Ars Technica has a steller report on the South Carolina state legislature’s recent passage of a bill that “effectively makes it difficult, if not impossible” for town and city governments to create their own municipal Wi-Fi networks — networks that are aimed at giving citizens taxpayer-funded, free-to-use Internet service. The two big powers behind the legislation, Ars reports, were AT&T and the American Legislative Exchange Council (ALEC), a group that creates corporate-friendly model legislation for state legislators to pass. ALEC’s primary objection to municipal Wi-Fi, it seems, is that it might compete with private Wi-Fi services and put the squeeze on incumbent carriers’ profitability.

“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 says in outlining its policy recommendations.

Jim Baller, a Washington, DC-based telecom lawyer, tells Ars that the South Carolina legislation is particularly restrictive of municipal Wi-Fi projects because “it does not grandfather existing projects and would retroactively undermine federal stimulus grants that Orangeburg and Oconee Counties have received.” Predictably, Ars notes that the bill’s author and many of its sponsors received donations from AT&T last year.

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