South Carolina has become the latest state in the union to pass a state-level bill that effectively makes it difficult, if not impossible, for municipalities to create their own publicly owned Internet service provider that could compete with private corporations. The bill passed the South Carolina General Assembly and Senate on Wednesday and awaits the signature of the state’s governor.

"It’s not an absolute ban, but it makes it pretty tough," Matt Wood, policy director at Free Press, a digital advocacy group, told Ars on Thursday.

Oddly, the bill also defines broadband as being "not less than one hundred ninety kilobits per second," which is pretty laughable by any measure. Municipal broadband watchers like Phillip Dampier also say that the bill’s passage shows the effective lobbying of AT&T, the state’s largest telco, who has contributed thousands of dollars in campaign contributions.

Lobbying from AT&T and conservative policy groups

Dampier and others also allege that the bill was crafted by the American Legislative Exchange Council (ALEC), a conservative think-tank that lobbies local, state, and federal representatives to push for bills and craft ideal draft legislation that are conducive to its values. On its website, ALEC says that cities should not be allowed to create broadband utilities in competition with private corporations.

"If municipalities are inclined to pursue broadband initiatives then certain safeguards must be put in place in order to ensure that private providers, with whom the municipality will compete with, are not disadvantaged by the municipality in the exercise of its bonding and taxing authority, management of rights of way, assessment of fees or taxes, or in any other way," the organization writes.

Public records show that in 2011, AT&T, itself an ALEC member, contributed $1,000 to the coffers of Michael Gambrell, South Carolina assembly member and lead author on the bill. Other sponsors of the bill, including Bill Sandifer, Bobby Harrell, and many of its supporters, also received donations from AT&T as well. Gambrell, Sandifer, and Harrell did not respond immediately to Ars’ request for comment.

AT&T has said previously that it has invested more than $125 million in the first half of 2011 to expand mobile and mobile broadband services across the state.

"The South Carolina bill is the typical reactionary knee-jerk response from the late telecom companies who can only compete by eliminating any hint of competition, rather than compete by offering a better product or service," wrote Craig Settles, a broadband industry analyst, in an e-mail to Ars on Thursday. "Unfortunately, as long as they wield truckloads of money and state legislators are willing to suck up that money, consumers and local businesses will have to continue fighting."

Many states face similar pressure

Other industry watchers note that similar battles are being fought in other regions of the United States.

"States have different ways to achieve the same end—discourage, delay, or derail public broadband initiatives," wrote Jim Baller, a telecom lawyer based in Washington, DC, in an e-mail to Ars on Thursday. He noted that similar bills were introduced in Minnesota and Georgia this year, the former of which has led to a "study bill," while the latter did not make it out of committee.

"In some ways, the South Carolina bill is worst of all because it does not grandfather existing projects and would retroactively undermine federal stimulus grants that Orangeburg and Oconee Counties have received," he added.

Matt Wood, policy director at Free Press, added that similar battles would likely continue for some time to come.

"The companies have literally armies of lobbyists in every state and are able to protect their incumbent position," he told Ars.