AT&T (NYSE: T) remains locked in a battle with Tennessee lawmakers over a proposed bill that could enable municipal broadband providers like Chattanooga-based EPB, which gained attention for its 10 Gbps FTTH services, to expand their gigabit fiber-based broadband services into other parts of the state where services are lacking.
Joined by local cable provider Comcast (NASDAQ: CMCSA), the crux of AT&T's argument against the proposed bill that's supported by Sen. Todd Gardenhire (R-Chattanooga) has been that enabling EPB and other municipal-based utilities to expand broadband service in the state gives them an unfair advantage.
"Don't fall for the argument that this is a free market versus government battle," Gardenhire said in a Chattanooga Times Free Press article. "It is not. AT&T is the villain here, and so are the other people and cable."
Access to broadband has been a key issue in rural areas of Tennessee such as Hamilton, Bradley and Marion counties. A number of supporters of the proposed pro-municipal broadband bill described how the lack of broadband services create a number of challenges such as not being able to properly run a business and the story of a 10-year old child who can't access education materials from her local school.
According to the Times Free Press, Tennessee House Speaker Beth Harwell (R-Nashville) told the National Federation of Independent Business-Tennessee that she doesn't expect the General Assembly will take up the issue this year after Gov. Bill Haslam's economic development officials announced they were initiating a study.
Daniel Hayes, an AT&T spokesman, said that taxpayers' funds should not be used to build networks that compete with privately-held telcos or cable operators.
"Generating significant amounts of public debt to sustain municipal networks is a different animal," Hayes said. "Taxpayer money should not be used to over-build or compete with the private sector, which has a proven history of funding, building, operating and upgrading broadband networks. Policies that discourage private-sector investment put at risk the world-class broadband infrastructure American consumers deserve and enjoy today."
The municipal broadband battle became a national issue in 2015 when the FCC voted along party lines to overturn elements of state laws in North Carolina and Tennessee that were designed to restrict municipal providers in these communities from providing broadband service outside of their current serving areas.
Earlier in the year, FCC Chairman Tom Wheeler was exploring the idea of preempting more than 19 state laws that prevent or discourage municipalities from building their own broadband networks.
Later, Tennessee filed a lawsuit challenging the FCC's ruling. The suit, which was filed in a federal appeals court, argued that states have an "inviolable right to self-governance," meaning that a state can rule whether a city or town can build and expand a municipal-run fiber network.
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