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Government Technology on TWC Bill in North Carolina

Government Technology has run an excellent article discussing the passage of Time Warner Cable's bill in North Carolina. We couldn't pass up reposting some of the quotes used in "Municipal Broadband Networks Slammed in North Carolina."

“Essentially this bill is a cable monopoly protection bill,” said Doug Paris, assistant city manager of Salisbury, N.C., another city with its own broadband service. “It protects Time Warner Cable and ensures they will continue to do what they’ve been doing for decades, which is serving where they want to serve and not serving where they don’t want to serve.”

And though it may be tacky to quote myself, I do quite like the quote…

Christopher Mitchell, director of the Telecommunications as Commons Initiative for the Institute for Local Self-Reliance, a nonprofit economic and community development consulting group, agreed and said that there is “almost no chance” another community in North Carolina will be able to build a new broadband network under the law.

“The Legislature, in passing laws like this, shows just how out of touch they are,” Mitchell said.


 
“It’s very clear to me that North Carolina’s legislators don’t understand the difference between a slow DSL connection and a modern, reliable fiber-optic connection. They don’t understand that what Time Warner [Cable] and CenturyLink are selling isn’t helping communities be competitive in the modern era.”

I hope communities and activists around the country have taken note of the power incumbents wield and are starting to talk to elected officials to educate them and build the relationships necessary to counteract all the money in politics.

After 4 Years, TWC Buys Its North Carolina Legislation

Last year, we put together a report with graphs showing how superior the community fiber networks are compared to incumbent operators like AT&T and Time Warner Cable. When we released the report, we noted that Time Warner Cable would almost certainly push legislation in 2011 to limit local authority to choose to build locally owned networks.

Sadly, we were right. On Friday, North Carolina's Governor Perdue bowed to the pressure of TWC, CenturyLink and other companies that want to limit competition. She refused to veto a bill written by those companies, for those companies, that will ensure local businesses and residents will have fewer choices and higher bills when they connect to the Internet.

In February, we dug into TWC's H129 to explain how it threatened the future of broadband access in the Tar Heel state. It was the first of more than 30 posts we wrote since, reporting very closely on its path through a legislature effectively controlled by big-money corporations.

North Carolina has become the first state in perhaps 5-6 years to enact new barriers to prevent communities from building their own broadband networks, even when the private sector has refused to invest. Advocates of the bill pretend it exempts rural areas with little broadband access, but that section was carefully amended by lobbyists to effectively apply to no one.

Below, you'll see the video we produced that shows the real threat TWC and CenturyLink were responding to - the embarrassment of offering anemic, overpriced services compared to networks like Salisbury's Fibrant and Wilson's Greenlight.

We hope that voters will remember whether their elected officials, including Governor Perdue, represented the people and small businesses of the state or simply parroted talking points from an industry that has dumped millions of dollars into the Legislature to buy new regulation to kill the only likely source of broadband competition.

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Governor Perdue ignored more than 2,000 phone calls begging her to veto a bill she agreed could "have the effect of decreasing the number of choices available to their citizens."

Her concern?

There is a need to establish rules to prevent cities and towns from having an unfair advantage over providers in the private sector.

One might as well push for legislation to prevent ants from having an unfair advantage over children with magnifying glasses. Or for legislation protecting NFL running backs from the threat of middle-school linebackers.

While local governments may have one or two tools available to them that are not available to the private sector, massive companies will tens of billions of dollars in revenue have far more advantages than any local government. Additionally, incumbents naturally have multiple advantages over any overbuilder -- pro-competition legislation should seek to remove unfair incumbent advantages, not increase them.

Perhaps the most fascinating aspect of this rough-and-tumble battle in North Carolina was the utter lack of discussion about what communities need for economic development, quality of life, and such. Whenever Representatives from rural areas tried to talk about what their communities needed, those pushing the bill (Avila was the worst) said that discussion should be held another time -- but it was always clear that this was the one broadband bill leadership wanted to succeed.

It was quite clear that to those in the legislature supporting TWC's bill, an unreliable, overpriced connection to DSL was no different than a far more reliable and affordable connection via a next-generation fiber-optic network. And even though AT&T is cutting future investment while imposing new limits on how much of their service subscribers can use, most of the legislature effectively said "more power to them." As long as TWC and CenturyLink can cut those big campaign checks, too many elected leaders have no interest in what is really necessary for North Carolina's communities to thrive.

