Senate moves to ease municipal Wi-Fi

Since then, the concept of municipal broadband has mushroomed, with dozens of projects already online and scores more on the way. In response, states including Florida, Texas, Virginia and Pennsylvania have enacted laws intended to curb those projects, measures that are often backed by companies like Verizon Communications and Comcast.

That legislative trend has captured the attention of U.S. senators, who voted this week to prevent state governments from following Pennsylvania's lead. A telecommunications bill that the Senate Commerce Committee approved by a 15-7 vote on Wednesday says that no state may prohibit its own municipalities from offering broadband services.

It does say, though, that any municipality that chooses to sell its own broadband service must give a 30-day notice and solicit bids from the private sector. But it's not required to accept any of the bids.

Sen. Ted Stevens, the Alaska Republican who heads the committee, described the final wording (click for PDF) as a reasonable "compromise" between competing measures, some of which would have slapped more restrictions on local governments. "I think it is fair to say that they feel we have made major progress and have met them more than halfway," Stevens said.

The massive telecommunications bill--called the Communications, Consumer's Choice, and Broadband Deployment Act--now heads to the full Senate for a vote. But because the legislation lacks extensive Net neutrality regulations preferred by many Democrats, its future is uncertain and a final vote could be delayed for months or even until next year.

An additional complicating factor is that the House of Representatives voted on June 8 for its own telecommunications bill that takes a significantly different approach.

It says only that municipalities that own or have investments in a broadband provider "shall not grant any preference or advantage to any such provider."

Negotiations between the House and the Senate, in the form of a conference committee, are expected to give telecommunications lobbyists a second chance to influence the wording.

A duopoly between cable providers, such as Comcast, and DSL providers, such as AT&T and Verizon, "does not provide sufficient choice to drive innovation and preserve consumer freedom to use the services and applications of their choosing," Chris Putala, EarthLink's executive vice president for public policy, told the Senate this month.

EarthLink has endorsed the Senate's version of the municipal broadband language. There's a straightforward business reason for it: The company's EarthLink Municipal Networks unit has been busy working with municipalities on building networks. Its current customers include Anaheim, Calif., San Francisco through a partnership with Google, and Philadelphia.

In addition to the business disputes playing out in the political realm, ideologies are clashing.

Republican politicians, especially ones who count themselves as friends of the free market, tend to be deeply suspicious of government bureaucracies that compete with private businesses. Verizon, Comcast and other broadband providers are spending billions to build new networks and should not be undercut by taxpayer-subsidized efforts, they believe.

Some members of Congress, like Sen. John Ensign, a Nevada Republican, are expected to continue to press for more restrictions on cities and counties that are would-be sellers of Internet connections. "Whenever possible I don't like to see local governments competing with the private sector," Ensign said.

The United States Telecom Association, which represents large telecommunications companies including Verizon, AT&T, BellSouth, Windstream, CenturyTel and NTT, has asked Congress to take what amounts to a federalist approach--and refrain from intervening at all in a dispute between state and local governments.

But proponents of municipal broadband aren't likely to listen. "Many Americans don't have broadband because they live in smaller towns where companies won't make it available or they simply can't afford broadband service," said Sen. Frank Lautenberg, a New Jersey Democrat. "Communities across the U.S. have stepped in to respond."