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Supreme Smackdown on Municipal Telecom

In what could be a blow to the rollout of fiberoptics-to-the-home, the Supreme Court has ruled that states can stop cities and towns from going into the telecommunications business. The court upheld a Missouri law prohibiting municipalities from offering local…
March 25, 2004

In what could be a blow to the rollout of fiberoptics-to-the-home, the Supreme Court has ruled that states can stop cities and towns from going into the telecommunications business. The court upheld a Missouri law prohibiting municipalities from offering local telecom services. At least eight other states have similar laws to the Missouri one. The decision was a victory for SBC Communications and other local phone companies, which were supported by the FCC. In response to the 8-1 ruling, SBC (the country’s second-largest local phone company) issued a statement saying that local governments should focus their energies on foster ing competition among private communications companies, rather than becoming telecom providers themselves. The trouble, as Jeff Hecht reported on TechnologyReview.com in December, is that–particularly in rural areas–telecom companies have had their chance to provide technologically up-to-date service and have generally fallen short. In fact, while big telecom companies have dithered, municipal utilities in place like Grant County, WA, and Kutztown, PA, are pushing bandwidth-rich fiberoptics to the home.

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