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FCC Commissioner Mignon Clyburn   (Source:

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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By mcnabney on 4/5/2011 10:50:45 AM , Rating: 2
I can see an upside of businesses making decisions that are influenced by risks to their own personal life/assets.

For example, I imagine that a lot more care would be taken when drilling for oil in the Gulf last year if the managers and boards of Transoceanic and BP necks were on the line.

Right now there are few, if any, negatives for taking big risks. Bet big and win = big bonus. Bet big and lose = regular bonus. However that loss often requires the government to come in and cleanup the mess (banking collapse, Superfund).

By Reclaimer77 on 4/5/2011 11:02:42 AM , Rating: 2
However that loss often requires the government to come in and cleanup the mess (banking collapse, Superfund).

No because you see it was the Government who came out with this "too big to fail" mantra, not business. ANY business can, and usually should, fail. Nobody has to come clean the mess up, that was just politics. Capitalism and consumerism comes built in with ways to deal with that, it's a beauty.

For example, I imagine that a lot more care would be taken when drilling for oil in the Gulf last year if the managers and boards of Transoceanic and BP necks were on the line.

This is a perfect example of what Fit was talking about. Those men weren't on the rig being lax with safety and procedures were they?

By 3DoubleD on 4/5/2011 11:47:57 AM , Rating: 1
Do you really think the government came up with "too big to fail" all on their own? It is far more likely "too big to fail" was a threat from the CEO's of the failing giants. It does not make sense that the government would voluntarily give away all that money (well maybe you think so). They were threatened by these powerful corporations, caved in fear of a worse recession/mass unemployment, and gave away all that money.

So I would say you are absolutely wrong, business came up with "too big to fail". The government just went along with it out of fear that they were right. The politics of it was whether giving away the money was better than unemployed, unhappy citizens. However, after the dust settled, I'm sure anyone with half a brain can realize that it was probably a mistake - at least we agree there.

Also, you are disillusioned if you think that true democracy and capitalism exist anymore. When corporations can run the government like they do, it's a plutocracy. For all of the good intentions of many politicians, they all must answer to their real boss - not the people - but big business. Capitalism would say they fail, democracy would say don't give these crooks more money, but the plutocracy says "too big to fail".

By 3DoubleD on 4/5/2011 1:41:05 PM , Rating: 1
I've seen several speeches made by Congress members of how Wall Street was threatening doom and placing inappropriate pressure on them. You can google the videos yourself.

I'm beginning to think that you are focusing on the slogan "too big to fail" rather than the concept. I don't know who coined the term. It could have been the media or politicians, it doesn't matter. The term is simply a description of what Wall Street was threatening the entire time: "if we fail, we are taking everyone with us".

Wall Street was threatening catastrophe, they owned the Treasury, and the 2008 elections were around the corner. I agree with your assertion of the cold, calculating masterminding. Where we differ is who the enemy was. You claim it is our elected leaders - but the bailout was defeated when it came to vote. A few backroom deals later... and the bailout was passed.

It was nothing short of brilliantly executed (surely masterminded as you said), but you can't just stick a "blame the government" sticker on this when it was Wall Street in the driver seat the whole time! If the people run the government then it is their fault for allowing Wall Street to take over the Treasury and buy the votes they need to pass the bail-out. If you vote for a government that gives corporations free reign to bet-big/lose-big and manipulate the government in any manner they please, you are signing your country and freedoms away.

"Government" has becoming a bad word in America lately, and I can see why, look what the people have created! But if the people demanded that corporate influences in government be moderated, then perhaps they wouldn't be so appalled/surprised by the decisions made.

So as I see it, I blame corporate America first and the people second. Corporate America commit the crimes (repeatedly). America buys the mantra they sell in the media (government regulation = bad, the American dream, ect.) and then place blame on the government they elected when they should be blaming the original crooks.

And I don't mean the government should be heavily regulating the markets, I mean the government should be regulating the influence of corporations on their decision making, especially regarding the freedoms and quality of life of its citizens. How could such a thing be bad?

Also, I don't think all elected representatives are worthy of their position, but my point has been that even the few that do deserve to represent us are ineffective so long as the plutocracy exists. When I read the above article, I don't think "the NC government is terrible". Instead, I think about how terrible it is that the will of the people can be subverted by corporate lobbying.

By somedude1234 on 4/5/2011 4:41:54 PM , Rating: 2
This is a perfect example of what Fit was talking about. Those men weren't on the rig being lax with safety and procedures were they?

Do you honestly believe that the front-line workers have complete control over all aspects of safety? They are the ones who die when the bean-counters sitting back at HQ decide that safety spending can be eliminated or deferred.

There is a concerted effort from the top to minimize regulatory legislation, ensure that whatever inspections end up mandated are nothing more than rubber-stamps, extend maintenance windows out as far as possible, minimize spend on safety equipment, and on and on. Any possible measure which would increase safety in exchange for more spending will be fought by management.

"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg

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