High-speed Internet systems owned by local governments wouldn’t be able to offer lower rates than private companies in the same market under legislation gaining opposition from mayors and commissioners.
State Senate Majority Leader Chip Rogers said he introduced Senate Bill 313 on Monday to protect taxpayers and encourage private investment.
A dozen cities and a handful of counties have launched cable-television networks that also provide connection to the Internet. Few have competing private companies, but the telecommunications industry complains that governments have an unfair advantage that prevents them from trying to compete.
Under Rogers’ bill, before a city or county government could launch an Internet system, it would have to take bids from private providers, hold public hearings and let voters decide to go forward or not.
Government-run systems would pay the same taxes that private companies pay.
Crews in Columbia County are installing 220 miles of fiber-optic lines and building wireless-communication towers as part of an $18 million project, with $13.5 million coming from a federal stimulus grant, to make broadband services accessible to all areas of the county. The installation is set to conclude this year with Internet services possibly available by this time next year.
County officials have said they don’t intend to become a residential Internet service provider. They hope to lease the use of their fiber-optic network to such providers as Comcast and Knology.
Officials plan to use the broadband network, though, as an economic incentive by offering cheap, possibly even free, access to the broadband lines, County Administrator Scott Johnson said last week.
County officials hope such a tool, along with direct access to a global broadband network in Atlanta, might lure high-tech firms to expand or move to the county.
Rogers said the bill’s goal is to erase governments’ advantages when they compete against private companies.
“This bill will allow for robust competition in the communication marketplace and encourage continued economic growth throughout our state,” said Rogers, R-Woodstock. “By extending our long-standing commitment to policies that encourage private investment and market-driven competition, we are putting the needs of our citizens above those of government.”
He said his plan would not keep government-run systems from claiming any federal money available for extending Internet access.
“The bill does not prohibit a local government from building a network, only requires if they compete with private sector they must play by the same rules and must have approval by local voters,” he said.
Columbia County agreed in March 2010 to spend at least $2.7 million in local money as a 20 percent match to accept the stimulus grant from the Broadband Technology Opportunity Program. So far, the county has set aside $4.5 million in 1-cent sales taxes for the Broadband Utility Department.
Local officials plan to fight the bill.
“We feel like broadband is key to economic development,” said Amy Henderson, the spokeswoman for the Georgia Municipal Association. “Where it was put in, private entities weren’t willing to go there.”
Though governments might have some tax advantages, private companies don’t have to open all their records to the public the way cities and counties must, she said. Plus, a large telecom company could use profits made in one part of the state to subsidize operations in another, while local governments are limited to doing business in one location.
Similar bills are under consideration in other states as telecom companies mount a concerted effort to reach the few areas with government-run systems.
Henderson said the telecom companies are trying to avoid price competition from the governments that benefits consumers.
The telecom companies have beefed up their lobbying forces this legislative session. Many lawmakers have received campaign contributions from them, including Rogers, who rejects any suggestion that they might have motivated him.
“For someone to infer that my support for the private sector over the public sector is somehow tied to campaign support is ignorant to my entire 10-year legislative record,” he said.