We must learn from this struggle and move on to find ways of expanding affordable, fast, and reliable access to the Internet to everyone. This will now be harder in North Carolina, but voters can change that in coming elections, if they so choose.

As always, anyone interested in helping to defend and increase local authority to build networks, donate to make sure we can continue this important work. For those interested in a wider look at the threat of corporate power to democracy, check out Larry Lessig's Rootstrikers.org. Only by continuing to organize can we balance the massive power of corporations like Time Warner Cable.

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RedHat VP Calls on Gov Perdue to Veto NC Anti Community Network Bill

As time runs out on the future of affordable, fast, and reliable broadband in North Carolina, more are calling on Governor Perdue to veto H129, the bill pushed by Time Warner Cable to kill local authority to invest in essential infrastructure. If Governor Perdue does nothing, the bill will become law at midnight as Friday, May 20, draws to a close.

Get involved, join the call to action from Free Press or a similar effort from Demand Progress.

In the final hours, more have called on the Governor to veto the Time Warner Monopoly Act (which we have discussed ad nauseum here), including Michael Tiemann, a vice president from Red Hat, one of the most well known Gnu/Linux distributions.

The letter was published on Rootstrikers.org, a community dedicated to fighting all the corruption in politics that allows massive companies like Time Warner Cable to buy legislation.

Dear Governor Perdue,

We are strong supporters of your leadership and your campaign, and we would like to be heard on the important issue of community broadband. I know you are not afraid to use your veto pen, and so I ask you to veto H129, a bill that will take the future away from North Carolina and put it into the pockets of cable company monopolists.

On Sunday May 15th you may have read about our latest investment in North Carolina, Manifold Recording. This was the feature story in the Arts & Living section, and the top right-hand text box on the front page. One of the most difficult and expensive line-items in this multi-million dollar project was securing a broadband link to the site in rural Chatham County. I spent more than two years begging Time Warner to sell me a service that costs 50x more than it should, and that's after I agreed to pay 100% of the installation costs for more than a mile of fiber. As part of a revised Conditional Use Permit (approved last night), I presented to the Commissioners and the Planning Board of Chatham County data on the economic investment I made, and the fact that according to the statistics from the Rural Broadband Coalition, that such an investment was worth about $300,000 to the 100+ neighbors who live along the new fiber link that I paid for.

Such heroics should not be necessary, nor should they be so costly.

I spent 10 years in Silicon Valley, and I know how quick they are to adopt new technologies that help people start and grow businesses. Manifold Recording would have remained a pipe-dream without broadband. But not everybody can afford to pay $1000/month for the slowest class of fiber broadband. Community broadband initiatives reach more people faster, at lower costs, leading to better economic development. Take it from me: had I been able to spend the time and money on community broadband that I spent in my commercial negotiations, there would be more jobs in Chatham County today.

For more information, which I strongly encourage you to have someone on staff research, please review http://www.rootstrikers.org/story/community-broadband/ . There, you will see that "as goes North Carolina, so goes the nation." We cannot afford to ruin either our own prospects for an economic recovery led by new technologies and new business nor the prospects for an America recovery.

Lessig, Doc Searls, and Others Call on Gov Perdue to Veto TWC Bill

As readers know, we have devoted a lot of effort to educating everyone about Time Warner Cable's Bill in North Carolina to kill local authority to build broadband networks. As time runs out for NC Governor Perdue to kill this terrible legislation with her veto pen, we have seen many more calls on the Governor to act on behalf of local businesses and residents rather than on behalf of TWC and CenturyLink.

We've written more on this legislation than almost any other topic (all of it available here), so we want to highlight other recent posts.

Some notable recent calls to action come from Larry Lessig's Rootstrikers:

North Carolina has one of the nation's most impressive community broadband movements. Locally owned, state of the art networks are delivering fast, cheap Internet across the state. Big telecom companies--Time Warner Cable in particular--are not happy with their success. They've spent millions on lobbying state lawmakers. Now, the North Carolina legislature has passed a bill that bans competition from community broadband networks. Under this legislation, local communities would be held hostage to the corporate broadband networks that have given America second-rate networks everywhere.

