Bill to Curb Munis Winds Through Wisc.

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A bill restricting municipal cable overbuilds in Wisconsin — which passed the state Senate 23-8 in November — is making its way through the legislature.

Currently, 28 Wisconsin cities have been certified as local exchange carriers, said Wisconsin Cable Communications Association executive director Tom Hanson. But to date, only one locality — Reedsburg — has launched a cable system.

The cable operators are working with the Wisconsin State Telephone Association, which counts nearly 100 members, and SBC Communications Inc., to push for the bill.

Persuading lawmakers that they need the ability to bring broadband to unserved communities will be a "very tough sell" for the cable industry, said Hanson.

"We can't find any [unserved areas]," Hanson said.

The bill dictates that if a community qualifies to move into telephone businesses, it may not use its municipal tax benefits to undercut the rates of an incumbent.

The bill has progressed even as the U.S. Supreme Court hears a case on states' role in municipal telecom regulation.

The high court has agreed to hear a challenge to a Missouri law banning cities from commercial telecommunications ventures.

In 2001, the Missouri General Assembly passed a measure preventing cities and municipal utilities from obtaining the certificates of necessity required of ventures that wish to become telecommunications providers.

Lower courts upheld the new law. Section 253 of the federal Cable Act prohibits laws that become a barrier to entry to "any entity," but the lower courts said cities don't fit into the definition of an "entity."

Late in November, the lawyers for the Federal Communications Commission, Southwestern Bell Telephone L.P. and the Missouri state Attorney General filed their reply comments in the case.

The FCC and Southwestern Bell stressed that Section 253 should not be interpreted as a pre-emption of a state's authority in the matter, as the bill has no specific language on states' roles.

On the other side of the dispute, Missouri's top lawyer argues that Congress does not have unlimited power to expand the authority of state "subdivisions," adding there are pro-competitive reasons for municipal telecommunications operations that are not addressed in legal precedents cited in the dispute.

Oral arguments in this case are scheduled for Jan. 12.

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