HomeMy WebLinkAboutAgenda - 05-05-2009 - 4qORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 5, 2009
Action Agenda
Item No. ~ - a
SUBJECT: Resolution Opposing House Bill 1252 and Senate Bill 1004
DEPARTMENT: County Manager PUBLIC HEARING: (YIN) No
ATTACHMENT(S): INFORMATION CONTACT:
Proposed Resolution Laura Blackmon, 245-2300
House Bill 1252 (Second Edition)
Email from Triangle J Council of
Governments on House Bill 1252
(Second Edition)
List of House Public Utilities Committee
Members
PURPOSE: To consider approval of a resolution opposing House Bill 1252 and Senate Bill
1004 and any other similar legislation, authorize the Chair to sign the resolution, and direct the
Clerk to the Board to forward the signed resolution to Orange County's legislative delegation
and members of the House Public Utilities Committee of the North Carolina General Assembly.
BACKGROUND: House Bill 1252 and its companion bill Senate Bill 1004, both entitled "Level
Playing Field/Cities/Service Providers" and referred to by proponents as the Level Playing Field
Act, have been introduced in the 2009 Session of the General Assembly of North Carolina. The
bills have been referred to the House Public Utilities Committee and Senate Commerce
Committee, respectively.
These bills do not provide a "level playing field" to cities, towns and counties, but instead hinder
local governments from providing needed communications services, especially advanced high-
speed broadband services, in underserved areas. This bill also impose numerous obligations
on local governments that private broadband companies do not have to meet
The bills would also prohibit North Carolina local governments from applying for and using
federal grant funds (including $4.7 billion from the American Recovery and Reinvestment Act) to
deploy or operate locally-owned or operated broadband systems. This would deny access to
federal assistance to provide affordable high capacity broadband services to unserved and
underserved areas of North Carolina.
FINANCIAL IMPACT: There is no financial impact associated with consideration of the
resolution.
RECOMMENDATION(S): The Manager recommends the Board approve the resolution
opposing House Bill 1252 and Senate Bill 1004 and any other similar legislation, authorize the
Chair to sign the resolution, and direct the Clerk to the Board to forward the signed resolution to
Orange County's legislative delegation and members of the House Public Utilities Committee of
the North Carolina General Assembly.
2
ORANGE COUNTY BOARD OF COMMISSIONERS
RESOLUTION OPPOSING HOUSE BILL 1252 and SENATE BILL 1004
(Entitled by Proponents as the Level Playing Field Act)
WHEREAS, House Bill 1252 and its companion bill, Senate Bill 1004, both entitled "Level
Playing Field/Cities/Service Providers" and referred to by proponents as the Level Playing
Field Act, have been introduced in the 2009 Session of the General Assembly of North
Carolina, and referred to the Senate Commerce Committee and House Public Utilities
Committee, respectively; and
WHEREAS, these bills do not provide a "level playing field" to cities, towns and counties,
but greatly hinder local governments from providing needed communications services,
especially advanced high-speed broadband services, in underserved areas; and
WHEREAS, the bills do not provide a "level playing field", but instead impose numerous
obligations on local government that private broadband companies do not have to meet; and
WHEREAS, private companies, despite having received favorable regulatory and tax
treatment to enable broadband investment, have chosen to avoid the financial commitment
necessary to provide top quality services, instead offering lesser quality, slower non-state-of-
the-art infrastructure technologies that are not even available to all residents; and
WHEREAS, while private companies declare top quality service is cost-prohibitive in our
country, the United States continues to lose ground to other nations in broadband access, cost
and growth in the number of users, falling behind the United Kingdom, Korea, France, Japan
and Canada to name a few, with Japan's less expensive internet access at least 500 times
faster than what is considered high-speed in the United States; and