Josh Levy of Free Press wrote the following in Ars Technica:

Predictably, the big cable companies view these municipal upstarts as major threats. Companies like Time Warner Cable and CenturyLink may be unwilling to extend their networks to communities like Cedar Grove, but they don't want anyone else doing it either—such an incursion would pose a threat to North Carolina’s de facto cable duopoly. Ironically, the weapon these traditionally regulation-shy companies have turned to in order to fight the municipal broadband effort is regulation.

Doc Searls also weighed in:

Here’s a simple fact for Governor Perdue to ponder: In the U.S. today, the leading innovators in Internet build-out are cities, not phone and cable companies. Look at Chatanooga and Lafayette — two red state cities that are doing an outstanding job of building infrastructure that attracts and supports new businesses of all kinds. Both are doing what no phone or cable companies are able or willing to do. And both are succeeding in spite of massive opposition by phone and cable companies.

And finally, Rick Yuzzi from ZCorum

In my opinion, a city should be able to set up a broadband business. It’s not likely to do so unless there is a compelling need in the community. If they do, and they provide a well run and profitable service, the service will survive. If it’s poorly run and a drain on city resources, citizens can vote with their dollars, as well as at the ballot box.

FCC's Clyburn at National Town Hall at NCMR

On April 8, 2011, FCC Commissioners Clyburn and Copps spoke at the National Conference for Media Reform, held in Boston by Free Press. The moderator asked Commissioner Clyburn about her comments calling on North Carolina to cease consideration of a bill advanced by Time Warner Cable to preempt local authority to build superior broadband networks.

The entire event is available via Free Press' Conference site but we isolated the comments about local authority here.

Wally Bowen, Tim Karr: Block the Broadband Power Grab

Wally Bowen, the Founder and Executive Director for the Mountain Area Information Network in Asheville, North Carolina, wrote the following op-ed with Tim Karr of Free Press. Wally gave us permission to reprint it here.

North Carolina has a long tradition of self-help and self-reliance, from founding the nation's first public university to building Research Triangle Park. Befitting the state's rural heritage, North Carolinians routinely take self-help measures to foster economic growth and provide essential local services such as drinking water and electric power.

Statesville built the state's first municipal power system in 1889, and over the years 50 North Carolina cities and towns followed suit. In 1936, the state's first rural electric cooperative was launched in Tarboro to serve Edgecombe and Martin counties. Today, 26 nonprofit electric networks serve more than 2.5 million North Carolinians in 93 counties.

Strangely, this self-help tradition is under attack. The General Assembly just passed a bill to restrict municipalities from building and operating broadband Internet systems to attract industry and create local jobs. Although pushed by the cable and telephone lobby, similar bills were defeated in previous legislative sessions. But the influx of freshmen legislators and new leadership in both houses created an opening for the dubiously titled "Level Playing Field" bill (HB 129).

No one disputes the importance of broadband access for economic growth and job creation. That's why five cities - Wilson, Salisbury, Morganton, Davidson and Mooresville - invoked their self-help traditions to build and operate broadband systems after years of neglect from for-profit providers, which focus their investments in more affluent and densely populated areas. Not coincidentally, all five cities own and operate their own power systems or have ties to nonprofit electric cooperatives.

(While the bill does not outlaw these five municipal networks, it restricts their expansion and requires them to make annual tax payments to the state as if they were for-profit companies.)

How does a state that values independence, self-reliance and economic prosperity allow absentee-owned corporations to pass a law essentially granting two industries - cable and telephone - the power to dictate North Carolina's broadband future? This question will be moot if Gov. Beverly Perdue exercises her veto power and sends this bill where it belongs: to the dustbin of history.

However, if the bill is signed into law, its passage could embolden the cable/telco lobby to take aim at the state's many independent, nonprofit broadband networks, primarily in the most rural areas. These networks, with little fanfare or publicity, have made real progress in addressing the rural broadband crisis over the last decade.

These nonprofits include traditional rural electric and telephone cooperatives as well as more recent start-ups such as Mountain Area Information Network (MAIN) and ERC Broadband, both based in Asheville. MAIN launched in 1996 to provide dial-up Internet access via a local call in some of the region's most remote communities. Prior to this, many mountain residents had to call long-distance to reach the Internet.

