Pro-Municipal Service Movement Gains Traction

Telecom Policy Report, April 13, 2005

Industry, Public-Advocacy Groups Target State Prohibitions

A groundswell movement is starting to gain momentum to counter proposed and current state legislation that bans or limits municipal government provisioning of broadband Internet access and other communications services.

Industry and public advocacy groups are rallying against what they see as a rise among state lawmakers to pass or to consider prohibitions or restrictions on such community services - allegedly advocated by powerful incumbent telephone companies and monopoly cable operators.

To date, many fights against the anti-municipal laws apparently have been left to local governments and their associations, to regional utilities, to small local businesses and to community activists. Whether their concern surrounds poor urban neighborhoods or rural geographic areas, the major common complaints are that the residential end users remain underserved or ignored by large telcos and cablecos, broadband services are nonexistent or unaffordable, and competitive-services choices are severely limited.

Such opposition has been relatively meager when stacked up against the well-heeled and highly practiced lobbying, public-profile and political- contribution activities represented among telcos and cablecos. Yet the coalescing actions of industry and public-advocacy groups suggest they are now making progress in heading off the municipal entry bills pushed by the formidable telco and cableco establishment.

"With a few exceptions, in the past there has been no or little organized opposition against these bills and even less press support," says Dave Hughes, founder and co-owner of a small ISP, Old Colorado City Communications, located in its Colorado rural namesake. Hughes, satellite-TV provider EchoStar, officials representing the Glenwood Springs and Aurora communities in Colorado and others recently testified against a municipal services-restricting proposal winding through the Colorado legislature (TPR, April 6), while testimony in favor of the bill came from Qwest Communications International and Comcast.

"Everyone against the bill said it was anti-competitive, it would impede the spread of the Internet across the state and it leave whole towns out in the cold. It's clear that cities and towns in other states are also going to be [hamstrung] by the telcos," Hughes told Telecom Policy Report. "All such a law has is the effect of making it harder on rural areas. The big communications companies don't care - they are cherry picking anyway - so why block municipal? They all see long-term threats to their stability, and they are failing, so they are trying to destroy any competition. It's just evil."

Similar arguments and frustrations have surfaced in other states where the major players have purportedly been the likes of Verizon Communications, BellSouth and SBC; charges also are that telcos and cablecos, through the American Legislative Exchange Council (ALEC), essentially drafted some proposed and current state legislation by creating model anti-municipal legislation for lawmakers to copy.

The Lobbying Tides Are Shifting

Recently, however, state consideration of bills limiting municipal broadband networks drew out a new policy statement from the High Tech Broadband Coalition (HTBC), said to represent more than 12,000 high-tech industry corporations through its six member participants: the Business Software Alliance, the Consumer Electronics Association, the Information Technology Industry Council, the National Association of Manufacturers, the Semiconductor Industry Association and the Telecommunications Industry Association.

Clearly a proponent of ubiquitous broadband deployment and a believer in private-sector investment, HTBC nevertheless said it "opposes state laws that erect explicit or de facto barriers to municipal participation," in part because government entities "may identify broadband needs that are best met through some form of governmental action or partnership with the private sector. Municipalities must be allowed to pursue broadband network solutions, and private-sector firms must not be foreclosed from choosing to invest in and partner with municipalities."

HTBC, for instance, is among the entities with "statements of support" for municipal broadband listed by a legal expert on the battle - attorney Jim Baller of the Baller Herbst Law Group. His law firm represents many communities and municipal groups against state legislations, and he actively monitors the status of such "barriers to entry" on a regular basis.

Other statements of support mentioned by Baller are from the American Public Power Association, the Fiber-To-The-Home Council, Intel, the American Electronics Association and the Public Technology Institute, but none are listed as clients.

When asked about state-level lobbying efforts, HTBC assured TPR its members are doing more than just issuing statements of policy and support. Acting as a spokesman on behalf of HTBC, Intel's David M. Horne remarked: "It is accurate to say that multiple private-sector companies, representing more than a trillion dollars in market capitalization, are supporting the efforts towards eliminating the municipal barriers in numerous states. That includes correspondences at the highest levels between senior lawmakers and private- sector executives as well as among private-sector executives as well as resources and lobbying efforts from individual companies. It is also accurate to say that every state - where such barriers are in play - is being engaged...and that the private-sector efforts are happening in partnership with local efforts."