WHEREAS, the U.S. Congress provided funds in the American Recovery and Reinvestment
Act to reverse our country's catastrophic broadband decline by making local and state
governments, and not private communication companies, directly eligible for $4.7 billion in
federal grants to provide affordable access to high capacity broadband services in unserved
and underserved areas; and
WHEREAS, the bills would prohibit North Carolina local governments from using federal
grant funds to deploy or operate locally-owned or operated broadband systems, thereby
denying North Carolina residents access to billions of dollars of federal assistance available
to the rest of the country and hindering employment opportunities; and
WHEREAS, deployment of true high-speed broadband internet is a new public utility vital
to the future economic development, educational outreach, and community growth in North
Carolina necessary to replace lost textile, tobacco, furniture and manufacturing jobs; and
WHEREAS, the General Assembly has already established 1) statutory provisions for Public
Enterprises (NCGS Chapter 160A, Article 16); 2) conservation finance provisions in the
Budget and Fiscal Control Act (NCGS Chapter, 159 Article 3); and 3) oversight by the Local
Government Commission (NCGS Chapter, Article 2), with a local government required to
comply with all of those requirements in order to undertake providing an enterprise service to
its community; and
WHEREAS, the two bills as proposed are counter to the Local Development Act of 1925 in
NCGS Chapter 158 that allows local governments to aid and encourage economic
development in communities throughout North Carolina; and
WHEREAS, North Carolina law has long permitted local governments to engage in public
enterprises and there is no justification for treating communications enterprises differently
from other public enterprises that are essential for a sound economy; and
WHEREAS, historically it has been government that funded much of the current corporate
telecommunications infrastructure in the United States and government that paid for and
developed the Internet; and
WHEREAS, there are telecommunications designers, equipment manufacturers and
suppliers in North Carolina who will be negatively affected if local governments are not
allowed to provide needed communications services, meaning North Carolina will stand to
lose more jobs by not investing in top-quality broadband infrastructure than it will lose due
to government provision of such services; and
WHEREAS, many for-profit companies with operations in North Carolina have joined
North Carolina local governments in opposing these bills;
NOW THEREFORE BE IT RESOLVED that we, the Orange County Board of
Commissioners, oppose House Bill 1252 and Senate Bill 1004 and any other similar
legislation and urge all members of the North Carolina General Assembly to oppose this
legislation in committee and, if necessary, on the floor of the General Assembly.
This the 5`" day of May 2009.
Valerie P. Foushee, Chair
Orange County Board of Commissioners
Attest:
Donna Baker, Clerk
Orange County Board of Commissioners
North Carolina General Assembly -House Bill 1252 Information/History (2009-2010 Ses... Page 1 of 1
« Previous: H1251 Next: H1253 »
House Bill 1252 (= 51004)
2009-2010 Session
Level Playing Field/Cities/Service Providers.
Text Fiscal Note
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EdltlOn 1 [HTML] -
EdltlOn 2 [HTML] -
Status: Re-ref Com On Public Utilities on 04/23/2009
Sponsors
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Primary: Harrell; Jones; Avila; Tillis;
Co: Bell; Cole; Crawford; Current; Dollar; Earle;
Guice; Gulley; Hilton; Holliman; Johnson;
Justus; Lucas; Neumann; Sager; Steen;
Attributes: Public; Text has changed;
History
Date
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04/08/2009 House Fled
04/09/2009 House Passed 1st Reading
04/09/2009 House Ref to the Com on Science and Technology, if favorable, Public Utilities, if
favorable, Finance
04/23/2009 House Reptd Com Sub w/o Prejud
04/23/2009 House Re-ref Com On Public Utilities
Note: a bill listed on this website is not law until passed by the House and the Senate, ratified,
and, if required, signed by the Governor.
