Rob Thompson, a policy advocate for the North Carolina Public Interest Research Group who helped organize resistance to the bill, said municipalities were quick to realize how much the legislation would have hurt them. According to Thompson, it would have been a tough pill for local governments to swallow, considering a bill enacted last year that stripped localities of the authority to grant and receive revenue from video franchises.

In North Carolina and more than a dozen other states, video service providers seeking to enter new markets can bypass local governments by applying for statewide franchises. The lawmakers who have pushed such franchising plans have argued that they are good for consumers because they open markets to more competition.

But Thompson said North Carolina consumers are still waiting to see the benefits of the new statewide system. "I think people were reluctant to pass a municipal broadband bill like that this session because they knew that companies had failed to provide the new competition they promised to get the statewide franchising law," he said.

Under the bill approved this week by the state House Finance Committee, a committee will study for two years the "adequacy of coverage of communications services offered by current providers across the state." The North Carolina League of Municipalities noted that localities in the Tar Heel State already have invested more than $200 million in such projects.

The study group, which will include members from both chambers of the Legislature, also would be directed to analyze the effects of such networks on services offered by private companies.

Thompson said he already is worried that pro-business lawmakers on the review panel will affect what it reports back to the Legislature. State Rep. Drew Saunders, the primary sponsor of the anti-municipal broadband bill, is slated to be one of the panel's co-chairmen.

"I'm a little scared that when we come back in 2009, we'll be back where we started," Thompson said.