Cities to Fight Shackles on Provision of Broadband Services
Cities are bracing for a fresh push by telephone and cable companies for state legislation to keep them out of the broadband business, even as they prepare to deal with the regulatory implications of Bell efforts to enter video markets. Bills restricting or placing conditions on municipal entry have cropped up in Ind., Ore., Neb. and Ohio, said Desmarie Mosco, an American Public Power Assn. (APPA) lobbyist. Similar legislation is expected in Fla. and Ia., she said. Interestingly, the Bells and cable haven’t always seen eye to eye on legislation to limit cities’ ability to provide broadband services, but lawyers for cities said it was too early to say whether that results from Bells’ video plans.
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Municipal utilities expect many more bills this year because the telephone and cable companies have been emboldened by last year’s Supreme Court decision involving Mo., Mosco said. The court ruled in the Mo. Municipal League case that Sec. 253 of the Telecom Act didn’t affect states’ power to restrict cities from offering telecom services. The section provides authority to preempt state and local laws that bar entry into the telecom business. Fourteen states have some sort of municipal barrier to entry, Mosco said, but only 3 were flat prohibitions. While many of these states follow the federal definition of telecom, some use the term more broadly to embrace other offerings such as broadband, she added.
Attorney James Baller, who represented cities in the Mo. case before the Supreme Court, said bills emerging this year are increasingly targeting broadband offerings of cities rather than just telecom or cable services. That represents a shift from telecom-related bills in years past, he added. He didn’t agree that the Supreme Court decision was spurring more bills this year. Even if the court had ruled in favor of the cities, he said, it wouldn’t necessarily have stopped the push. That was because this year’s bills were of a different format than the kind addressed before the court. The industry has moved away from flat-out prohibitions to “conditional permissions,” he added: “The conditions themselves are often essentially prohibitions, but at least they claim this isn’t the kind of prohibition that the Supreme Court considered in the Missouri case.”
Though none of the bills single out broadband over power lines, they will affect municipal utilities’ ability to provide BPL, said Brett Kilbourne, regulatory dir. of the United Power Line Council (UPLC). Many of the bills make it “virtually impossible,” he said: Incumbents “are smart enough now not to write those things as strict prohibitions, but they put in so many different restrictions that as a practical matter they pretty much preclude municipalities.” He said there’s a “lot of activity” on BPL among municipal utilities, and as these bills crop up “they interfere with the progress that’s going on there right now in terms of negotiations.” So legislation has the “practical effect” of keeping municipalities from going forward, he added. He said UPLC’s lobbying efforts so far has been at the federal level, “but we are focusing on this issue” in the states now.
APPA’s Mosco said public power utilities are also preparing to counter possible industry efforts to get municipal restrictions inserted at the federal level as Congress reopens the Telecom Act. Baller predicted that industry efforts to keep out municipalities would fail. “There is such a pent-up demand that it will push its way out and it’s ultimately a losing battle for the incumbents. Municipalities are looking at various models, including partnerships with the private sector, to provide broadband service, he said. One such effort is in South Bend, Ind., where 7 institutions, including the U. of Notre Dame, Memorial Hospital and Robert Bosch Corp., have committed to invest $2.3 million in the city-owned fiber optic network.
SBC welcomes competition, but govt. provision of telecom and broadband services raises important policy implications because it means “a gatekeeper for market entry” is entering the market itself, a spokesman said. SBC is backing the Ind. bill, HB-1148, while cable has chosen to remain neutral. A Comcast spokeswoman said cable opposes “the notion of government competing with the private industry, [but] we do not see a need for this bill. As long as Comcast continues to introduce new technologies, provides quality customer service, and invests in the communities we serve, we cannot imagine why a government would feel a need to compete with us.”
Meanwhile, a recent meeting between representatives of cities and the NCTA touched off speculation that efforts were on for a joint fight against the Verizon- sponsored bill in Va., HB-2354. NCTA declined to comment on the meeting. Asked if the meeting had to do with the Verizon bill, NATOA Exec. Dir. Libby Beaty said, “I wouldn’t characterize it that way.” HB-2354 would essentially do away with local franchising and move the process to the state level. “The NCTA meets with a variety of cable industry and outside the industry groups on a wide variety of issues and we don’t comment on every meeting we hold,” a spokesman said.
As for whether cities were planning to form a coalition with cable to fight Va.-like bills, Beaty said the fact that local govts. might agree with an industry on an issue doesn’t “equate to a coalition.” There’s no understanding yet with cable to work together, she said. As for whether there would be one soon, she said she wouldn’t be able to say “at this point.” “We had one of numerous conversations” as part of a long-standing relationship with NCTA, said Marilyn Mohrmman-Gillis, NLC dir.-policy & federal regulations: “We didn’t meet on the Verizon bill.” She said NLC has traditionally worked with the NCTA on a number of local govt. issues. Asked about a possible coalition with the cable industry, Mohrmman- Gillis said the NLC takes part in a “vast number” of coalitions on the “industry level and the state and local government level.” She and her staff were always talking with people, she said, and there was nothing “new, unusual, or different” about the NCTA meeting. The NLC is in regular communication with the industry, including NCTA and the Bells, she added.
The NCTA has been making overtures to the National Assn. of Telecom Officers & Advisors (NATOA) for support to fight the Verizon bill, NATOA Pres. Coraile Wilson told us. “We don’t comment on private discussions with outside groups or inside groups,” the NCTA spokesman said. She said the problem for cities in forging a coalition with cable is that “we are not sure how far to trust them.” While the 2 agreed on issues in some areas or had some common issues, “we also see them behind legislation” that restricts municipal entry. “So they kind of give with one hand and take with another. We are cautious in working with the cable industry.”
Wilson agreed it made sense to work with cable to defeat the Va. bill that would undermine the authority of local govts. “NATOA has taken a firm stand on the bill and we have been involved behind the scenes,” she added. NATOA welcomed NCTA’s opposition to the legislation, she said. But that didn’t mean “we are going to get in bed with the NCTA and hold hands and say we are best buddies now. That may be going a little too far.” As for Comcast taking a neutral position on an SBC-supported bill in Ind. seeking to restrict municipal broadband entry, Wilson said: “That kind of thing helps. It would help even more if they would oppose it.”