• by Wendy Davis , March 2, 2011

A North Carolina law that would restrict municipal broadband cleared a preliminary hurdle on Wednesday when it was approved by the state's House Public Utilities committee. The matter now will go to the House Finance Committee, where it is expected to be voted on next week.

The bill -- "An act to protect jobs and investment by regulating local government competition with private business" -- would impose tough financial restrictions on cities that want to build their own fiber-to-the-home broadband networks. The law would curb cities' ability to fund broadband networks, advertise them, and prohibit cities from pricing the service below cost.

"The point is to make it incredibly difficult for community networks to operate," says muni-broadband proponent Christopher Mitchell, director of the Telecommunications as Commons Initiative for the Institute for Local Self-Reliance.

This latest bill, like three previous failed municipal broadband bills introduced in North Carolina since 2007, is touted as a job-retention measure. The theory is that incumbent providers will leave the state if they have to compete with municipalities for subscribers.

But Mitchell says that jobs haven't been lost in either Salisbury or Wilson -- two North Carolina towns that recently built high-speed fiber-optic broadband networks.

Wilson's network, Greenlight, offers broadband connections of 10 Mbps upstream and downstream, more than 80 cable channels and digital phone service for $100 a month. When it rolled out in 2008, Greenlight was the fastest and cheapest network in the area. Salisbury also recently began rolling its own fiber-to-the-home network, Fibrant, which offers connections at speeds of 15 Mbps in both directions.

In general, fiber-to-the-home networks offer broadband at faster speeds than DSL lines or cable modems. The city of Chattanooga, Tenn. recently built what might be the fastest broadband network in the country: fiber-to-the-home connections that offer minimum speeds of 30 Mbps and maximum speeds of 1 Gbps.