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The catalyst for ERC Broadband's launch in 2003 was the possible loss of the National Climatic Data Center, which was looking to relocate to a community with more abundant and affordable broadband access. This homegrown fiber network helped keep NCDC and its high-paying jobs in Asheville. ERC's success helped spawn a second nonprofit fiber network, PANGAEA, serving Polk and Rutherford counties. Likewise, the Eastern Band of the Cherokee and a local software firm in Franklin joined forces to launch a third fiber network, BalsamWest, to serve the mountain counties west of Asheville.

This corporate assault on North Carolina's heritage of self-help and self-reliance is all the more bizarre because these out-of-state cable and telephone carriers have begun using the state's nonprofit networks, both rural and municipal, to supplement their network capacity and reduce their bandwidth costs. Common sense dictates that this corporate power-grab should end with a stroke of the governor's pen.

Commissioner Clyburn Opposes North Carolina Bill to Preempt Local Authority

I recently learned that several state legislatures are considering bills that are contrary to the deployment objectives of the Broadband Plan. For example, in North Carolina, the state legislature is currently evaluating legislation entitled ‘Level Playing Field/Local Government Competition.’ ... This piece of legislation certainly sounds goal-worthy, an innocuous proposition, but do not let the title fool you. This measure, if enacted, will not only fail to level the playing field; it will discourage municipal governments from addressing deployment in communities where the private sector has failed to meet broadband service needs. In other words, it will be a significant barrier to broadband deployment and may impede local efforts to promote economic development.

FCC Commissioner: Blocking Local Broadband Authority "'Exactly The Wrong Way to Go"

FCC Commissioner Copps spoke at the SEATOA Conference in Asheville, North Carolina, on Tuesday. He went out of his way to condemn legislation that would preempt the authority of local governments to build broadband networks, echoing a similar statement from his colleague, Commissioner Clyburn.

But he started with a discussion about the importance of broadband access to the Internet:

Getting broadband out to all our citizens is not just something that would be nice for us to do. It is something essential for us to do if we want to provide individuals the opportunity to live productive and fulfilling lives in the Twenty-first century and something equally imperative if we want our country to have a competitive edge in this challenging world.

But he moved on to highlight the importance of communities having the right to build their own networks, should they deem it necessary:

When incumbent providers cannot serve the broadband needs of some localities, local governments should be allowed--no, encouraged--to step up to the plate and ensure that their citizens are not left on the wrong side of the great divide. So it is regrettable that some states are considering, and even passing, legislation that could hinder local solutions to bring the benefits of broadband to their communities. It's exactly the wrong way to go. In this context, too, our previous infrastructure challenges must be the guide. The successful history of rural electrification, as one example, is due in no small part to municipal electric cooperatives that lit up corners of this country where investor-owned utilities had little incentive to go. Those coops turned on the lights for a lot of people! You know, our country would be a lot better off if we would learn from our past rather than try to defy or deny it.

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We strongly support his comments, while emphasizing that an incumbent that simply provides DSL or cable services must not be construed as necessarily serving the broadband needs of communities. Many of the best broadband networks in this country were built by local governments who overbuilt existing DSL and cable systems -- precisely because these last-generation networks were not providing sufficiently reliable, affordable, and fast access to the Internet for all businesses and residents.

His comments, made in North Carolina, come as H 129 sits on the Governor's desk. This was a bill pushed through the legislation by Time Warner Cable explicitly to limit the authority of local governments to build broadband networks. Its language purports to exempt rural areas without adequate service but was deceptively written in such a way as to actually exempt no areas.

If Governor Perdue does nothing, the bill will become law on May 18 20. We cannot help but fear this is the Governor's plan absent more attention, so we continue to join many others in calling for the Governor to veto this job-killing favor to massive incumbents like Time Warner Cable (who just happens to have donated over $6.3 million to North Carolina politicians over the past four years.

Contact Governor Perdue and encourage her to veto this bill.

Wally Bowen and Tim Karr just published an op-ed calling on the Governor to veto the bill:

How does a state that values independence, self-reliance and economic prosperity allow absentee-owned corporations to pass a law essentially granting two industries - cable and telephone - the power to dictate North Carolina's broadband future? This question will be moot if Gov. Beverly Perdue exercises her veto power and sends this bill where it belongs: to the dustbin of history.

