By Roy Mark

June 03, 2005

A new bill would prohibit state and local governments from competing with private-sector providers.

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U.S. Rep. Pete Sessions (R-Texas) wants to take state and local governments out of the broadband business. It’s for their own good, the former Southwestern Bell executive said.

Under the terms of the Preserving Innovation in Telecom Act (H.R. 2726) introduced by Sessions, state and local governments would be prohibited from offering telecommunications, telecommunications services, information services or cable service in any geographic area in which a private entity is already offering a substantially similar service.

Governments already offering telecom services would be grandfathered under Sessions’ legislation. The bill also provides that in markets where private entities fail to offer service, municipal governments would be permitted to build networks and offer service.

“Rather than investing in vital public works projects, some local and state governments are investing their limited funds into telecommunications projects and putting taxpayer dollars at risk,” the five-term congressman from Dallas said in a statement. “By choosing to invest their limited resources in telecommunications infrastructures, municipal governments often duplicate services already provided by a private entity.”

Gina Vaughn, Sessions’ communications director, told internetnews.com in an e-mail response, “We believe … that under normal circumstances private providers are the ones with resources at their disposal to make the upgrades that come with continually evolving technology.”

She added, “Municipal governments, with the many public works demands they face, are not in an ideal situation to be pouring money into continued telecom infrastructure updates.”

Over the last several years, numerous cities, most notably Philadelphia, have considered launching their own wireless networks in direct competition with local providers. Republicans in particular are opposed to cities competing with private enterprise.

Earlier this week, Florida Gov. Jeb Bush signed a law similar to Sessions’ national proposal prohibiting Florida cities from offering broadband if competitive services already exist.

Pennsylvania pushed through laws in December restricting municipal-backed broadband services, with Philadelphia receiving an exemption from the new law. The city plans to sell its wireless broadband service to homes and businesses, while providing free access in public spaces.

“My goal in introducing this legislation is to discourage municipal governments from wasting taxpayer funds on building duplicative infrastructure, while at the same time encouraging private companies to offer continually innovating service in underserved areas by removing the specter of government competition,” Sessions said.

Before winning election to Congress, Sessions spent more than 16 years at the Bell Labs in New Jersey, and served as a Southwestern Bell district manager for marketing in Dallas.