http://www. ncga.state.nc.us/gascripts/BillLookUplBillLookUp.p1?bPrintable=true& Sessio... 4/3 0/2009
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2009
H 2
HOUSE BILL 1252*
Committee Substitute Reported Without Prejudice 4/23/09
Short Title: Level Playing Field/Cities/Service Providers. (Public)
Sponsors:
Referred to:
Apri19, 2009
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A BILL TO BE ENTITLED
ACT TO REGULATE COMPETITION BETWEEN LOCAL GOVERNMENT AND
PRIVATE BUSINESS BY REQUIRING CITIES THAT PROVIDE
COMMUNICATIONS SERVICE TO THE PUBLIC TO COMPLY WITH LAWS
APPLICABLE TO PRIVATE PROVIDERS, TO ESTABLISH SEPARATE ENTERPRISE
FUNDS, TO NOT CROSS-SUBSIDIZE COMMUNICATIONS SERVICE WITH OTHER
GOVERNMENTAL FUNDS, TO IMPUTE THE COSTS THAT WOULD BE
INCURRED BY PRIVATE PROVIDERS, TO ANNUALLY REMIT TO THE CITY'S
GENERAL FUND THE COSTS THAT WOULD BE INCURRED BY PRIVATE
PROVIDERS, AND TO PREPARE AN ANNUAL AUDIT OF COMPETITIVE
ACTIVITIES.
The General Assembly of North Carolina enacts:
SECTION 1. Article 16 of Chapter 160A of the General Statutes is amended by
adding a new section to read as follows:
"_& 160A-329. City owned or operated communications service.
~ Definitions. -The following definitions apply in this section:
Communications network. - A wired or wireless network for the provision
of communications service.
~2,~ Communications service -The provision of cable telephone broadband or
Internet access service to the public or any sector of the public, regardless of
the technology used to deliver the service.
High=speed Internet. -Internet access with transmission speeds that are
consistent with requirements for high=s-speed broadband Internet access as
defined by the Federal Communications Commission from time to time.
Requirements - A city that operates a public enterprise under G.S. 160A-311 that
provides communications service to the public for a fee over a communications network that is
directly or indirectlyowned or operated by or provides a financial benefit to the city or another
city shall meet the following conditions with respect to the provision of communications
service:
Comkly with all local State and federal laws regulations, or other
requirements that would apply to the communications service if provided by
a private communications service provider.
Establish a separate enterprise fund for communications service and shall
use this fund to separately account for revenues expenses, property, and
source of investment dollars associated with the provision of
communications service.
nmmm
General Assembly Of North Carolina
Session 2009
1 ~ Shall not subsidize the cost of providingLcommunications service with funds
2 from anv other noncommunications service operation, or other revenue
3 source including anv funds or revenue generated from electric, gas, water,
4 sewer or garbaee services but excluding funds from State or federal grants
5 and other governmental stimulus programs In complying with this
6 requirement a city owned communications service provider shall not price
7 any communications service below the cost of providing the service.
8 ~4~ Shall in calculating the cost incurred and in the rates to be charged for the
9 provision of communications service impute• (i) the cost of the capital
10 component that is equivalent to the cost of capital available to private
11 communications service~roviders in the same locality: and (ii) an amount
12 equal to all taxes including_property taxes licenses fees and other
13 assessments that would apply to a private communications service provider
14 including federal State and local taxes• rights-of--way, franchise, consent, or
15 administrative fees; and pole attachment fees.
16 ~ Shall annually remit to the general fund of the city an amount equivalent to
17 all taxes or fees a private communications service provider would be
18 required to pay the city or county in which the city is located, including any
19 applicable tax refunds received by the city owned communications service
20 provider because of its government status and a sum equal to the amount of
21 property tax that would have been due if the city owned communications
22 service provider were a private communications service provider.
23 ~ Shall prepare and publish an independent annual audit in accordance with
24 generall~epted accounting~rinciples that reflect the fully allocated cost
25 of providing the communications service, including all direct and indirect
26 costs The indirect costs shall include amounts for rights-of--way, franchise,
27 consent or administrative fees re~ulatory fees, occupation taxes, pole
28 attachment fees and ad valorem taxes. The annual accounting shall reflect
29 anv direct or indirect subsidies received by the city owned communications
30 service provider and any_buildin~q_uipment, vehicles, and personnel that
31 are jointly used with other city departments shall be fully allocated to the
32 cites owned communications service. The North Carolina Utilities
33 Commission ma~pt rules and regulations to ensure compliance with the
34 provisions of this subdivision and all records demonstrating compliance
35 shall be filed with the North Carolina Utilities Commission and made
36 available for public inspection and copying.
