State Rep. Beverly M. Earle: Broadband law saves money for municipalities

I supported Barack Obama for president in 2008 and 2012. I still support him today. But on the issue of municipal broadband laws, I respectfully disagree with the president.

In his State of the Union address, President Obama called for states to rescind existing laws regarding municipal broadband networks (more than 20 states, including North Carolina, have such laws).

About a week later, the chairman of the Federal Communications Commission recommended that his colleagues respond to petitions from Wilson and Chattanooga, Tenn., by voting to overturn the relevant North Carolina and Tennessee laws. This is the wrong approach.

Like the president, I am concerned that too many of our residents are not connected by broadband. I want more competition in the broadband marketplace, faster speeds and lower prices for our consumers.

I agree that small businesses need access to high-speed broadband to compete in today’s global economy and that our students also must have better access to the Internet in their classrooms. Yet I voted for our state’s broadband law, which does not ban municipal networks but attempts to limit them to unserved or underserved areas.

I voted for our law because I believe that when cities are already served by private Internet Service Providers, spending millions of dollars to build their own broadband networks unnecessarily siphons vital funding away from core government programs like education, public safety and health care. It’s simple: We shouldn’t spend taxpayer money on a service provided by the private sector.

A handful of North Carolina cities have experimented with municipal broadband, and the costs to taxpayers and consumers have been enormous. A 2014 study by the New York Law School concluded taxpayers in Wilson face a significant risk if the city’s network can’t cover its costs. Specifically, the city would have to use general fund revenue to cover debt obligations, reducing the dollars available for other needs.

Our city funding streams are also at risk. Nationally, the credit ratings of several cities with municipal networks have been downgraded because their networks increased risk and taxpayer exposure. Lower debt ratings mean higher borrowing costs for future projects.

Finally, it’s unclear whether municipal broadband networks enhance competition. Besides the unique advantage of having taxpayer financing, government networks are exempt from the fees we ask private providers to pay. Given these clear subsidies, private providers are less likely to invest in our state.

North Carolina’s law was designed to guard against these problems, while also encouraging investment in unserved areas. It does not ban local-owned networks nor does it affect the municipal networks that were up and running before the law was passed.

At the General Assembly, my colleagues and I are committed to making decisions we believe to be in the best interest of North Carolina. I hope President Obama will reconsider his position and that the FCC commissioners will vote to preserve our state law. There are other options for increasing broadband availability.

The writer, a Democrat, represents North Carolina District 101.

This story was originally published April 16, 2015 at 6:45 PM with the headline "State Rep. Beverly M. Earle: Broadband law saves money for municipalities."