Updated Tuesday, 3:28 p.m.
A bill that would limit the ability of cities and towns to go into the cable and telecommunications business passed the N.C. House of Representatives Monday night, and now heads to the Senate. The bill exempts existing municipal systems, including MI-Connection Communications System owned by the towns of Davidson and Mooresville, but restricts the systems’ boundaries.
House Bill 129, known as the “Level Playing Field/Local Government Competition” bill, passed 81-37. House Speaker Thom Tillis (R-Cornelius), who represents north Mecklenburg including Davidson, voted for the bill, as did Rep. Grey Mills (R-Mooresville), whose district includes Mooresville and south Iredell.
The bill has the backing of Time Warner Cable and other cable companies, and is sponsored by Reps. Marilyn Avila (R-Raleigh), Becky Carney (D-Charlotte), Julia Howard (R-Mocksville), and William Wainwright (R-Havelock).
Cable industry supporters proposed the bill because they said cities and towns have unfair advantages in competing with private businesses in providing cable TV and high-speed communications services. Besides Davidson and Mooresville, several other cities and towns are already in the business, including Salisbury and Wilson.
Any cities or towns that want to enter the business in the future would have to hold public hearings and referendums before borrowing money. And although municipalities are exempt from property taxes, their communications networks would be required to make payments in lieu of taxes.
A spokeswoman for Time Warner Cable said the company was pleased that the legislation passed the House. “From the very beginning this has been about municipal and private providers playing by the same rules,” said spokeswoman Melissa Buscher. “We embrace competition, but we feel like everybody needs to play on a level playing field.”
The N.C. League of Municipalities and some cities and towns fought the bill, arguing that cities and towns should be free to offer high-speed communications, especially in places where private companies have been unwilling to offer service.
Critics said the legislation would make it practically impossible for cities and towns to provide service.
Rep. Bill Faison (D-Durham), told reporter Laura Leslie of WRAL’s @NCCapitol blog that the bill actually gives an unfair advantage to Time Warner.
“Where’s the bill to govern Time Warner?” Rep. Faison asked. “Let’s be clear about whose bill this is. This is Time Warner’s bill. You need to know who you’re doing this for.”
NEW RESTRICTIONS ON MI-CONNECTION?
MI-Connection officials have been watching the bill closely, and at the 11th hour over the weekend, it contained language that would place new restrictions on where the company operates. As of Friday, the bill appeared to disallow MI-Connection from offering service in Cornelius and Mecklenburg County.
Several amendments were offered on the House floor. But the bill as approved remains unclear about whether the company can continue to include all of current service area in its territory, according to Davidson Town Manager Leamon Brice.
“It’s unclear in the language of the bill as written, with the amendments, whether we can serve all of Cornelius, and it’s unclear how much of unincorporated Mecklenburg County we can serve,” Mr. Brice said. “It’s everyone’s understanding that MI-Connection was intended to serve those areas.”
RELATED LINKS
March 28, 2011, WRAL.com, Laura Leslie @NCCapitol blog, “Broadband bill passes House.”
N.C. General Assembly website, link to HB 129. CLICK HERE>
Had the Towns of Davidson and Mooresville chosen only to acquire the assets of Adelphia withing their jurisdictions, this proposed bill would have had little effect. However, with the assets of unincorporated Mecklenburg and Cornelius, they saw even greater “profits” on the horizon, and chose to build a system they may potentially be forced to dismantle now.
The Bill must still pass the NC Senate, and ultimately be signed by the Governor. I’m sure the lobbyists will be working hard now to “kill” the bill.
Should this bill prevail, and MI-Connection be forced to divest itself of serviced territory outside of the two Town’s limits, they may be forced to sell on a best offer price. Since the number of customers to be sold will be relatively small, the pool of available buyers will be small as well. Maybe big, bad, TWC will offer to purchase these assets in the end. Maybe Windstream will make an offer as well. Unfortunately, neither will probably be in the range of per customer cost rung up by MI-Connection Management over the pat three years.
Good thing the banks don’t have to worry – Mooreville and Davidson taxpayers will be on the hook for whatever shortfall results.
One final thought: If MI-Connection customer counts are reduced by a third or more as a result of this law passing, it will become much more difficult for it to ever become the “cash cow” envisioned by those who chose this path several years ago.
It is about time that the NC legislature took action of this sort. It is clear that municipalities should not operate telecom services (or any other services that can be performed by private enterprise). It is unfortunate that this legislation was not in place before Davidson embarked upon its disastrous and ill planned foray. Of course, this legislation is a direct result of Davidson’s egregious decisions, which we the citizens will pay for in large amounts in the years to come.
I agree with the spirit of the ‘Level Playing Field’ bill, and wish the provision to require a referendum had been in place before Davidson and Mooresville decided to get into this business, as I think our present difficulties would have been avoided.
Having said that, I get the sense that there is some ‘piling on’ happening with this bill. I don’t see the merits of restricting MI-Connection’s service territory to exclude Cornelius and other locations it presently serves. This seems punitive, and one gets the sense that there is a Time-Warner lobbyist in some back hallway in Raleigh saying to a legislator “while you’re at it, can you throw in this one other provision?”
Level the playing field, yes. Limit the playing field, no.
House Speaker Thom Tillis said Thursday that he has asked the bill’s sponsors to make sure that the bill doesn’t take away any of MI-Connection’s territory. http://davidsonnews.net/2011/03/31/rep-tillis-mi-connection-territory-wont-change/