By Gary D. Robertson – The Associated Press

RALEIGH, N.C. – The General Assembly on Thursday finished writing rules governing North Carolina municipalities that want to offer broadband services, apparently settling a long fight over how and when towns and cities can build networks competing with traditional telecommunications firms.

The House voted 84-32 to accept Senate changes to a package that now will head to Gov. Bev Perdue for her signature. She hasn’t spoken against the bill. She’ll review it once it comes to her desk, Perdue spokeswoman Chris Mackey said.

Big telecom firms have argued that the handful of local governments that now offer such services have an unfair advantage and put taxpayers on the hook should they fail. Municipal leaders counter that it is the big companies who have let down their citizens by failing to offer high-speed Internet because they’ve decided it will cut into profits.

The bill would require towns and cities that want to enter the business to hold public hearings on their plans, segregate financially the business from other government operations, and bar them from offering services below cost. They also couldn’t borrow money for the project without voter approval in a referendum and must make payments equal to their tax bills as if they owned a private provider.

Five cities that offer the service – Wilson, Salisbury, Morganton, Davidson and Mooresville – would be exempt from most of the bill’s provisions, although their coverage areas would be limited. The five had a combined $148 million in debt not approved by voters used to build their fiber-optic networks that currently serve about 43,000 households, according to a financial analysis of the bill by legislative staff members.

Towns ‘damaged’

“Municipal core services are being damaged by this particular approach and getting out into the business world and committing the responsibility for that success or failure to a very finite group of people,” said Rep. Marilyn Avila, R-Wake, the bill’s chief sponsor.

The N.C. League of Municipalities opposed the bill, which it and other opponents said was designed specifically to help Time Warner Cable even though it doesn’t offer more robust services in less-populated areas. For example, Greenlight, Wilson’s municipal broadband network started in 2008, offers Internet service of up to 100 megabits per second. Time Warner Cable only recently announced it would soon begin offering speeds of 50 megabits per second in Wilson.

‘Step backward’

“North Carolina just took a huge step backward in helping our citizens, businesses and students have access to high-quality broadband,” league lobbyist Kelli Kukura wrote in email. “Our citizens should be outraged at the ability of Time Warner to simply snatch their opportunity to be served. North Carolina will pay the price.”

Time Warner Cable government relations Vice President Jack Stanley said the bill had strong bipartisan support and was backed by many pro-business organizations.

Cable and phone companies have been urging the General Assembly to restrict municipal broadband services since a 2005 state appeals court ruling upheld the right of towns and cities to offer broadband services to residents.

“This is a good day for taxpayers of this state who, before now, have not had a say in whether their cities incur debt for the purpose of providing services already being provided by private business,” said Marcus Trathen, an attorney representing the N.C. Cable Telecommunications Association.

The bill does allow additional exceptions from the new rules for cities that can show that more than 50 percent of their households have no access to high-speed Internet access or only access from a satellite provider.

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