North Carolina Municipal ISP Cannot Operate Outside its Jurisdiction, But Could a CLEC Affiliate Do So?

Much of telecommunications regulation revolves around jurisdiction: which level of government, and which entities, have the right to regulate some particular part of the telecommunications business.

And, as always, every regulatory framework fundamentally shapes telecom services business models.

And all debates about the desirability of municipal-owned Internet access and communications set aside for the moment, the issue of which unit of government has the right to regulate the scope of operations for municipal communications networks now also includes the issue of whether a municipality can serve customers outside its jurisdiction.

So it is that a municipal Internet access service in Wilson, N.C., which also has been serving customers outside its jurisdiction, will have to shut down those out-of-district operations.

Ignore for the moment the long-standing dispute about appropriateness of local government competing with private firms able to supply services or performance of private firms in that regard.

The latest issue is that, where lawful, can municipal service providers operate outside their jurisdictions? At the moment, the answer seems to be “no.” What remains unclear is whether a separately-constituted “competitive local exchange carrier” could do so, if that CLEC is owned by a municipality.