Communities Fight State Laws That Can Divide Broadband Access
- By EDWARD WYATT - The New York Times - NOV. 9, 2014
Small cities are asking the F.C.C. to use its power to override laws in 19 states that forbid municipalities (the people) to build or expand broadband networks..!
WILSON, N.C. — Jason Bissette could throw a sweet potato from his office here in eastern North Carolina, where he and his family oversee nearly 3,000 acres, to their newest barn.
But despite his wishes, Mr. Bissette cannot extend the high-speed broadband from the office to his barns, either by wire or Wi-Fi, an upgrade that would help him monitor his sweet potatoes and tobacco.
The problem is that his office sits in Wilson County, where a municipal power company has built a high-speed fiber-optic network. The barns, however, sit in Nash County. And a three-year-old state law prohibits the city of Wilson’s utility from expanding its broadband network outside its home territory.
“The technology is right there across the county line,” Mr. Bissette said on a recent afternoon, after plowing up a field of sweet potatoes for harvest. “If we could get the service, we could make sure the temperature is right, that air is circulating. It would make life a whole lot simpler.”
In North Carolina, as in 18 other states, state laws limit municipalities from building or expanding high-speed Internet service networks. The reason behind those laws, supporters say, is to limit taxpayer exposure to projects that at times fail and for which there may be little demand.
But Tom Wheeler, the Federal Communications Commission chairman, says providing access to broadband Internet is in the public interest. And for that reason, he says, the commission can override those state laws — setting off a heated debate about the federal commission’s authority over states and about whether local governments or private companies should provide the service.
Mark Cooper, research director of Consumer Federation of America, said he expected “a long and vicious fight. There is a felt need for a higher quality of service at a more reliable price. There’s a perception of market failure. If consumers were not upset, they wouldn’t be asking for it.”
At the center of the debate are Chattanooga, Tenn., and Wilson. The two cities have petitioned the commission to invalidate their state laws. A ruling from the F.C.C. is expected next year.
In Wilson, which had a population of just under 50,000 in 2013, the municipal power company also provides electricity for six surrounding eastern North Carolina counties. The city told the F.C.C. that numerous residents, government agencies, businesses and other organizations in those counties had requested its high-speed Internet service. But the state law, it said, had “the purpose and effect of prohibiting it” from offering broadband.
Will Aycock, the general manager of Greenlight, Wilson’s broadband service, said that drivers often stopped when they saw Greenlight trucks working outside the city to ask if and when the broadband service would be available in nearby areas.
Inside its current territory, about one-third of the 21,000 households subscribe to Greenlight’s broadband service. Time Warner Cable and CenturyLink also provide broadband to the county, but their services deliver slower speeds and are more expensive.
“We would probably be building tomorrow if the law changed today,” Mr. Aycock said. “We’re not saying that we’re going to build out all of eastern Carolina or even all of our service territory tomorrow. But there are areas where we’d like to go now.”
One of the potential places to expand is Pinetops, a town of 1,300 people about 20 miles northeast of Wilson. Pinetops had already been negotiating with Greenlight for broadband service when the North Carolina law went into effect in 2011.
Pinetops buys electric power from the City of Wilson, which also owns the fiber-optic network. But the main broadband option is through CenturyLink, the large telecommunications company, over the copper-wire phone network, whose speed does not match that of Wilson’s fiber-optic broadband.
“If you want to have economic development in a town like this, you’ve got to have fiber,” said Gregory Bethea, the town administrator of Pinetops. He said that while it was doubtful that the small community would attract a 300-employee factory, it might be a prime location for a call center or other service business that relied on telecommunications.
But CenturyLink says that there is not enough demand in or around Wilson for fiber-to-home broadband.
“We build our network to meet customer expectations,” said Bill Hanchey, a CenturyLink regional vice president who oversees government affairs. But customers are not clamoring for the speed provided by fiber, he said. “It does us no good to go out and build networks that customers don’t need or aren’t requesting.”
Supporters of the North Carolina law say it promotes broadband expansion, as long as private companies are put on a level playing field with public entities — being allowed the same access to telephone poles, for example.
The law is also intended to keep taxpayers from being stuck with a bill for a failing network. In North Carolina, as in many other states, the law says a broadband system cannot be subsidized with revenue from other utilities. North Carolina also requires municipalities to hold a special election to approve such projects. Wilson’s system, which was built before the law, was simply approved by its City Council.
Such elections are not always a hindrance. In Colorado, which has similar requirements, two cities and six counties approved ballot measures this month allowing for local broadband.
Several municipal systems have failed, including those in Burlington, Vt.; Monticello, Minn.; and Dunnellon and Quincy, Fla., according to an extensive report on government-owned broadband by Charles M. Davidson and Michael J. Santorelli, directors of the Advanced Communications Law & Policy Institute at New York Law School. They found that in Provo, Utah, taxpayers were left with $40 million in debt from the construction of a system after it was sold to Google for $1.
In most cities, they say, other infrastructure needs like roads and bridges are more pressing. Broadband “is not where we have the most compelling need for investment,” Mr. Davidson said in an interview. “And when government networks fail, the failure is on the backs of the people.”
But those pushing for community broadband say the level of opposition the systems provoke from cable and phone companies is evidence that they work.
“If the people,” Mr. Wheeler wrote in June, “acting through their elected local governments, want to pursue competitive community broadband, they shouldn’t be stopped by state laws promoted by cable and telephone companies that don’t want that competition.”
That the fight has landed at the F.C.C. is the result of the Telecommunications Act of 1996, in which Congress charged the commission and the states to encourage the deployment of advanced communications capabilities on a reasonable and timely basis. If deployment was found lacking, the commission was empowered to act immediately to remove barriers to infrastructure investment and to promote competition.
For the F.C.C. to invalidate the state law, it will have to overcome a United States Supreme Court precedent that seems to favor the states. In Nixon v. Missouri Municipal League, the Supreme Court ruled 8 to 1 that the Telecommunications Act allowed states to prevent municipalities from providing telecommunications services.
“I am pretty confident that if the F.C.C. pre-empts state laws, they ultimately will lose those cases,” said Randolph J. May, president of the Free State Foundation and a former associate general counsel for the F.C.C. “The Supreme Court jurisprudence is pretty clear.”
The Cities of Wilson and Chattanooga have argued that broadband service is classified as an “information service” and not a “telecommunications service.” That could mean that the Nixon ruling does not apply; instead, at issue is the section of the law that requires the commission to remove barriers to the expansion of broadband.
In the early 20th century, Wilson was the world’s largest bright-leaf tobacco market, and even now the Bissette family’s annual tobacco harvest fills 52 barns — all of them in Nash County, where the municipal broadband cannot go.
“When you’re putting the tobacco in, you need to keep the air circulating,” Mr. Bissette said. “If we could get the broadband over here, we could monitor the tobacco barns. We’d know at any point in the night if there was a problem.”
