RALEIGH, N.C. >> The Federal Communications Commission is considering whether to override state laws blocking city-owned broadband companies from expanding and competing with commercial Internet providers.
The FCC was scheduled to meet Thursday in Washington to consider pre-empting laws in two states that limit municipal broadband operations. City officials started the operations after their communities were overlooked by telecommunications companies deciding where to build their fastest services. City-run broadband services in Wilson, North Carolina, and Chattanooga, Tennessee, offer super-fast one gigabit-per-second Internet speeds at low cost but are barred by laws in those states from readily expanding to neighboring towns.
President Barack Obama supports FCC action to break down such laws in 19 states that the White House says stifle competition and economic development.
Supporters of those laws say they protect taxpayers from government bureaucrats botching business decisions. Municipalities that moved into broadband counter that they were at risk of being left behind economically as phone and cable companies delayed improvements.
Visual effects artist Brad Kalinoski moved to Wilson, about 50 miles east of Raleigh, specifically because it allowed him to continue working on Hollywood productions while freeing him from Southern California’s costs. He needs the Internet speed because he downloads bits of movies, TV shows and commercials; adds special effects around the actors; then shoots them back into the production cycle.
“The fiber is definitely one of the key factors that brought us here, that’s for sure. Especially for how much data we have to push, which is terabytes a day,” said Kalinoski, who was nominated in 2011 for a British Academy of Film and Television Arts award for his visual effects on the film “Black Swan.”
The average broadband speed in 2013 was 21.2 megabits per second, according to the FCC. A gigabit equals 1,000 megabits.
If the FCC acts Thursday, its decision will affect only the two cities in North Carolina and Tennessee — but could set a precedent for other communities.
Other municipalities seeking to expand broadband operations will need separate FCC action and decisions will depend on the facts of each case, said Guggenheim Securities telecom analyst Paul Gallant. Even in the 31 states without restrictions, cities and towns aren’t big competitors for broadband companies, Gallant said.
“The FCC’s move does indicate some of those other state laws might be in jeopardy,” he said. “But the details matter and it’s not obvious that every state law could be pre-empted.”