Don't limit cable, Internet competition
4:29 PM 10/18/03

Wisconsin shouldn't be in the business of protecting large cable television and telecommunication companies from competition. For that reason, the Legislature should reject a new measure that would discourage a community from starting its own cable TV, telephone or high-speed Internet service. <

At stake is consumers' ability to benefit from the choice and creativity that competition in the marketplace supports - or, sometimes, the ability to benefit from any service at all. <

For several years, cable TV and telecommunications companies have been concerned about a small but growing trend: Local governments, fed up with the monopoly power of cable TV and telecommunications companies, have started creating their own services. <

In Wisconsin, Oconto Falls and Reedsburg operate municipal cable TV systems, and Reedsburg, Sun Prairie and Waupaca offer high-speed Internet service. <

Sometimes the municipal services compete directly with services provided by a corporation. Sometimes, they exist to meet consumer demand that corporations declined to meet. Waupaca's high-speed Internet service, for instance, began after a small business in need of high-speed connection was unable to persuade any companies to offer the service in the community of 5,000. <

There's a significant argument against this trend: Local governments might compete unfairly by having taxpayers subsidize the services. And the latest measure to hamstring local officials, Senate Bill 272, is promoted as an effort to ensure "a level playing field" among competitors. <

However, the problem the bill is supposed to solve doesn't exist. State law and accounting requirements enforced by the Public Service Commission already ensure, with few exceptions, that local governments and private service providers operate on a level playing field. As evidence, look at the state's long history of regulating municipal electric utilities alongside the major power companies. <

Rather than promote fair competition, the new bill would tilt against local governments. It would add requirements, with public hearings and cost-benefit analyses, that are clearly designed to discourage local governments from entering the market. <

The state should be sensitive to fair play in the marketplace. If a problem arises in the future, legislation narrowly crafted to solve the problem is worth considering. But SB 272 goes too far to encumber local governments and, consequently, to restrain competition. The bill should be defeated.