Fast, affordable Internet access for all.
|MUNICIPAL BROADBAND SYSTEMS
|PRIVATELY OWNED CABLE SYSTEMS
|Cable & Broadband Rates
|Municipal systems would be subject to strict State rate regulation in violation of federal law prohibiting State rate regulation.
|Private cable operators generally exempt from rate regulation under federal law
|Prices for would be set & regulated by N.C. Utilities Commission.
|Municipal providers would be prohibited from offering promotions to customers or setting prices below the cost of service.
|Prices could be artificially inflated due to 1) an effective prohibition on achieving economies of scale through the use of equipment & facilities for multiple public purposes; 2) mandatory inclusion of artificial costs in subscriber rates that have not actually been incurred; and 3) mandatory compliance with numerous regulatory requirements.
|Cities and towns would be prohibited from financing any broadband operations from any other internal financial resource or from transferring funds from one activity to another (e.g. smart grid).
|Prices unconstrained and unregulated
|Private cable operators can engage in predatory pricing by charging prices below cost in markets served by municipal providers & offering promotions such as cash rebates to keep customers from switching to municipal systems or to lure back municipal customers.
|Prices not subject to any of the new rules that would apply to municipal providers, thereby allowing 1) use of equipment & facilities for multiple business purposes; 2) unlimited rates, making possible the lowering of rates in competitive markets by increasing prices in noncompetitive markets; and 3) no obligation to comply with any new regulatory requirements that apply to municipal providers.
|Most private cable companies are large national companies and can self-finance without limit (e.g., by transferring funds from one business activity to another or from one geographic region to another.)
|Public Safety Networks
|Operation of public safety networks for which public users share costs by paying fees would be subject to the same complex and strict regulations as apply to other municipal broadband systems.
|Private cable companies would be unaffected because they have no public safety obligations and generally do not operate public safety networks.
|Federal and State Funds
|Cities and towns would be prohibited from using federal and state funds to develop or operate broadband systems, public safety networks operated on a cost-sharing basis or other.
|Private cable companies could receive federal and state grants to expand their systems.
|Subject to N.C. Utilities Commission regulation with a lengthy public hearing process before initiating service.
|Private cable operators not regulated by N.C. Utilities Commission.
|Required to publish independent annual audits, which would be available to competitors.
|Not required to publish audits or otherwise disclose information about finances to their competitors.
|Sharing Facilities with Competitors
|Required to allow competitors to use owned or leased transmission facilities and capacity on same terms as municipality (e.g. free).
|Private cable operators are not required to share.
|May not use common financing arrangements such as lease-purchase or security interest to secure financing.
|No restrictions on financing instruments.
|Local Government Commission must determine whether business plan is feasible before going to market for debt.
|Debt purchasers assess the feasibility of business plans and the market determines whether debt can be issued at a viable cost to the provider.
|Limited to within municipal boundaries, even if an outside customer (business) requests the service. Within boundaries, higher costs are required to provide service unless an area is unserved by internet access, but if 89% of households don’t have 768Kb/s still considered “served” Private cable operators need only declare their intent to serve an area in order to receive a franchise for that area.
|Private cable operators need only declare their intent to serve an area in order to receive a
|Exposure to Legal Liability & Lawsuits
|More possible lawsuits because “aggrieved party” could sue any municipal provider. Vague definitions in law make lawsuits more likely.
|Deregulation of cable industry has limited the availability of meaningful remedies.
|No municipal broadband operations are grandfathered from all requirements. Existing operations will face costs due to the bill that were not in their business plans.
|Not subject to bill requirements and given new rights to sue existing municipal competitors.