South Carolina's H3508 has [no-glossary]passed[/no-glossary] the legislature, been signed by Governor Nikki R. Haley, and has revoked local authority to build the broadband networks they need to create new jobs. Last week, we noted some of the coverage about the bill. After reviewing the language of the bill, we are astonished at how far the Governor and the South Carolina Legislature have gone to protect AT&T's monopoly, to the detriment of the many businesses and citizens who desperately need better access to the Internet -- whether to be more productive, competitive, or just take advantage of educational opportunities.

South Carolina is near the bottom of adoption rate in the U.S. and has a higher than average number of residents living below the poverty line. Communities with fast, affordable, and reliable access to the Internet are seeing new jobs. Those stuck on slow DSL are watching jobs wither away.

We continue to be amazed at state legislatures that are prioritizing laws to make it harder to expand broadband rather than easier. The only explanation is the vast amounts of money big companies like AT&T and Time Warner Cable spend in campaign contributions.

This bill is designed to prevent local governments from building next-generation networks, even when the private sector has refused to invest. It may also put an end to projects already in the works (even those that have received BTOP or BIP funding).

Last week, South Carolina's General Assembly [no-glossary]passed[/no-glossary] H3508, the ALEC and AT&T bill we previously warned you about. AT&T, ALEC, and cable companies pushed this bill to limit broadband competition and revoke local authority to decide if public investments in broadband infrastructure are wise.

H3508 is one of the worst pieces of legislation we have seen. States usually incorporate language that "grandfathers in" existing projects as a way to avoid legal challenge and federal scrutiny of their anti-competition legislation. In South Carolina, however, crafty drafting puts one county BTOP project in the cross hairs while permitting two other projects to continue.

Below is a roundup of media coverage of the bill. We will soon release our analysis of the supposed "exemptions" to this bill but in the meantime, this coverage explains several of the problems with South Carolina's latest Monopoly Protection Act.

Ars Technica's Cyrus Farivar contacted Jim Baller, a preeminent telecom attorney and expert in broadband issues:

"States have different ways to achieve the same end—discourage, delay, or derail public broadband initiatives," wrote Jim Baller, a telecom lawyer based in Washington, DC, in an e-mail to Ars on Thursday. He noted that similar bills were introduced in Minnesota and Georgia this year, the former of which has led to a "study bill," while the latter did not make it out of committee.

"In some ways, the South Carolina bill is worst of all because it does not grandfather existing projects and would retroactively undermine federal stimulus grants that Orangeburg and Oconee Counties have received,"  he added.

Farivar also looked into the chief author and found:

Sean McLaughlin from the New America Foundation and Access Humbolt alerted us to HB 1161, an AT&T and ALEC driven bill to scale back state regulation of Internet services. Sen. Alex Padilla (D-SD20, San Fernando Valley) is a co-author of the bill, introduced in February and moving steadily forward.

Sean tells us:

On Monday, the bill [no-glossary]passed[/no-glossary] CA Assembly's Committee on Utilities and Commerce with only one brave NO vote (Asm. Huffman is also leading candidate for US House for the new CA-2 district).  Next stop is Assembly Appropriations Cte. but it will quickly move to the Assembly Floor - NOW is the time to alert all Assembly Members in California to stop this juggernaut.

Access Humbolt's press release is an excellent analysis and tells us why this bill needs to be stopped:

"While the Bill strives to be self-limiting and makes hopeful assumptions about the benefits of unfettered industry, it neglects to address three profound and overarching realities:

1. In the future all telephone or voice service will be IP enabled communication service;

2. Federal oversight over IP enabled communication services including Internet access services remains highly uncertain; and,

3. Competition is not sufficient in IP enabled communication services to protect consumers, nor to ensure universal access to an open internet.

SB 1161 removes State expertise and local knowledge from public policy making that is necessary to secure universal access to an open internet. And further, this Bill will impede State and local efforts to develop broadband services for public safety, public education, public health, public works and public media. Clearly, a more thoughtful approach is needed.

If the Bill is adopted as proposed, local community investments to support broadband deployment and adoption will suffer, causing increased costs and reduced benefits from State and Federal universal service programs for remote, rural, low income and other people in our community who are least served.

Yesterday the South Carolina Senate voted in a second reading of H 3508, a bill that has been debated in the State Legislature since it was introduced in January of 2011. The bill, pushed by AT&T and ALEC, has been on our radar for quite some time.

We have watched this piece of legislation because it will have immediate and unfortunate negative implications for the people of South Carolina. Right now, the state has a miserable adoption rate with an average of 53 out of 100 households connected. Like many other states in the South, poverty, geography, and lack of interest from the major carriers have left South Carolina behind the rest of the country.

The bill will revoke local authority to pick up the slack where the private industry has failed. If this bill passes, South Carolina will entrust its future to AT&T, which has admitted it has no solution for rural broadband. And in the meantime, it is ripping off our schools and libraries, as revealed in a recent ProPublica article examining E-rate Program.

If you live in South Carolina, call your elected officials and let them know you are a constituent and you believe communities should make these decisions locally.

Find your legislator here. Tell them to oppose H.3508 and any efforts to limit local authority to make decisions about broadband.

The Institute for Local Self-Reliance has recently posted an examination of 1999 Iowa Act Chapter 63, which expressly allows municipal networks:

Section 1. LEGISLATIVE INTENT. It is the intent of the general assembly to specifically provide that cities of Iowa which create city utilities in the manner provided by law are authorized to provide on a competitively neutral basis with existing local exchange carriers separate or combined cable communications or television, telephone, telecommunications systems or services, including wireless systems or services, through the ownership of systems or offering of the services.