37 ~ Exemptions. -
38 ~, The p rovisions of this section shall not apply to:
39 a. The purchase lease construction or operation of facilities by a city
40 to provide communications service within the city's boundaries for
41 the city's internal governmental purposes.
42 b. Any city whose jurisdiction is not served by a private provider of
43 hi hg_-speed Internet service or whose iurisdiction does not have
44 access to high-speed Internet service. For purposes of this subsection,
45 a city shall be determined to have access to high=speed Internet
46 service if high=speed Internet service is available to at least eighty
47 percent (80%) of the households in the cites
48 c. The provision of communications service by a city to the extent the
49 service is limited to areas of the city that are not served by any
50 private communications service provider.
Page 2 House Bill 1252*-Second Edition
General Assembly Of North Carolina Session 2009 O
1 ~ The provisions of subdivisions (b)(3 through (b)(61 of this section shall not
2 apply to communications service duly authorized by a city on or before
3 March 1, 2009."
4 SECTION 2. G.S. 62-3(23) is amended by adding the following new
5 sub-subdivision to read:
6 "l. The term "public utility" shall include any city providing
7 service as defined in G.S. 62-3(23)a.6. and subject to
g regulation under G.S. 160A-329."
9 SECTION 3. Any city that is designated as a public utility under Chapter 62 of the
10 General Statutes when this act becomes law shall not be subject to the provisions of this act
11 with respect to any of its operations that are authorized by that Chapter.
12 SECTION 4. If any provision of this act or the application thereof to any person or
13 circumstance is held invalid, the invalidity shall not affect other provisions or applications of
14 this act which can be given effect without the invalid provision or application, and to that end
15 the provisions of this act are declared to be severable.
16 SECTION 5. This act is effective when it becomes law and applies to the provision
17 of communications service by a city owned communications service provider after that date.
House Bill 1252*-Second Edition Page 3
0
-----Forwarded Message----
From: Renee Boyette
Sent: Apr 27, 2009 12:51 PM
To: Region J Managers , Region J Assistant Managers ,Board of Delegates ,Alternate Delegates
Subject: Anti-MUNI BEND Bill - TJCOG Call to Action?
Hi all,
Kirby asked me to forward this request.
Thanks,
Renee
Please consider adopting the attached NCLM resolution in opposition to the S61004 and H61252 -the
"Anti-Muni Broadband Bills". After adoption, send a copy of the resolution to the House Public Utility
Committee members (list attached) as well as to your local legislative delegation. The PU Committee
members need to hear from the local communities as the cable industry has a has a lot of folks in Raleigh
on this right now.
From Action Audits---Wednesday's Committee Action update
The House and Science Committee voted on H1252, the so-called "The Level Playing Field" bill today, but
reported it out, not with a favorable report, but to the Public Utilities Committee and "without prejudice,"
which apparently is code for the legislators that this is a bill very much in trouble. This is a small victory, but
our battle continues, now in the Public Utilities Committee.
Perhaps this will be a day remembered again for when North Carolina refused to be a captive of Time
Wamer Cable. Time Warner Cable demonstrated it was the obvious sponsor of H1252 when the Committee
Chair (and bill's legislative sponsor) was asked various questions by Committee members, and asked Time
Warner Cable's Director of Government Affairs, Brad Phillips, and outside attorney, Marc Trathen, to the
podium to answer what the bill meant. Stirring that debate was Rep. Haire (D-Haywood, Jackson, Mason,
Swaine) a particular champion of the people, who successfully obtained the elimination of injunctive relief
language which one of the Committee members argued created a presumption favoring TWC if it chose to
sue a community for providing bbnd, with Rep. Dan Blue (D-Wake) and Rep Jones (D-Guilford) asking good
questions at Haire's side. While this discusssion was going on, one of the bill's sponsors Thom Tillis (R-
Mecklenburg) was passed a note by Time Warner Cable's Brad Phillips. Tillis raised his hand and told the
Committee Chair he had no problem with the amendment and it passed on voice vote.
