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States With Pro-Monopoly Protectionism Laws

Phillip Dampier May 9, 2009 Community Networks, Public Policy & Gov't 3 Comments

broadbandNorth Carolina is not the only state where big telecom providers have gotten laws passed to protect their incumbency and monopoly/duopoly pricing.  From 2004, here is a list of the other states.  This may be one of the issues we may want to work on in the future.  These laws need to be repealed.  Local communities should not have their hands tied on broadband by one or two providers that only understand the word “no.”

State Barriers to Community Broadband Services

(updated December 2004)

Arkansas prohibits municipal entities from providing basic local exchange services. (Ark. Code § 23-17-409)

Florida imposes various taxes to increase the prices of telecommunications services (as distinguished from other services) sold by public entities. (Florida Statutes §§ 125.421, 166.047, 196.012, 199.183 and 212.08). Declared unconstitutional under Florida law, City of Gainesville v. Zingale, CA No. 2000-CA-00 1582 (Cir. Ct. 2d Cir., Leon Co., March 20, 2002), aff’d, Dep’t of Revenue v. City of Gainesville, No. 1D02-1582 (Dist. Ct. App., 1st Dist., Nov. 26, 2003), appeal pending in Florida Supreme Court.

Missouri bars municipalities and municipal electric utilities from providing telecommunications services or facilities, except, under certain conditions, to telecommunications carriers; does not prohibit services for internal uses, for educational, emergency and health care uses; and “Internet-type” services. (Revised Statutes of Missouri § 392.410(7)) Declared contrary to federal law, Missouri Municipal League v. FCC, 299 F.3d 949 (8th Cir., 2002), rev’d., Jeremiah Nixon, et al. v. Missouri Municipal League, et. al., No. 02-1238, 124 S.Ct. 1555 (Mar. 24, 2004).

Minnesota requires municipalities to obtain a super-majority of 65% of the voters before providing telecommunications services. (Minn. Stat. Ann. § 237.19)

Nebraska enacted legislation that prohibits any agency or political subdivision from becoming a certificated telecommunications common carrier or a permitted telecommunications contract carrier. The law allows municipals to lease dark fiber with these stipulations 1) the lessee must be a certified common carrier; 2) the lease price and profit distribution is approved by the PSC as follows: a) the lease price must not be greater than the market rate, as determined by the PSC, and b) the profit earned by the municipal is remitted to the Universal Service Fund; finally, 3) interconnection agreements must be approved by the PSC. (Legislative Bill 827, approved by the Governor May 25, 2001). LB 827 declared unlawful by Nebraska Supreme Court in Lincoln Electric System, Lincoln. v. Nebraska Public Service Commission and Nebraska Telecommunications Association, et al. S-01-286 (Neb., Jan. 10, 2003), ), cert. denied, Neb. Publ. Serv. Comm’n v. Lincoln Elec. Sys., 123 S.Ct. 2620 (U.S., 2003).

Nevada generally prohibits municipalities with populations larger than 25,000 or counties with populations of 50,000 or more from providing retail “telecommunications services,” as defined by federal law. (Nevada Statutes § 268.086, § 710.147)

Pennsylvania prohibits political subdivisions from providing advanced telecommunications and broadband services for a fee to the public unless no such services are provided by the local telephone company and the local telephone company has refused to provide such services within 14 months of a request by the political subdivision for those services at the requested data speeds (Became Law 12/1/2004, public law number not yet available).

South Carolina imposes significant restrictions and burdensome procedural and imputed-cost requirements on municipal providers of communications services. (S.C. Code § 58-9-2600)

Tennessee bans municipal provision of paging and security service and allows provision of cable, two-way video, video programming, Internet and other “like” services only upon satisfying various anti-competitive public disclosure, hearing and voting requirements that a private provider would not have to meet. (Tennessee Code Ann. § 7-52-601 et seq.)

Texas bars municipalities and municipal electric utilities from offering telecommunications services to the public either directly or indirectly through a private telecommunications provider. (Texas Utilities Code, § 54.201 et seq.)

Utah imposes burdensome procedural and accounting requirements and limits the authority of municipalities to provide retail cable television and public telecommunications services. (Utah Code Title 10 Ch 18 Sec. 101, et seq).

Virginia allows municipal electric utilities to become certificated municipal local exchange carriers and offer all communications services that their systems are capable of supporting, provided that they do not cross-subsidize services, impute costs that private sector providers would incur, and comply with numerous procedural, financing, reporting and other requirements that do not apply to the private sector. (VA Code §§ 15.2-2108, 56-265.4:4, 56-484.7:1).

Washington limits public utility districts to providing only wholesale telecommunications services. (Revised Code of Washington §54.16.330).

Wisconsin imposes burdens on municipal communications providers not imposed on nongovernmental providers. Generally, it prohibits nonsubscribers of the cable television services from paying any cable costs. Further, it requires municipalities to conduct a feasibility study and hold a public hearing prior to providing telecom, cable or internet services. It also prohibits “subsidization” of most cable and telecom services and prescribes minimum prices for telecom services. (2003 Wisconsin Act 278, effective July 1, 2004)

Municipalities and others are challenging many of these restrictions in the courts.

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Grayson Peddie
Grayson Peddie
12 years ago

In regards to this:

“Florida imposes various taxes to increase the prices of telecommunications services (as distinguished from other services) sold by public entities. (Florida Statutes §§ 125.421, 166.047, 196.012, 199.183 and 212.08). Declared unconstitutional under Florida law, City of Gainesville v. Zingale, CA No. 2000-CA-00 1582 (Cir. Ct. 2d Cir., Leon Co., March 20, 2002), aff’d, Dep’t of Revenue v. City of Gainesville, No. 1D02-1582 (Dist. Ct. App., 1st Dist., Nov. 26, 2003), appeal pending in Florida Supreme Court.”

What can I do to help? Is the Florida Supreme Court still pending the appeal?

JamesB
JamesB
12 years ago

One may want to look at who is dropping thousands into the campaigns of our state and local representatives when one discusses laws that protect monopoly businesses. The Telco’s as well as Time Warner have been very busy at throwing thousands to the same folks that submit and vote on banning competition. Here’s a short list of those getting Telco/Cable money: David W. Hoyle; Time Warner PAC – $2,250, NC Cable PAC – $1,500, Spring/Nextal PAC – $3,000, ATT PAC – $4,000 Debbie A. Clary; Embarq Employees PAC – $1,500, Ty Harrell; Time Warner PAC – $500, ATT PAC –… Read more »

Darkling
Darkling
12 years ago

Well, any lawyers in those states feel like being heroes?

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