Sec. 2. Section 362.2, subsection 6, Code 1999, is amended to read as follows:
6. “City utility” means all or part of a waterworks, gasworks, sanitary sewage system, storm water drainage system, electric light and power plant and system, heating plant, cable communication or television system, telephone or telecommunications systems or services offered separately or combined with any system or service specified in this subsection or authorized by other law, any of which are owned by a city, including all land, easements, rights of way, fixtures, equipment, accessories, improvements, appurtenances, and other property necessary or useful for the operation of the utility.

The 1999 legislation opened the door for Iowa communities wanting to provide broadband access in areas that had been overlooked by the private sector. Since 1999, however, lobbyists for the telecommunications industry have found ways to increase regulation of community networks that does not apply to the private sector.

In addition to an analysis of how this rule changed Iowa's approach to networks, ILSR summarizes detailed changes in the original legislation. The analysis includes pros and cons and how the telecom lobby has influenced the Iowa law since its inception.

Read more here in the ILSR Rules Library.

In an effort to improve the area’s economic prospects, county officials have worked in recent years to secure funding to refurbish roadways and sewer systems—but they also know that, in a globalized marketplace, old-school infrastructure is not nearly enough. That’s why, in 2009, Orangeburg County applied for, and received, $18.65 million in stimulus money to finally give the area access to high-speed broadband internet. County Administrator Bill Clark and his colleagues envisioned a municipal, or muni, network that could reach roughly a quarter of Orangeburg’s rural population, including just over three thousand households and one hundred businesses. ... But the titans of telecom aren’t operating on quite the same wavelength. Since last January, AT&T, CenturyLink, and Time Warner have contributed just over $146,000 to politicians in South Carolina who back legislation that would cripple networks like Orangeburg’s. It’s only one example of a broader campaign by telecom companies to protect their cartel at all costs—even at the expense of keeping the country’s poorest on the wrong side of the digital divide for many years to come.

Bill Tapper, who owns a cabinet company with clients around the world, recalls a time just a few years ago when the Internet was so slow it hurt business. "The service we had in Monticello was horrible," he said. "My employees would sometimes take the data home where they had a better Internet connection than we did and do their uploads at night." Tapper said he lost out on business, but at the time the established Internet service providers like phone and cable TV companies told Tapper and other frustrated business owners in town that the city was wired sufficiently.

After the community voted in favor of a publicly owned fiber-optic network, the incumbent provider, TDS, filed a lawsuit. The lawsuit strategically succeeded in stalling the development of the new network but did not destroy the project. Even though the incumbent provider describes pre-network status as "just fine before the city got involved," TDS took advantage of the delay they caused to began building their own fiber network. Currently, subscribers in Monticello are benefitting from their high-speed fiber in ways beyond expanded and improved access.

A little less than a year ago, the 88^th Arkansas General Assembly created HB 2033, later known as Act 1050 [pdf]. The law made a few changes to the Telecommunications Regulatory Reform Act of 1997 and, while “a few changes” may not sound like much, they don’t need to be much in order to have a significant effect on the prospect of municipal broadband in Arkansas. The language gets specific about municipal broadband, related services, and alters the possibilities in Arkansas.

WHO AND WHAT...

Prior law prohibited any government entity from offering, directly or indirectly, basic exchange services. So, an Arkansas town couldn’t create its own telephone company that offered the traditional concept of telephone service, as defined in statute.

Act 1050 expands the prohibition to data, broadband, video, and wireless. With the exception of those owning municipal electric utilities or cable television systems, Arkansas towns are now prohibited from offering broadband services to nonpublic entities.

EVERYBODY EXCEPT…

Prior law allowed an exception for government entities owning municipal electric systems or television signal distribution systems to be able to make telecommunications capacities associated with the facilities available to the public. Offering basic local exchange services was still prohibited.

Act 1050 actually opens up the uses of those networks that may have been created for the use of the electric system or television signal distribution system. The new language adds permission to use those capacities to provide, directly or indirectly, voice, data, broadband, video, and wireless. There is even an insertion that allows for like use in future constructed or acquired facilities. Reasonable public notice and a hearing are required, which is the normal course of action before making new investments.

SOME SPECIAL CONSIDERATIONS…

The National Rural Assembly, an advocate for America's hinterland, continues to track harmful legislation moving through the Kentucky Legislature. The assembly's Rural Broadband Policy Group in February publicized Senate Bill 135which eliminates the "carrier of last resort" requirement that big telcos provide basic phone basic and 911 service in rural Kentucky (Feb. press release on SB135). The bill's sponsor Senator Paul Hornback attempted to distance the negative publicity of SB 135 by crafting a new Senate Bill 12 with similar language.  SB 12 cleared a Senate panel today to the dismay of opponents.

After June 30, 2013, AT&T and other electing "Incumbent Local Exchange Carriers" (ILECs) would no longer be required to provide basic landline telephone service to all persons in a service area, and rural Kentuckians would no longer be assured of access to reliable basic phone service, including 911-emergency service. This bill would be especially harmful for rural people, because they are more likely to be in areas phone companies would decide not to serve, if given the choice. If the Kentucky bill succeeds, we expect major telephone companies to try similar bills in other states. The Rural Broadband Policy Group thinks that both bills need to be killed. After June 30, 2013, AT&T and other electing "Incumbent Local Exchange Carriers" (ILECs) would no longer be required to provide basic landline telephone service to all persons in a service area, and rural Kentuckians would no longer be assured of access to reliable basic phone service, including 911-emergency service. This bill would be especially harmful for rural people, because they are more likely to be in areas phone companies would decide not to serve, if given the choice. If the Kentucky bill succeeds, we expect major telephone companies to try similar bills in other states.

The Rural Broadband Policy Group thinks that both bills need to be killed. Possible repercussions: