
SALISBURY — Salisbury’s exemption from a bill that restricts city-owned broadband networks like Fibrant was intact Monday night when the N.C. House approved the legislation.
But the city could face a tougher fight in the N.C. Senate.
Sen. Andrew Brock, R-Davie, said several senators have expressed reservations about full exemption for Salisbury and four other cities with broadband networks already up and running.
The proposed law would prevent cities from offering broadband services at below cost or using funds from other city utilities. It also would require voter approval before cities borrow money to build or buy a broadband network.
Brock said he doesn’t want to see Salisbury get hurt, but his top priority is the taxpayers who would end up footing the bill if Fibrant fails.
“There are some headwinds,” Brock said. “There are some senators who are not too enthusiastic for giving the full exemption to … all the cities.”
Salisbury and other municipalities that won exemption in the House “will have some issues before final passage in the Senate,” he said.
City officials, however, said they feel confident about maintaining their exemption in the Senate.
“I’m not worried,” Assistant City Manager Doug Paris said.
The amendment that protects Salisbury and other cities, which N.C. Rep. Harry Warren (R-Rowan) introduced, had broad support in a House committee where it was approved 26 to 1.
Brock said he hasn’t yet studied the bill, which may not come up in the Judiciary I Committee for weeks. When he does, Brock said, he wants to know more about how Salisbury received the blessing of the N.C. Local Government Commission to launch Fibrant.
“We are happy to provide Senator Brock with any documents he need to make sure he’s fully satisfied,” Paris said.
While Brock said he has reservations about cities entering the broadband business and competing with incumbent providers, Salisbury can’t go back now.
“I don’t like it, but I will support the city as much as I can to see they don’t get hurt,” he said.
Brock said he’s concerned that Warren’s amendment allows Salisbury to sell Fibrant in Spencer, East Spencer, Rockwell and Granite Quarry and wants to hear from those towns about their interest in Fibrant.
The towns may not want Salisbury running lines for Fibrant if it means a utility subsidized by taxpayers will compete with private industry, he said.
Salisbury officials said they expect an exemption but will continue to lobby senators, attend committee meetings and testify at public hearings.
“We don’t take anything for granted,” Mayor Susan Kluttz said. “We will be on top of it.”
The city will retain its new lobbyist, former Raleigh Mayor Tom Fetzer, throughout the Senate session. The city pays Fetzer $5,000 per month.
The Senate Judiciary I Committee will give the bill “a good going over,” Brock said.
“There are lots of attorneys on that committee, good attorneys, Democrats and Republicans, and they will be picking apart bills word by word,” he said.
Brock said senators are talking about the broadband sunset clause suggested by the Rowan County Tea Party, which would have the exemption for Salisbury and other cities expire after three to five years.
He’s concerned that would be too short, not allowing the cities to fully establish their systems and pay off their debt.
“For some of us that believe in free enterprise, we are put in a tough box,” Brock said. “We had cities that went out on a limb and we want to make sure we don’t saw off the limb.
“I just wish, when they borrowed this money, they would have done it with a vote of the people.”
Salisbury borrowed $30 million in bonds to build Fibrant without voter approval, which is legal unless the bill dubbed “Level Playing Field” becomes law.
Contact reporter Emily Ford at 704-797-4264.

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