The city has hired a high-profile lobbyist to fight a proposed law that would restrict municipal broadband networks like Fibrant.
Unsatisfied with the latest draft of the legislation, which they say will harm the city, Salisbury City Council members voted unanimously Tuesday night to hire the city’s first lobbyist, Tom Fetzer of Fetzer Strategic Partners in Raleigh, at $5,000 per month.
Council committed to use Fetzer, the outgoing N.C. Republican Party chairman and a former mayor of Raleigh, for one month and could retain him throughout the legislative session, which ends in July.
City officials continue to object to House Bill 129, “Level Playing Field/Local Government Competition,” saying they were promised Salisbury would be spared and demanding full exemption.
A bill sponsor says legislators have worked hard to accommodate Salisbury and are waiting for the city to provide more information.
The most recent draft of the bill, sent to the city at noon Tuesday, still would harm Salisbury’s ability to operate Fibrant and pay back $30 million the city borrowed to build the telecommunications network, officials said.
Salisbury is one of a handful of communities in the state that has a municipal broadband network up and running. The city wants exemption from any rules or laws that didn’t exist when Fibrant started.
“It’s a fairness issue,” Mayor Susan Kluttz said.
The proposed law, backed by Time Warner Cable, would level the playing field by removing advantages cities have over private companies, according to the cable lobby.
The bill was recommended favorably by the Public Utilities Committee and is scheduled to go before the Finance Committee Thursday.
Bill co-sponsor N.C. Rep. Julia Howard, R-Davie, who also serves as chairwoman of the Finance Committee, has said she intends to carve out Salisbury and hold the city harmless.
Mayor Susan Kluttz said Howard pledged she would not bring the bill to committee until all parties were in agreement.
“If she goes on to the Finance Committee, then she’s going back on her word,” Kluttz said.
Howard has not returned repeated phone calls from the Post in the past week.
Assistant City Manager Doug Paris said Howard is asking the city to agree to restrictions “that we know would harm us.”
But another legislator said sponsors have given Salisbury all the exemptions they can.
The city is exempt from paying taxes, as well as other financial burdens that would impede its future broadband business, N.C. Rep. Marilyn Avila, R-Wake, said Tuesday night.
“But we can’t say you don’t have to comply with federal communication laws,” Avila said. “We can’t exempt them with that.”
Sponsors also will not exempt Salisbury from parts of the bill that ban cities from discriminating against cable companies, such as refusing access to rights of way or increasing pole attachment fees, she said.
And sponsors are still waiting to hear from Salisbury about some parts of the bill, Avila said.
She said she sent an e-mail last week asking Salisbury to stake out where the city wants to sell Fibrant.
“I was waiting to hear from them about what territory they wanted,” she said.
Since she hadn’t heard from the city, Avila kept language in the bill that would allow Salisbury to sell Fibrant only within the city limits.
Avila said she is willing to change the city’s jurisdictional boundaries to include adjacent towns, such as Spencer, but not the entire county.
“That won’t happen,” she said.
The city objects to the limited jurisdiction. Officials also object to a provision they say would restrict the city’s ability to refinance Fibrant at a lower interest rate, or finance an expansion in case of annexation.
Avila said sponsors took the financing issue into account. The proposed law would not prevent Salisbury from financing an upgrade or maintenance of Fibrant, she said.
Initially, cities thought they had to seek voter approval for general obligation bonds to fund improvements and expansions of their networks, but that was a misunderstanding, she said.
“They do not need a vote from the citizens,” Avila said.
However, the new law would require voter approval before cities could build or buy a municipal broadband network.
Salisbury borrowed $30 million without voter approval but with the blessing of the N.C. Local Government Commission.
City officials object to a provision in the legislation that would place Fibrant and other community networks under the N.C. Public Utilities Commission. The bill, which requires cities to abide by laws governing the private sector, also would make Salisbury vulnerable to lawsuits from the private sector, said Paris, the assistant city manager.
Cable companies sued the city of Lafayette, La. using a similar law, he said. Although the Louisiana State Supreme Court eventually sided with the city, the case dragged on for two years, Paris said.
Salisbury City Council met for about 90 minutes Tuesday in closed session with City Attorney Rivers Lawther and communications attorney Jim Baller, who called in from Washington, D.C.
Baller specializes in fiber to the home networks like Fibrant.
He went over the proposed legislation section by section and gave examples of other cities around the country that have experienced detrimental effects of similar laws, Kluttz said.
More than half the states have passed laws restricting municipal broadband networks.
“We went into this in good faith,” Kluttz said. “For state legislators to change those rules now would be very unfair to us.”
If the bill passed as written today, Salisbury could operate Fibrant and repay its debt, said Avila.
“I’m not out to ruin the town,” she said.
Compared to similar laws proposed in the past, Avila said she has worked out far more compromises and has spent hours meeting with officials from Salisbury and other cities with broadband.
This is the fourth year the cable lobby has backed a bill restricting municipal broadband.
“The kinds of compromises we are trying to work out for the city are moving it forward by a significant amount,” she said. “I’m trying to get people to come to the table in good faith to talk to me.”
If Finance Committee gives the bill a nod Thursday, it could move the following week to the House floor, where Avila said she has the votes. With two Democratic co-sponsors, N.C. Rep. Becky Carney, D-Mecklenburg, and N.C. Rep. William Wainwright, D-Craven/Lenoir, Avila said the legislation has broad support.
Kluttz said she hoped the Finance Committee will not recommend the bill.
“They should understand the significance of this to Salisbury and not support something that would hurt Salisbury,” she said.
If the Finance Committee recommends the bill, Kluttz said she’s pinning her hopes on the N.C. Senate, where a replica of House Bill 129 awaits.
Contact reporter Emily Ford at 704-797-4264.
Wednesday, March 16, 2011 12:00 AM
By Emily Ford