Below, we have again embedded the video we created to highlight the impressive community fiber networks already operating in North Carolina, offering the best services available in the state.

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Leading Critic of Community Network in NC Revealed to Be TWC Employee

It will come as no surprise to those familiar with this space that the leading critic of MI-Connection, a cable network in North Carolina owned by local governments, has been revealed to be an employee of Time Warner Cable. Hat tip to Stop the Cap! for bringing it to our attention last night.

We have long watched massive cable/phone companies flood public meetings (both honestly and surreptitiously) with their employees to give the perception of widespread opposition to a publicly owned network. So while this is nothing new, the practice must be highlighted as something community networks should be aware of -- much like the rampant abuse of the commenting system in the Salisbury Post, where any story that mentions the community fiber network Fibrant is slammed by a few people who post under many different identities to give the impression of widespread disapproval.

MI-Connection has been plagued by problems since buying a system that was in considerably worse shape than expected, thus requiring more capital to rehab and upgrade it. An additional problem has been the image damage done by relentless critics (noted last week):

Venzon [Chairman of Board for MI-Connection] said he’s frustrated because the publicly owned company still fights an image problem.

“With the improvements we made to the system, I thought that people would be lined up out the door,” Venzon said. “I thought they’d see this as ours, this is us, and it just bugs me that we get such poor PR out there. We have not won that battle.

And now we know that a major critic of the network works for Time Warner Cable, a company vociferously opposes muni networks as a threat to their de facto monopoly. It would not be as much of a story though if he hadn't denied his employment with TWC for so long in order for his attacks on the publicly owned network to be more effective.

MI-Connection board chair John Venzon posted the information in a comment on this website Friday. He said Mr. Stevens “has been active in using our publicly available information to turn our potential customers against us and to stir up fear, uncertainty and doubt about MI-Connection while hiding his motives. He does not live in our town or service area, so he does not ‘have a dog in the fight’ unless you consider who signs his paycheck. Could I attend competitors’ regular board meetings to see what they are doing?” Mr. Venzon asked in the comment.

Mr. Venzon also noted that Mr. Stevens has used the state’s open records law, or Freedom of Information Act, to obtain copies of “every communication between the towns, the board and management. So Time Warner does in fact sit in our meetings.”

Under North Carolina Law, those records are open, and the towns have known since they bought the system in 2007 that they had to operate under public scrutiny in a way their private competitors did not. Mr. Venzon acknowledged that, but said he’s unhappy about having a Time Warner employee following the company so closely. “In corporate America, this would constitute espionage. In our situation, it is free and legal. I find it deplorable,” he wrote.

Does it matter that Mr. Stevens is a Time Warner Cable employee? As editor of DavidsonNews.net, it concerns me that Mr. Stevens hasn’t acknowledged his employment when we’ve asked, or when he has commented regularly on this site about MI-Connection.

Stop the Cap! sums it up well:

Indeed, Stevens’ efforts to hide his employer’s identity and his subsequent decision to bring his blog down after the cat was let out of the bag suggests there is nothing for Stevens or Time Warner Cable to be proud of in their relentless, often sneaky efforts to bring community-owned competition to its knees.  When it comes to protecting duopoly profits of local cable and phone companies in North Carolina, it’s total war on all fronts.

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Time Warner Cable may claim that they have no say in what employees do in their spare time, but they keep very close tabs on these networks and absolutely knew that he was leading a fight against another community's network while lying about his motives and employment. TWC regularly labelled MI-Connection a "failure" in its efforts to pass a bill that would preempt local authority to invest in networks that could compete with TWC services.

This entire fiasco serves as a reminder of the massive disadvantages communities have in building their own networks. Companies like Time Warner Cable, which measure their revenue in the tens of billions, have effectively unlimited resources to attack communities who build their own networks. Big companies attack communities in the courts, legislatures, and the media -- while communities have little power to respond in any of those venues (communities don't have the funds to fight in the Legislature or the media and struggle to justify expensive, prolonged court fights). This is the reality in every state.

