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The battle for Laurinburg 

Big telecom wants a few pieces of the pie

Free Internet access for everyone is not going to happen without a political fight. So far, it's being fought in state legislatures. Within the next few years, Congress will have to update the Telecommunications Act it passed in 1996, a deregulation of media and technology that led to the mergers and monopolies of the past 10 years. "There hasn't been that much advocacy on this" at the national level, says Public Knowledge's Gigi Sohn, "because of a lack of federal vehicle and because most of the activity is happening in the states. But as we talk about what kind of Telecom Act of 2007 or 2008 we want, and as we discuss with the Federal Communications Commission what kind of broadband policy this country should have," the issue of public wireless could become a hot topic in Washington.

For now, the best bellwether for muni wireless possibilities in North Carolina is the case of Laurinburg, a Scotland County town of 16,000 residents that lies southeast of the Triangle. Laurinburg is one of those "last mile" communities--the last to get any new technology. In 1996, Laurinburg laid down its own fiber-optic cable in order to connect city hall with public works. Before that, it had been at the mercy of a mile-long coaxial cable connection that fritzed out during electrical storms. Back when electricity came out, the city formed its own electric company. In both cases, it was because no private company was willing to spend the money to do it.

BellSouth is the phone service for about 25 percent of the state, including Scotland County. So when Laurinburg made a deal in 2000 to lease its fiber-optic lines to the private Internet service provider School Link, BellSouth sued. The town charges School Link $2,000 a month and $350 a month to high-volume commercial subscribers for access to the cable connection; subscribers then pay School Link for Internet service.

BellSouth claimed Laurinburg should have gotten approval from the General Assembly before making the deal. The town did in fact try to get that approval, was turned down (after objection from BellSouth), then went forward anyway.

In its lawsuit, BellSouth says the deal violates a state law that specifies which services local governments can provide and which must be left to private industry. "It goes back to the idea that government has an inherent competitive advantage when it competes directly against private business," says Clifton Metcalf, BellSouth's North Carolina spokesperson, "and that's not something you want to encourage." Governments can levy taxes, he says, but they don't have to pay them, and they don't have to answer to stockholders the way private companies do.

But the North Carolina Court of Appeals ruled unanimously in January that Laurinburg was in the right. In the decision, Judge Douglas McCullough wrote that fiber-optic networks like Laurinburg's fall under the definition of a cable television system, which covers all transmission of electronic signals over wires or cables. "Moreover," the judge wrote, "just as BellSouth is able to leverage its telephone infrastructure to provide low cost DSL broadband services in the market, so too should a municipality be able to leverage its ... infrastructure." The judge said the legislature's intent was "to enable the municipality's public enterprise to grow in reasonable stride with technological advancements, as it is this advancement which marks the ever-approaching horizon of necessity," he wrote.

BellSouth has appealed the decision and is waiting to hear if the North Carolina Supreme Court will take the case.

With that possibility still up in the air, the legislature seems like the next logical step for both parties. "I think the legislature's been very clear about this," Metcalf says. "If municipalities believe there's a need to expand that list, well, municipalities talk to legislators every day." But if the ruling stands, it's possible that telecom companies like BellSouth and Verizon, the state's other major phone and DSL provider, could be the ones seeking recourse in Raleigh.

  • Big telecom wants a few pieces of the pie

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