As part of the bill's presentation, the crowd learned that changes had been made to the original version of
the bill by the bill's sponsor, one allegedly removing any threat on the use of federal grant money to
build municipal systems, and the other allegedly grandfathering existing systems. Neither change does that
in reality. The emotional tenor of the meeting was raised in fact when Mr. Phillips, who described
these changes, then characterized them as having been approved by the cities, naming Mi-CONNECTION
and Salisbury specifically. But the individual Cities had not met with the industry, nor approved any such
changes.
Directly before the final vote, NCLM's representative, Kelli Kukura, spoke in powerful and direct opposition to
the bill and deferred the remainder of her time to the Mayors of Salisbury and Wilson, the former who
clarified they had not approved any changes to the bill, and the latter who made an impassioned plea that
this bill was nothing other than an "incumbents" bill and a series of burdens on municipalities who dared to
bring the level of bbnd infrastructure to their residents that will keep them globally competitive. Alcatel-
Lucent, through Kevin Krufsky, then came to the podium and provided an elegant and pressured argument
about why the bill was bad for North Carolina's economic development and would create anything BUT a
level playing field, but would have the effect of denying North Carolina access to next generation broadband
systems. The Bill's sponsor, Ty Harrell, then acted on Rep. Tillis' motion to report the bill out favorably to the
Utility Committee; Rep. Haire interrrupted and made a substitute motion that the bill be reported out to the
Public Utility Committee without prejudice. Ty Harrell objected saying it should be reported out favorably. A
vote was taken on Haire's motion of voice vote, and Rep. Tolson called the vote in favor of Haire's substitute
amendment, that it report out without prejudice.
Next Steps: A list of Public Utility Committee members is attached. Bill sponsors on the Committee are
noted in red. Cities, towns and counties are strongly encouraged to adopt the NCLM resolution and send it
to their representatives and to Committee members, to make it clear to legislators on the Public Utility
committee that this is a bill that will only harm North Carolina's future. There is nothing "level" about it. It is
merely the act by a $17.2 billion/year cable company to stop local NC communities from building their own
broadband infrastructures.
0
HOUSE PUBLIC UTILITY COMMITTEE
Lorraine Coates (D-Rowan County)
Chair, House Public Utility Committee
300 North Salisbury Street, Room 633
Raleigh, NC 27603-5925
Email:
Lorene.Coates~n,ncleg net
coatesla(a~ncleg net
Phone: 919-733-5784
Harold Brubaker (R -Randolph County)
Vice Chair, House Public Utility Committee
16 West Jones Street, Room 1229
Raleigh, NC 27601-1096
Email:
Harold.Brubaker(a,ncleg.net
Brubakerla(a~ncleg net
Phone: 919-715-4946
Nelson Cole (D -Rockingham County)
16 West Jones Street, Room 1218
Vice Chair, House Public Utility Committee
Raleigh, NC 27601-1096
Email:
Nelson.Cole(a~ncleg.net
Colelana,ncle~.net
Phone: 919-733-5779
