Updated Monday, April 13, 2009, 2 p.m.
Updated Thursday, April 8, 2009, 6 p.m.

The chairman of the MI-Connection cable system board said Thursday he plans to write a letter to state legislators opposing a bill he says would hinder MI-Connection’s ability to compete. The so-called Level Playing Field bill, pushed by the state’s private cable TV companies, is an attempt “to make it impossible for us to do business,” chairman Evan Webster said.

“There’s not a vowel, consonant or punctuation mark in that bill which I agree with,” he said.

The MI-Connection board had been scheduled to meet Thursday at 9 a.m. to discuss and vote on a resolution opposing the proposed legislation. But the board did not have a quorum, Mr. Webster said Thursday afternoon. So he is drafting a letter to send on behalf of the system.

Senate bill 1004 and its companion House Bill 1252 would adopt new requirements and restrictions on cable and telecommunications companies owned by cities or towns.

MI-Connection is owned by Davidson and Mooresville and serves about 16,000 customers in Cornelius, Davidson, Mooresville and parts of Mecklenburg and Iredell counties.

The so-called “Level Playing Field” bill is  sponsored by Sens. David Hoyle, D-Gastonia, and Debbie Clary, R-Shelby. The bill is being pushed by the state cable TV industry association, which consists of private companies in the cable and telecommunications industry. They argue that municipal systems should not be allowed to compete against private companies and have unfair advantages.

One of the primary sponsors of the House bill is state Rep. Thom Tillis, R-Cornelius, who also represents Davidson.

At the board’s February meeting, MI-Connection’s lobbyist Bill Scoggins, of the K&L Gates firm in Raleigh, identified the bill as the major  concern in this year’s state legislative session.

He said Time Warner Cable has argued before legislators that it isn’t fair for government-owned communications companies to compete against private businesses.

This bill would require government-owned communications firms to comply with all the same laws as private firms. And it would require cities or towns to operate and conduct accounting for their cable or communications systems as separate entities, something Mooresville and Davidson already do.

The bill has been referred to the Senate Commerce Committee.

CABLE INDUSTRY SUPPORT

Brad Phillips, president of the North Carolina Cable Telecommunications Association, or NCCTA, said the industry group of  large cable companies supports Senate Bill 1004.

He noted that a clause in the bill actually would exempt existing municipal cable systems, those in place before March 1, 2009, and which start service before Sept. 1, 2009.

“We feel like its a good bill. Right now, cable companies are facing competition from a number of different sources, including satellite providers, and AT&T (the phone company),” Mr. Phillips said. “This bill is simply about competing on a level playing field.”

“If municipalities are going to get into the business, they should do so on a level playing field,” he said. He said the bill would ensure that city or town-owned systems would not have any unfair competitive advantages, such as cross-subsidies, etc. A city that owned another utility, such as an electricity or water system, for example, would not be able to use capital from that operation to build a cable system, he said.

DOCUMENTS

Read the text of Senate bill 1004, CLICK HERE>

Text of House version, bill 1253, CLICK HERE>

Below is the text of the resolution the MI-Connection board was to consider:

RESOLUTION OF THE BOARD OF DIRECTORS OF MI CONNECTION COMMUNICATIONS SYSTEM OPPOSING SENATE BILL 1004 AND RELATED LEGISLATION

WHEREAS, following extensive study and in response to significant interest from businesses, industries, consumers and public entities, and in reliance on existing law, MI-Connection Communications System was formed to make cable and broadband services via its network accessible to consumers and business throughout portions of Mecklenburg and Iredell Counties, including the Municipalities of Davidson, Cornelius, and Mooresville.

WHEREAS, MI-Connection and the municipalities it serves determined that the construction, development and operation of the Network is in the public interest and the Towns of Mooresville and Davidson have expended funds, incurred debt obligations and entered contracts to construct the Network and is currently providing communication services to residential and business customers;

WHEREAS, the Network is capable of providing better quality, reliability, and coverage than commercial providers of telecommunications services are currently providing or that they intend to provide in the service area in the foreseeable future;

WHEREAS, The Municipalities desire that their citizens have more advanced and cost-effective communications and entertainment services than are currently available by existing providers;

WHEREAS, Senate Bill 1004, “Level Playing Field Act”, has been introduced in the 2009 session of the North Carolina General Assembly, and seeks to retroactively change the law applicable to municipal broadband and fiber optics systems in a manner which will effectively prohibit MI-Connection and other municipalities from competing in the marketplace with commercial providers who have been unable or unwilling to provide high-speed broadband telecommunication services in the area;

WHEREAS, Senate Bill 1004 places additional and unnecessary burdens on local governments who have chosen to provide high-speed broadband telecommunication services to its businesses and residences and impairs MI-Connection’s ability to comply with its existing contracts, to satisfy its existing debt obligations and to provide universal service and Network build-out;

WHEREAS, Senate Bill 1004 is not designed to level the playing field, but to greatly hinder local governments from providing needed services where existing high quality internet services are non-existent and where private companies have chosen not to make the investment necessary to provide those services;

WHEREAS, the General Assembly has already established 1) rules for Public Enterprises (NCGS § 160A Article 16), 2) regulation through the Budget and Fiscal Control Act (NCGS § 159 Article 3), and oversight by the Local Government Commission (NCGS § 160A, Article 2) which apply to local governments which seek to provide an enterprise service to its community,

WHEREAS, Senate Bill 1004 is counter to the Local Development Act of 1925 as established NCGS § 158 that allows local government to aid and encourage economic development in communities throughout North Carolina and is counter to other existing law;

WHEREAS, Senate Bill 1004 is counter to the prevailing intent of federal legislation to encourage deployment of broadband services in rural areas;

WHEREAS, it is anticipated that one or more similar bills will be introduced by other legislators during the 2009 session;

WHEREAS, the development of new communications technologies, high-speed broadband networks and their expeditious deployment in all our local communities is necessary for economic development and community growth in North Carolina into the future to replace our lost textile, tobacco, furniture and manufacturing jobs.

NOW, THEREFORE, BE IT RESOLVED, that The Board of Directors of MI Connection Communications System is against the passing of Senate Bill 1004 or any similar anti-competitive legislation and urges all members of the North Carolina General Assembly to vote “NO” in Committee and if necessary on the floor of the General Assembly.

DULY ADOPTED, this the _9th day of April, 2009.

MI CONNECTION COMMUNICATIONS SYSTEM

__________________________________
Evan Webster, Chairman