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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 sviola on 4/5/2011 11:32:33 AM , Rating: 2
99.99% of the time, the owners of a company aren't the ones who design something that ends up hurting someone. So why should they be personally liable for that? Or even the engineer that made the mistake that caused the problem? Should someone go to jail because a mistake was made? No. The corporation handles the liability.

Well, I have to disagree with you. When a business owner or a manager decides to cut corners to save money, they should be made responsible for their actions. A few years ago this happened in Brazil:

a construction company that the owner decide to use beach sand in the mixing of concrete and the engineer was negligent and made some errors of calculation; both led to the building falling and killing dozens of people and many more loosing their homes and belongings.

They were prosecuted and found guilty. The engineer lost his diploma and was arrested (think he got 5 years in jail), while the owner of the company managed to keep out of prison by making tons of appeals (unfortunately, he passed away before the last appeal was judged), but had some of his possessions (I think 2 hotels he owned) seized and sold in order to compensate the victims.

By Reclaimer77 on 4/5/2011 11:38:22 AM , Rating: 2
That's criminal negligence though. A bit different. People died.

By FITCamaro on 4/5/2011 3:52:44 PM , Rating: 2
As Reclaimer said, criminal.

Corporations don't protect people from knowingly choosing to sacrifice safety. But if an error in a line of code of an ABS system resulted in someone's death, should the engineer be sent to jail for missing it? How about the test team that missed it? It was an honest mistake.

Furthermore the vast majority of corporate lawsuits are frivolous attempts at getting money due to someone's stupidity. Imagine if all those were levied against a person instead of the corporation.

"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer

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