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Media Lies About “Municipal Broadband” Bill

North Carolina media outlets and liberal groups have been lying about NC House Bill 129, claiming it would prohibit publicly owned broadband services. That’s simply not true. (The full text of the bill is available at ncleg.net/ga…).

The bill is a measure to preserve the free market, and prohibits government entities from unfairly subsidizing their product (which would ultimately eliminate corporate competitors and result in a de facto government monopoly). Does our current system have flaws? Yes, but government-run internet is not the solution. As a side note, I find it interesting that the same forces clamoring for laws to prevent ISP’s from knowing what traffics their networks are willing to push consumers into a government ISP with direct access to usage information.

First, let’s examine the claims of the bill’s opponents. The Raw Story claims, “The Republican-dominated North Carolina State Assembly this week approved a bill that would prohibit communities from upgrading their internet access.” The NC Policy Watch Blog claims, “The legislation is a bill advanced by corporate cable giants to prevent local community broadband Internet networks from developing in areas not served by the cable giants.” The former is untrue, the latter is a flat-out lie. The bill doesn’t prevent upgrades, but it does prohibit the municipality’s “company” from going into debt to finance the improvements without the explicit approval of voters. As to the latter claim, the following is a direct quote from the bill: “The provisions of G.S. 160A?340.1, 160A?340.4, and 160A?340.5 do not apply to the provision of communications service in an unserved area. …. the term “unserved area” means a geographical area in which at least fifty percent (50%) of households either have no access to high?speed Internet service or have access to high?speed Internet service only from a satellite provider.”

Unfortunately, facts are few and far between in this debate. The Winston-Salem Journal claims big telecoms are lobbying “the legislature to deny local governments the authority to establish municipal service if their residents want it.” The AP claims, “North Carolina lawmakers [are] aiming to stop cities from building their own broadband networks ….” So, what does the bill actually do?

There are three major aspects to the legislation. First, the municipal government cannot incur debt to build a network without explicit voter approval; the legislation requires a special election for this purpose. The government cannot subsidize the service with other revenues. To that end, the government is also prohibited from selling service below cost. And finally, the service must remit a payment to the municipality’s general fund equivalent to the amount in taxes, fees, and other charges that would be required if the service were run by a private company.

In other words, the bill allows municipal competition, but it requires that competition to take place on a level playing field. It strips away the unfair advantage government would have by requiring municipal broadband to pay for its own maintenance and development. Government “competitors” won’t be allowed to shove costs onto taxpayers who don’t use the service. Of course, without these subsidies, municipal broadband won’t be guaranteed success, and that’s exactly why liberal groups are so vocally opposed to this bill.

Read more in Business, Liberalism, Spending & Entitlements.

Note: At the time this article was written, the current revision of HB 129 was version 3 (H129v3). A copy of that revision is available here.