South Carolina has become the latest state to rule against allowing towns to set up their own broadband networks. A bill passed last week makes it much more difficult to set up a local, city-owned ISP that provides service of 190Kbps or greater. Critics say the bill, which is now awaiting signature by the governor, is an effort by carriers like AT&T to lock out competition. In North Carolina, for example, Time Warner Cable launched a year-long legal battle to shut down a municipal network that offered faster speeds than its own Road Runner service. Some have also alleged that the bill was written and lobbied for by ALEC, a conservative think tank of which AT&T is a board member.

ALEC and others, however, say that private companies could be unable to compete with locally-funded municipal broadband, which can rely on taxes, and that local solutions have "negative impacts on free markets and limited government." Recent stimulus programs have focused on expanding broadband access, either through company partnerships or independently, but the US still lags in total speed and availability, and cutting off a potential source of faster internet probably isn't going to help.