A formal settlement that ends a lawsuit by CenturyTel against the city of Columbia should ease tension between the two over whether the city should provide fiber-optics service to local businesses.
The settlement, approved last week by the Columbia City Council, will suspend the issue until the U.S. Supreme Court reaches a decision on a larger, but similar case in its 2003-2004 session. The high court’s decision could affect the way many businesses nationwide choose their fiber-optics service and could decide whether cities would be able to compete as service providers.
In the local lawsuit, CenturyTel said the city violated state law by providing fiber-optics service to First National Bank. Under the settlement, the city will be allowed to continue that service but can enter into no similar agreements. The city would be able to enter other types of leases allowed by Missouri law, but would be obligated to notify CenturyTel so the company could raise any legal objections.
CenturyTel spokesman Don Neely said the struggle between the city and his company boils down to one of competition between cities and private telecommunications firms.
“The bigger issue is the ability of state legislatures (to allow) cities to enter the competition,” Neely said.
Fiber optics, or “dark fibers” as they are technically known, allow high-speed connections to the Internet and let groups or businesses establish local networks, also called intranets.
Even though the local lawsuit has been settled, a larger case involving the Federal Communications Commission and cities in several states is headed for the U.S. Supreme Court. Meanwhile, the Missouri Municipal League is challenging the state law that removed cities’ ability to provide telecommunications services to private businesses. The main cities the league represents in the matter are Columbia, Sikeston and Springfield.
“They provide electric, gas and water,” Bill Johnson, deputy director of the league, said of those cities. “It’s just another utility.”
Many public utilities across the country are providing fiber-optics service to local businesses, said Ben Johnston, electric distribution manager for the Columbia Water and Light Department. Johnston said it doesn’t cost much, and “we want Columbia to be a progressive city.”
CenturyTel and other telecommunications companies worry that cities can provide the service cheaper because they aren’t seeking a profit. “The city appears to be able to provide service at a lesser price,” Neely said.
While City Attorney Fred Boeckmann said he doesn’t think the city would compete heavily for fiber-optics customers, telecommunications companies don’t seem to want to take that risk.
Neely said the city is “jumping the gun” by offering its services to First National Bank.
Jim Stock, senior vice president at First National, said his company uses both city and CenturyTel services and plans to continue doing so. The city, he said, provides the fiberoptics necessary to link all eight of the bank’s Columbia branches — a service Stock says CenturyTel can’t match. CenturyTel, however, meets many of the bank’s other communication needs.