BY DANIEL GOLDBERG : The Herald-Sun
dgoldberg@heraldsun.com
Apr 14, 2009

CHAPEL HILL -- For the second time in two years,North Carolina municipalities are being urged to push back againstlegislation that would make it more difficult for local governments toprovide cable and broadband services.

The Chapel Hill Town Council will receive a citizen petition onWednesday that asks for a resolution in opposition to Senate Bill 1004,the so-called "Level Playing Field" bill. Small business owner BrianRussell, the petitioner, believes that the bill essentially preventsmunicipalities from providing broadband services and stifles economicdevelopment.

"As of February 2009 unemployment rates in North Carolina are at 10.7percent," Russell wrote. "That is the fourth highest rate in thecountry. Senate Bill 1004 could make it worse and prevent our state'seconomy from improving. It would do this by making it very difficult touse money from the Federal economic stimulus package intended forpublic broadband development. Please think about the unemployed andoppose all legislation that would harm them. The people of Chapel Hillneed new jobs!"

Senate Bill 1004 touts equal treatment for local governments andcommunications companies. According to advocates of the legislation,local governments enjoy a competitive advantage because they can borrowmoney to start their communications networks more cheaply than privateenterprises. Companies like Time Warner Cable also think it's unfairthat governments can "cross subsidize" broadband and cable servicesusing money from other municipal revenues. A similar bill was defeatedin 2007.

"It's taxpayer money," said Melissa Buscher, Time Warner Cable'sdirector of media relations. "We have to stand on our own and we feelthat everybody else should also."

The new legislation would forbid municipalities from using otherrevenues to finance cable, telephone or Internet services. Strictfinancial requirements and other fees also would be tacked on tomunicipal communications networks.

"It's not discouraging a municipality from entering the business, butif they do, they should have to operate on the same playing field thatwe do," Buscher said.

Critics of the bill believe it caters to corporations and their lobbyists.

"It's not about leveling the playing field," Russell said. "It's about eliminating the competition altogether."

Chapel Hill Mayor Kevin Foy said some cities have determined that thereare sound business reasons for going into the communications business.The city of Wilson's Greenlight network offers customers lower ratesthan in surrounding communities by going head-to-head with Time WarnerCable. Foy said that municipality also offered its fast,competitively-priced network as an incentive to keep one of its biggestemployers, BB&T, in town.

"I don't think the town of Chapel Hill has looked closely at what thoserationales would be for us, but we sure wouldn't want to be prohibitedfrom doing it in the future," Foy said.

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