This paper provides a case study of existing policy barriers to local municipal information communications technology investments in one U.S. state, South Carolina. This analysis also describes local survey results to clarify the role of restrictive state policy on the incentives for local communities to make these investments. Initial interviews of state municipal leaders support the idea that the states legal interpretation of municipal responsibilities has likely constrained local telecommunications investments across the state. Survey results reveal that approximately one-third of local municipal leaders believe they are constrained by the state’s definition of the purview of municipal responsibilities. Even with these constraints, the overwhelming majority of respondents acknowledge the importance of these investments for community and economic development. Understanding the results of state barriers to telecommunications investment provides important insight into the nature of policy incentives and moreover, provides insight into how states and localities can change policy to encourage these investments.