RALEIGH — Gov. Bev Perdue on Friday criticized a bill that restricts municipalities from building and operating broadband Internet systems, but said she would not use her veto power to block it.

Instead, she urged the legislature to reconsider the issue, which had been championed by the cable and telephone lobby.

"I will neither sign nor veto this bill," Perdue said in a statement. "Instead, I call on the General Assembly to revisit this issue and adopt rules that not only promote fairness but also allow for the greatest number of high quality and affordable broadband options for consumers."

If a governor does not veto a bill, it automatically becomes law. By not signing it, Perdue is symbolically signaling her displeasure.

The governor said there is a need to establish rules to prevent cities and towns from having an unfair advantage over private companies. But she said she was concerned the bill would decrease the number of choices available to consumers.

The bill would require towns and cities that set up broadband systems to hold public hearings, financially separate their operations from all other government operations, and bar them from offering below cost services. They also couldn't borrow money for the project without voter approval in a referendum.

The five cities that now offer the service - Wilson, Salisbury, Morganton, Davidson, and Mooresville - would be largely exempt from the bill's provisions.

The measure was opposed by the N.C. League of Municipalities, which argued that towns in less populated areas should be able to obtain better broadband services than private companies are willing to offer in order to attract industry.

Time-Warner Cable, which has been pushing for the legislation since 2005, has argued that it ought not to face competition from tax-paid sources.

Time-Warner's political action committee has contributed at least $214,000 to state candidates since 2008, most of them state legislative candidates, according to campaign finance records.

It contributed $3,000 to Perdue's gubernatorial campaign in 2008. Time-Warner also contributed $10,000 to the Democratic Governor's Association fundraising event that Perdue hosted last April at the Umstead Hotel.

Researcher David Raynor contributed to this report.

rob.christensen@ newsobserver.com or 919-829-4532