And in places like North Carolina, it could get a lot worse if the Governor allows h 129 to become law. It is on her desk now and whether she signs it or lets it pass by doing nothing, big companies like Time Warner Cable will have even more advantages while communities will effectively be barred from building their own networks.

Time Warner Cable Monopoly Protection Act Heads to North Carolina Governor

It took far more longer than expected, due to the many phone calls from concerned citizens opposing it, but Time Warner Cable's investments in the North Carolina Legislature have finally paid off. A bill that will crush its only potential broadband competition in the state is sitting on the Governor's desk. We join with SEATOA, the vast majority of businesses in North Carolina who depend on broadband, and local communities in calling on the Governor to veto it.

The NC House had to approve it again due to changes made in the Senate -- including a change that absolutely gutted the rural exemption for communities who are lacking access broadband access to the Internet. Representative Avila and other sponsors have made many promises throughout this process that they never intended to hold true to.

SEATOA has long organized to preserve local authority in this matter and reported:

We made certain Rep. Avila understood that that clarification gutted the exemption and she did not care. e-NC reports that the private sector providers are permitted to report an entire Census Block as having access to internet, if only one home in the block actually has it.  In essence, North Carolina will have no "unserved areas" or communities will have to do their own door to door surveys, an expensive and monumental feat.

But what do you expect from elected officials who calls something a "level field" while bragging that they are crafting rules (such as limited service territories) that only apply to the community networks, which already operate at a disadvantage to a $19 billion a year competitor like bill author Time Warner Cable?

When the bill passed the Senate, a newspaper in Davidson noted its unequal approach that further handicapped communities:

Davidson Mayor John Woods said Tuesday MI-Connection deserves to be treated the same as private companies.

“We strongly object to the territory limits that this bill will impose on MI-Connection which are not imposed on other broadband providers. In addition, MI-Connection would remain subject to open meeting laws, which do not apply to those other providers,” he said.

Mr. Venzon also said local governments already face other rules that put them at a disadvantage to private competitors, including the requirement to operate under the N.C. Public Records Law. That “limits our board from operating as freely as a private company. Could we get access to the strategic plans, pricing strategies and competitive analysis for other broadband, cable and satellite providers? That would level the playing field,” Mr. Venzon told DavidsonNews.net.

Stop the Cap! has a call to action with more information about the final votes to pass the bill. Thanks to Representatives Faison and Luebke for standing up to the massive monied interests (chiefly Time Warner Cable and CenturyLink) that successfully bought legislation in 2011 after four years of trying.

We have provided some of the audio from the House Floor once again - it appears below this call on the Governor to veto the bill by SEATOA [pdf].

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Dear Governor Perdue:

No student in North Carolina, no patient, police officer, lawyer or business can function properly without access to reliable and affordable broadband service. Broadband is a grass-roots issue. Access to advanced broadband networks has now become essential for our citizens and businesses to participate in the global economy and access modern medicine, public safety, energy management and education. North Carolina has long been ahead of the game, with the distinguished history of its public and private sectors working together to make our state a high technology leader. It is for this reason that I write you today requesting that you veto H129 - a bill which threatens to deny large portions of our state access to reliable and affordable broadband service, bring a close to our long history of high technology excellence, and ultimately handicap the ability of our state to compete effectively in the global knowledge-based economy. H129 will bring about these changes in a number of ways:

H129 will effectively prevent our rural communities from providing their citizens and businesses broadband when the private sector will not

Half of North Carolina’s population live in our rural areas, communities where the state’s large incumbent providers have publicly stated their profit requirements prevent them from serving because of their low household densities and incomes. Yet H129 will effectively prevent our communities from providing broadband service, even in areas the private sector refuses to serve, by imposing a series of new onerous regulations on municipalities which do not apply to the private companies. H129’s sponsors claim “unserved” areas are freed from these terminal regulations, but such areas are measured one census block at a time. If 50% of the homes in a census block have access to internet, it is “served.” e-NC reports that private providers are allowed to report that all the homes in a census block have internet service if only one home in the census block has access. As such, North Carolina will have no unserved areas. Because H129 prevents our rural communities from stepping in and providing broadband service when the private sector will not, it will guarantee our rural areas are digital have-nots. (See FCC Commissioner Clyburne press release criticizing H129) For these communities, MCNC’s new fiber middle-mile network will be a bridge to nowhere.

