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Big Telecom Takes On Public Sector Competition

KUTZTOWN, Pa. (AP) -- Two years ago, this small college town thought it was blazing a trail for other Pennsylvania communities when it built a publicly owned fiber-optic network to deliver cut-rate Internet, telephone and cable TV service.

Then, in late 2004, Pennsylvania lawmakers bowed to the wishes of Verizon Communications Inc. and the state's other local phone providers, passing a bill that gives the companies the power to squelch any new forays into telecommunications by municipal governments.

The legislation, prompted by the companies' worries that other towns would follow Kutztown's example, marked the industry's latest victory in a series of similar clashes across the country.

Cities and towns from San Francisco to Philadelphia, viewing access to advanced telecommunications as pivotal to prosperity, are aggressively seeking ways to provide high-speed Internet connections, wired or wireless, for citizens and local businesses.

But telephone and cable TV companies have responded by flexing political and financial muscle at the state level, arguing that government has no business getting into their business.

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