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Senators can't agree on municipal broadband rules

Amid multiple proposals, politicians can't agree on whether municipalities offering broadband service should be applauded.

WASHINGTON--When cities create wireless networks, should the federal government restrict their efforts, promote them, or let individual states decide the ground rules?

That's the question politicians and industry representatives batted around during a 90-minute U.S. Senate Commerce Committee hearing here Tuesday afternoon.

The hearing came amid an ongoing debate over whether local governments should get into the business of offering broadband to their residents. A number of smaller towns have already started building their own networks. Those in favor of the projects argue they'll bridge the nation's digital divide and provide broadband more quickly to underserved areas.

Philadelphia, for example, sealed a deal with Internet service provider EarthLink to blanket its 135-square-mile territory with Wi-Fi. That service, scheduled to be complete by early next year, would be offered to low-income residents at subsidized rates and to everyone else at market rates, likely about $20 per month. A number of other large cities, including New York and San Francisco, have explored similar options.

But municipalities have faced considerable resistance from the big telecommunications and cable companies, such as Verizon and Comcast, which are investing billions of dollars to build networks and are worried about being undercut by government offerings. Those firms and other opponents to municipal control--including 14 state legislatures that have passed laws restricting or forbidding such efforts--say private companies are better suited than government bureaucrats to serve the public's needs.

For some at Wednesday's hearing, the answer was clear: If the nation hopes to pull up its worldwide ranking in broadband deployment, the federal government must step in and protect the rights of municipalities to build their own broadband networks. "As we work to reach the goal of universal broadband, we must open new doors, not slam them shut," said Sen. Frank Lautenberg, a New Jersey Democrat.

Last summer, Lautenberg and Arizona Republican Sen. John McCain introduced the Community Broadband Act of 2005, a bill aimed at preventing states from blocking public sector entrants into the broadband business. The proposal appears to target the 14 states that, according to Lautenberg, have already passed laws bearing such restrictions or prohibitions.

That bill, which is still pending in its committee, drew encouragement at the hearing from Philadelphia Chief Information Officer Dianah Neff and EarthLink's Donald Berryman, the president of its municipal networks division.

Sen. John Ensign, a Nevada Republican, urged a more cautious, market-oriented approach. "I drafted legislation that obviously sides more with the private sector," he said. "That's my bent...whenever possible I don't like to see local governments competing with the private sector."

Ensign was referring to the substantially deregulatory broadband reform bill he introduced last summer. One of its sections aims to limit municipal involvement in such networks by imposing a long list of requirements for their foray into the market. It's not bluntly prohibitive of the practices, however, in the manner of another pending proposal by Texas Republican Pete Sessions in the U.S. House of Representatives.

Others on the seven-member panel testifying before the politicians discouraged any involvement on the government's part. "This is an issue that should be left to the states and localities to work out between themselves," said Douglas Boone, CEO of Premier Communications, an Iowa broadband provider, who was also speaking on behalf of the U.S. Telecom Association.

Boone said the government's role, instead, should be to ensure that adequate resources--such as making broadband eligible for universal service fund support, a proposal that has already been raised in Congress this term--are in place for building rural broadband networks.

Chairman Ted Stevens, an Alaska Republican, indicated to reporters after Tuesday's hearing that he didn't necessarily favor any of the proposals currently under consideration. Of municipally sponsored broadband, he said, "I only want to make sure it fits into the system of what is fair and doesn't prohibit future competition."