Bill Faison (D- Orange, Caswell Counties)
Vice Chair, House Public Utility Committee
300 North Salisbury Street, Room 611
Raleigh, NC 27603-5925
Email:
Bi11.Faison(a~ncleg net
faisonla(c~ncleg net
Phone: 919-715-3019
Russell E. Tucker (D- Onslow, Duplin Counties)
Vice Chair, House Public Utility Committee
300 North Salisbury Street, Room 611
Raleigh, NC 27603-5925
Email:
Russell.Tucker(a~ncleg net
Tuckerla(a~ncleg net
-CONTINUES-
~o
Kelly M Alexander, Jr. (D-Mecklenberg)
300 N. Salisbury Street, Room 632
Raleigh, NC 27603-5925
Email:
Ke11y.Alexander(a),ncle~.net
Alexanderla(a,nclegnet
Phone: 919-733-5778
Hugh Blackwell (R-Burke County)
NC House of Representatives
300 N. Salisbury Street, Room 606
Raleigh, NC 27603-5925
Email:
Hu~h.Blackwell(a~ncleg net
Blackwellhla(a~ncleg net
Phone: 919-733-5805
Angela Bryant (D-Nash, Halifax Counties)
300 N. Salisbury Street, Room 542
Raleigh, NC 27603-5925
Email:
An elg aBryant(a,nclegnet
Br~a(a~ncleg net
Phone: 919-733-5878
Becky Carney (D-Mecklenburg)
16 West Jones Street, Room 1218
Vice Chair, House Public Utility Committee
Raleigh, NC 27601-1096
Email:
Becky.Carney(a),ncleg net
Carneyla(a~ncleg net
Phone: 919-733-5827
Beverly Earle (D-Mecklenburg County)
300 North Salisbury Street, Room 634
Raleigh, NC 27603-5925
Email:
Beverly.Earle(a~ncleg.net
Earlela(a~ncleg.net
Phone: 919-715-2530
CONTINUED
II
Bruce Goforth (D-Buncombe County)
16 West Jones Street, Room 1220
Vice Chair, House Public Utility Committee
Raleigh, NC 27601-1096
Email:
Bruce.Goforth(a~ncleg net
Goforthla(n~ncleg net
Phone: 919-733-5746
W. Robert Grady (R- Onslow County)
300 North Salisbury Street, Room 302
Raleigh, NC 27603-5925
Email:
Robert.Grad~(a~ncleg net
Gradyla ,ncleg net
Phone: 919-715-9644
Jim Gulley (R-Mecklenburg County)
16 West Jones Street, Room 1313
Raleigh, NC 27601-1096
Email:
Jim.Gulleyna,ncle~.net
Gulleyla(u~ncle~.net
Phone: 919-733-5800
Pricey Harrison (D-Guilford)
16 West Jones Street, Room 2119
Raleigh, NC 27601-1096
Email:
Pricey.Harrison~a,ncleg net
Harrisonla(a~ncleg net
Phone: 919-733-5771
Hugh Holliman (D-Davidson County)
16 West Jones Street, Room 2301
Raleigh, NC 27601-1096
Email:
Hugh.Holliman(a~ncleg.net
Hollimanla(u)ncleg.net
Phone: 919-715-0873
CONTINUE
is
Julia Howard (R- Davie &Iredell Counties)
16 West Jones Street, Room 1106
Raleigh, NC 27601-1096
Email: Julia.Howard(c~ncleg net
Howardla(cer~,ncleg.net
Phone: 919-733-5904
Linda Johnson. (R-Cabarrus County)
16 West Jones Street, Room 1006
Raleigh, NC 27601-1096
Email:
Linda.Johnson2(u)ncleg.net
Johnson2la(a~ncleg.net
Phone: 919-733-5861
Marvin W. Lucas (D- Cumberland)
300 North Salisbury Street, Room 417A
Raleigh, NC 27603-5925
Email:
Marvin.Lucasna,nclegnet
Lucasmla(c(c~ncleg net
Phone: 919-733-5775
Danny McComas (D-New Hanover County)
300 North Salisbury Street, Room 506
Raleigh, NC 27603-5925
Email:
Danny.McComas(a~ncleg.net
McComasla(a,nclegnet
Phone: 919-733-5786
Tim Moore (R- Cleveland)
300 North Salisbury Street, Room 604
Raleigh, NC 27603-5925
Email:
Tim. Moore(a~ncleg_net
Moorela ,ncleg net
Phone: 919-733-4838
Wil Neuman (R.- Gaston)
300 North Salisbury Street, Room 604
Raleigh, NC 27603-5925
Email:
Wi1.Neumann(a~ncleg.net
Neumannla(a~ncleg net
Phone: 919-733-5868