WILSON, N.C. — The city of Wilson's launch of the state's first citywide broadband network in 2008 set it in the center of a legislative battle that continues to roil the competitive market.

The battle started before the city started selling high-speed, fiber-optic Internet, cable and phone service through Greenlight in the summer of 2008. Cable industry leaders contend government owned and operated systems undercut private competition because the city doesn't pay taxes and has the ability to secure bonds to build the system.

City leaders, as well as other supporting municipalities across the state, say local government should be able to have the latest technology to compete in a global economy, lure and retain business, and improve the quality of life for residents.

"The city council realized that it would be a very competitive world to attract and retain the best jobs in the future," said Grant Goings, Wilson city manager. "Well, you can't talk about jobs without talking about the infrastructure that brings them and keeps them. Short and simple advanced broadband is critical infrastructure."

The city of Wilson invested an initial $28 million to build its fiber-to-the-home broadband system and owed a debt principal of about $32 million as of late 2010, according to city officials.

The city's battle started in the legislature in 2007, close to a year before Greenlight went online in Wilson. Four bills have been introduced in an effort to have state law define how and if government should provide broadband service. The latest of those bills was introduced in February and is currently under review by the House Finance Committee. This week, the committee voted to exempt Wilson and other cities with existing communication networks - currently only Salisbury - from the bill. The N.C. Cable Telecommunications Association, which represents companies such as Time Warner Cable, Suddenlink and Piedmont Communication Services, wants the state to address how government and private business compete.

"I am confident, at some point, that the state law will address this," said Marcus Trathen, an attorney with the association. "We have never said that cities should be prohibited. If they compete, they should be subject to the same rules as private companies."

The latest bill prohibits cities from subsidizing the cost of broadband networks.

Wilson and the city of Salisbury have the highest-speed Internet networks in the state built with fiber-optic technology. This year, Wilson signed on its first 100 megabits per second residential customers and is the first to have residents using the highest speeds available in North Carolina, said Brian Bowman, Wilson public affairs manager.

Twenty-six states have laws that regulate or prohibit government providing telecommunications services, including cable and broadband, Trathen said.

"It's a big concern to private companies to be faced with competition by the government," Trathen said. "They don't pay taxes and they cross-subsidize. Our economy is built around the free enterprise system. Government shouldn't be competing with private companies."

The growing interest of North Carolina cities is part of a larger movement toward municipal broadband. Wilson city leaders see their battle as having implications beyond Wilson.

"We have never believed Time Warner's fierce battle was about Wilson," Goings said. "Frankly, they have 15 million customers or something in that range. They're not concerned about the 5,000 customers Greenlight has, but there is a growing national precedent. There will be two cities in North Carolina, and within a couple years, there will be a half a dozen.

"There are a lot of days that I wish we were second or third but we, I think, have to be the example. They would like us to be an example of a failed attempt because of the national implications."