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Broadband expansion legislation that stalled earlier this year after strong opposition from cable and telecommunications providers cleared a key N.C. House committee Thursday, but only after a long debate on the role of government in providing internet access.
House Bill 431, the FIBER NC Act, would eliminate existing state restrictions on local government investments in broadband infrastructure and put in place a system that would allow counties and municipalities to build out the infrastructure and then lease it to a private provider.
Members of the State and Local Government Committee debated for an hour and half before approving the bill in a 13-9 vote.
The majority, a mix of the committee’s Democrats and a handful of Republican legislators from rural districts, also defeated an amendment to require a local referendum on public broadband investment by the same margin.
The bill was introduced early in the session but has been opposed by the state’s main internet providers, who say it is government encroachment into private enterprise.
Lines of division
The bill’s sponsors argue there’s been little progress extending broadband access and improving service in the state’s small towns and rural areas, expanding the state’s digital divide and shutting out online advances in health care and education.
The pushback has been both twofold. Large cable and telecommunications companies object to having to compete with the public sector, in some cases the governments that regulate them. Some conservative Republicans have also aligned against the change on ideological grounds, asserting that government should have no role in providing internet access.
At Wednesday’s meeting, committee Vice Chair Rep. Michael Speciale, R-Craven, said that, unlike police and fire protection, providing internet service goes beyond the proper role of government. He said the bill would eventually lead to local governments providing their own service or getting into financial trouble.
“For all those reasons, I think that this is a bad idea and I cannot support it,” he said.
Rep. Pat McElraft, R-Carteret, said she was worried that cities and counties would take on too much debt and raise taxes to get into the internet business.
She said she believes part of what’s driving the homework gap between students who have internet at home and those who don’t is that schools have become too reliant on online work.
“I don’t think kids need to be on the internet all the time,” she said. “I think that causes a lot of our problems.”
The bill’s main sponsors, Reps. Josh Dobson, R-Avery, John Szoka, R-Cumberland, and Kevin Corbin, R-Macon, said the new version of the bill isn’t perfect but addresses many of the concerns raised by opponents.
Dobson told committee members that although the bill is still opposed by the larger internet providers, it does represent a compromise.
Rather than extend the program statewide, it now would only apply to counties in which at least 4.7 percent of households do not have broadband service along with any county with a major military installation.
Dobson told committee members that would apply to about 70 of the state’s 100 counties, taking larger markets with high levels of existing customers out of the program. He stressed repeatedly that the bill was not intended to get towns and counties into the internet business and that there would be an extensive vetting process to review government plans and contracts.
“That is not the intent of this bill,” he said. The need for the bill is clear, he said.
“Folks, what we’re doing is not working. Government is failing, the private sector is failing rural areas of our state. That’s just a fact.
“On this one, where we come from, we don’t have the luxury of ideology. We have to put internet in these rural, underserved areas of our state.”
Opposition and support
The bill drew criticism from the state’s top internet providers, who said it sets up an uneven playing field.
Brian Gregory, senior director of government affairs for Charter Spectrum, said the bill was moving in the wrong direction. Gregory said companies looking for leases would favor more densely populated areas, which would lead to just more competition in already served areas while leaving out unserved areas.
“This policy would actually harm broadband deployment throughout the state.”
But advocates for local governments disagreed.
Scott Mooneyham, director of political communications and coordination with the N.C. League of Municipalities, said the new version of the bill is an important step forward. The league and the N.C. Association of County Commissioners have said the bill will boost economic development opportunities.
“The FIBER NC Act, in its current form, would help bring better broadband service to many communities in North Carolina and, in turn, bring more educational, professional and business opportunities to the people in those communities,” Mooneyham said.
However, some business groups have joined in concerns raised by telecommunications providers that the bill sets up an unfair competition between the private and public sector.
“We ask that you oppose this bill because it places private industry in direct competition with its regulators,” Jason Soper, director of government affairs for N.C. Chamber, urged representatives at Wednesday’s meeting.
Soper said local governments and businesses would be competing over land for infrastructure under any system being set up.
What happens now
The FIBER NC Act now moves to the House Finance Committee. The House and Senate, locked in a budget standoff with Gov. Roy Cooper, are operating on a limited schedule, and a hearing on the bill has not been scheduled. The budget includes $15 million annually for the GREAT program, which provides grants to expand broadband in rural areas.
Both chambers also passed another broadband bill earlier this year by a wide margin. That bill allows electric cooperatives to lease space to providers on fiber optic lines they’ve run to operate their systems.
Mooneyham said he believes there is still enough time for the House to act this session on HB431, but that the Senate is not likely to take up the bill until next year in the short session.
Earlier reporting on broadband access in North Carolina
- May 7, 2019: “Rural broadband: A new season or more reruns?“
- August 1, 2018: “Broadband grants may spark better access, but hurdles remain“
- April 9, 2018: “Sputtering debate over NC internet access may have new urgency“
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