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FCC Commissioner Mignon Clyburn   (Source: nab.org)

North Carolina is considering a proposal that would allow a state panel to kill a voter-approved municipal internet service.  (Source: Reuters)
Clyburn is no fan of H.129

As Bill H.129 [PDF] continues to roll on to North Carolina's State Senate Judiciary Committee, having passed the house, controversy surrounding the measure is growing.  

Ostensibly the bill is designed to provide a "level playing field" between local government municipal service projects and local private sector.  However, the bill contains redundant language and sneaks in some provisions that could be the death of municipal services.  

Namely, it makes it much harder to fund such services.  And it hands complete control of whether to ban or approve new voter-ratified services to a state board -- at a time when reportedly state officials have been accepting campaign donations from local telecom monopolists.

The U.S. Federal Communications Commissioner Mignon Clyburn on Monday weighed in [PDF] to the debate, blasting the measure.  Similar to our analysis, she asserts that the bill's provisions first seem worthwhile/innocuous, but the actual language allows for disturbing possibilities.  She states, "This piece of legislation certainly sounds goal-worthy, an innocuous proposition, but do not let the title fool you."

She goes on to write:

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.

I remain concerned that when cities and local governments are prohibited from investing directly in their own broadband networks, citizens may be denied the opportunity to connect with their nation and improve their lives. Local economies will suffer as a result, and the communities' ability to effectively address education, health, public safety, and other social issues will be severely hampered.

At this point, the FCC is still trying to scrounge up spectrum for an auction tentatively slotted for 2012.  That auction might allow for the creation of a national broadband offering.  However, even the FCC seemingly concedes that a national offering could be less efficient than a local-based one, backed by the community.

At the root of the issue is the lack of competition in the market.  High costs are certainly one barrier to entry.  And the tendency of state legislators/courts to cast a blind eye on anticompetitive tactics from their local telecom only worsens the matter.

Arkansas and South Carolina are reportedly considering measures similar to North Carolina's.

Some provisions of the NC bill certainly seem valid -- for example that the projects need to be approved by local voters in a special election and that town hall meetings must be held before hand.

However, other provisions are baffling.  For example, the services are banned from exercising the same pricing methodology as their corporate "competitors".  In that regard, if anything the bill creates an unlevel playing field.

Further, even if voters approve of it, cities are disallowed from using much of their funds to finance the project.  And there are restrictions on their ability to seek loans from the private sector.  To make matters worse, they have to pay themselves a tax on the service, which they cannot reinvest into improving the service.

And then there's the issue of the state panel created by NC's pending legislation.  That panel would be granted the power to override voters in a municipality and kill outright or otherwise stall to death broadband projects.  At a time when telecoms are pouring thousands in campaign donations to state senators and representatives in an effort to preserve their monopolies/duopolies, this certainly seems like a dangerous allowance.



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RE: good
By Kurz on 4/5/2011 9:56:00 AM , Rating: 2
The only thing is I don't want to see an ISP that requires Taxes to stay afloat. If they can provide the same service using 'subscriber funds only' to pay down their loans and service maintenance, sure I am all for it.


RE: good
By mcnabney on 4/5/2011 11:08:48 AM , Rating: 3
Many of these ISPs got taxpayer guaranteed loans to build.

So the business gets to keep all of the profits, but if the ISP screws-up the taxpayer is stuck with the bad loan.

So you are already supporting them.


RE: good
By Jalek on 4/5/2011 8:05:34 PM , Rating: 2
That's acceptable socialism, if it benefits the already-wealthy then it's not considered a handout.

Don't ask me, I don't make these rules.


RE: good
By tastyratz on 4/5/2011 11:47:43 AM , Rating: 4
I don't want to see a new tax burden on taxpayers either, but these municiple projects are VOTED on and done at the town level. I don't really care if they vote to accrue the funds to build statues out of gold. If the taxpayers of that town voted and agreed to do so that is their RIGHT as voters to spend the money that way.

Who is the state to remove their right to spend their money as they vote to see fit? This is not a state wide or nation wide broadband plan, just allowing towns to respect voter wishes.


RE: good
By Uncle on 4/5/2011 8:14:38 PM , Rating: 2
What are you doing here. Your too logical and intelligent. Its a wonder you haven't been flamed.


RE: good
By YashBudini on 4/5/2011 9:02:50 PM , Rating: 2
Day ain't over yet.


RE: good
By Kurz on 4/6/2011 10:13:02 AM , Rating: 2
He is forgetting the orginial structure of this country.
The majority doesn't rule.


RE: good
By Kurz on 4/6/2011 10:07:10 AM , Rating: 2
There is still a minority of tax payers who don't want to foot the bill. This isn't a democracy... Its a Constitutional republic.


RE: good
By tastyratz on 4/6/2011 11:23:44 AM , Rating: 2
And the constitution has no provisions for municiple water OR internet, yet nobody questions one utility over the other. Someone can source their own well water just as their own internet service provider. If you don't want the service, vote. If you lose... too bad. We vote for a reason to make the majority happy. Any time there is a majority there will be an equally unhappy minority.

You think too federal and lose the context of this article. This is at the municiple level, where you are more likely to see best interest actually acted on... Remember those times? I think they predated the lobbyist.


RE: good
By Kurz on 4/6/2011 12:37:13 PM , Rating: 2
There is a stark difference between a luxury service and necessity service. Pumbing has many societial benefits like keeping your populous healthy.

So we vote to keep the majority happy? What happened back in the day when time and time again the majority voted to keep those of a different race down (Jim Crow law). Or when we vote to force those who make a higher income pay higher taxes. Or we vote to put in a Socialized healthcare that happens to be failing in every country its been tried.

Municiple level is where the most damage occurs!
It happens everyday from Basketball poles being ripped out from someone's property (Delaware). From a local business forced to stay closed for 6 months waiting for local government to approve a tear down and rebuild on a private property. Or even famously the protectionist schemes that local governments give to Cable Companies to give them monopoly control of a market. No Municiple level is just as corrupt or more so than the Federal government.


RE: good
By tastyratz on 4/6/2011 2:33:45 PM , Rating: 2
Municipal level is inherently more transparent at the more simplistic level. Chances are there are far less people managing, far lower bribes involved, and you might even know some of those people who are elected personally.
Internet to me is as much if not more of a basic service as telephone. Your porn is luxury, your ability to utilize alternative methods to higher education, expand your business, seek employment, and research current events is a utility. A luxury use of a utility (think calling your friends) vs an essential use (think 911) do not condone an essential utility to a luxury.

Don't forget the compelling argument these utilities must make to build to convince a majority tax vote. It generally means loans to self sufficiency and a lower priced option.
Those large companies that get monopoly right contracts do so under provision of bringing an otherwise non existent service into the area. A monopoly is better than nothing.

The availability of affordable local internet services is good for the local economy and as a result the taxpayers pockets. To argument against if you choose not to use it is synonymous to paying for the school system even if you do not have a child. In the end you still benefit from a locally educated populace by means of reduced crime and economic impact.

This is not an argument to race, or standards of building approval (which exist to protect everyone). It is in fact a completely different plane. I would compare this to a bill where the local town wants to build a library but borders and barnes & noble lobbied a bill banning them from doin so.


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