H129 fails to fully exempt North Carolina’s most advanced fiber networks
A handful of communities in our state, including Wilson and Salisbury, have responded to the private sector’s lack of interest in building the kind of fiber networks needed for our businesses and students to globally compete, by building their own fiber to the home networks. These gigabyte networks are the most advanced in the state (and in the country). H129 seeks to shut these systems down because they compete with the large private companies (Time Warner Cable and Centurylink) who are unwilling to invest in similarly advanced technology. H129 imposes numerous regulations on municipally owned systems that would shut a private company down. While the municipally owned systems have been able to obtain a few exemptions to H129, their service areas are micro-managed by the bill in a way which will arrest their growth. Stopping a company’s ability to grow is the best way to shut it down. It will just be a matter of time.

H129 effectively prevents any communities from filling in private sector broadband gaps, even with public private partnerships

The federal government and our own General Assembly (with the Video Services Competition Act), deregulated all voice, video and broadband services, regardless of provider. Yet H129 imposes new regulations only on municipally-owned systems. These regulations include holding special elections (referendum) before a municipality funds any kind of equipment associated with constructing or repairing a new communications system, and the regulation of the rates charged by a municipality, where costs they do not incur (such as personal property tax) must be added to the price paid by customers. Such burdensome and anti-competitive regulations will effectively prevent the financing of these systems, and will prevent any private company from partnering with a North Carolina community on such a project. Private companies seeking partnerships will simply go to states where no such regulations exist, as will the private companies who sell equipment to these advanced broadband systems. The large incumbent carriers serving our state will have no incentive to upgrade their outdated infrastructure because they will be the only option in town. Jobs associated with the existence of advanced broadband will not develop; economic investments will not occur. (See Google et al. letter opposing H129)

H129 shackles the growth and innovation of our state to the decisions of a few multi-billion-dollar, out-of-state corporations
H129 sets a bad precedent of placing the interests of large out-of-state companies ahead of the interests of North Carolina businesses and residents. Time Warner Cable and Centurylink are billion dollar, multi-state companies, loyal only to their shareholders. By effectively prohibiting our local communities from building their own advanced broadband systems, the ability of our state to grow and innovate will be tied to the minimum level of technology these two companies are willing to provide in our state. The result to date, according to FCC data, is that North Carolina’s broadband service is the worst in the country (see attached FCC chart). “North Carolina grown” municipal fiber systems have developed because these local communities, who lost their tobacco economies, recognized that the only way they could survive in the global economy was to match the type of technology Asia and Europe are building. They recognized access to high capacity, affordable, broadband infrastructure is a key driver for jobs and economic growth.

H129 creates state law that is in contravention of both federal law and North Carolina’s constitution.
H129 newly subjects communications services offered only by municipalities to strict rate regulation and oversight by the NCUC (e.g., §160A-340.1(a)8-9; Section 2.(a)).This is in direct contravention to federal laws preempting the regulation of virtually all cable rates (47 U.S.C.§543(a)(1)); all cable system facilities and services (47 U.S.C. §544(a)); state utility regulation of cable systems (47 USC §541(c)); and federal laws and rules prohibiting state regulation of broadband services. H129 also subjects municipal property used for communications purposes to property tax, in direct violation of the North Carolina Constitution. (§160A-340.1(9) and §160-340.5 compared to N.C. Const Art V, §2(3)).

We have lost our tobacco, textile and manufacturing economic base. Access to advanced internet service is the last remaining hope for all our citizens, rural and urban, to compete in the global knowledge based economy using our state’s greatest resource: our ability to innovate. H129 effectively cuts off the ability of our rural communities to provide their businesses and citizens internet access when the private sector will not. It also fails to fully exempt from its onerous regulations, the most advanced municipal fiber systems in our state, with the intention to slowly and painfully put them out of business. North Carolina has a proud history of high-tech leadership in our country. Now is not the time stifle that strong technology history by regulating our North Carolina-based broadband providers for the benefit of a few out-of-state, the multi-billion dollar companies. Now is the time for the public and private sectors in our state to work together so everyone in North Carolina can obtain broadband access. That is what the citizens of North Carolina believe and expect.
Please ensure that will happen by vetoing H129.