As we mentioned last fall, supporters of municipal operations formed a united front to attempt to stop efforts to ban or hinder such projects. Usually backed by private industry fearing unfair competition, roughly a dozen different states currently have laws on the books that either prohibit or hinder community supported broadband operations.

The battle for the right to provide service was taken to the Supreme Court - and even though it could determine whether or not many areas see service - it has been ignored by nearly every major media outlet. We've been informed by Muni attorney Jim Baller (see our past interview) that today the Supreme Court has ruled against the municipals in this case, giving states the right to ban muni-operations.

Our previous story outlines the legal history of the battle. Simply put, the Eighth Circuit and the DC Circuit were in disagreement over municipal rights. Today's decision (zipped pdf) overturns the ruling made by the Eighth Circuit court in favor of municipal operations.

These bans on municipal services generally spring up in any region where private industry feels threatened by a community looking to wire itself for broadband, whether funded by taxpayer money or not. Utah's half-billion dollar UTOPIA community fiber project was recently threatened by such Qwest supported legislation.

The latest hotbed of debate over the issue has been Wisconsin, where the state recently faced its 11th attempt in four years by incumbent backed lawmakers to ban municipal operations from providing service. SBC supported Senate Bill 272, like its ten predecessors, aims to "level the competitive playing field" between muni operations and their corporate brethren.

Baller argues that court rulings in relevant cases have recognized that such "apple to apple comparisons" between incumbents and new entrants are fundamentally impossible (see Insight Communications V. City of Louisville .pdf ruling).

According to Baller, such "Fair Competition" laws "are heavily biased in favor of the incumbents, which did not face similar barriers to entry when they got started and also had little or no competition." He points to analysis by Tom Hazlett, former chief economist of the FCC, which argues that such attempts at a level playing field usually result in greater benefit to the entrenched monopolies and "surprisingly asymmetric consequences".

Regardless of one's position, the Supreme Court ruling indicates such legislation will be increasingly common. Baller admits he's "dissapointed" about the ruling but still hopeful, noting that "a victory in Missouri case would have been helpful, but it is by no means the end of the road."

"We also hope that state legislators everywhere will realize that, without the involvement of local governments, our Nation cannot achieve our national goal of rapid deployment of truly advanced and affordable telecommunications services and capabilities to all Americans, including those in rural and high cost areas," says Baller.