FCC Releases Muni Pre-emption Order

The Federal Communications Commission was in full release mode Thursday (March 12), following its online posting of the final Open Internet order with the final order on pre-empting Tennessee and North Carolina laws limiting municipal broadband. Both were adopted on straight, and contentious, party lines Feb. 26. ().

The FCC majority said the agency had the power and the duty to step in when states were limiting broadband buildouts. The commission confirmed it did not have the power to overturn state laws preventing municipal broadband buildouts, but if those states allows such networks, the FCC can pre-empt laws that would limit them.

FCC chairman Tom Wheeler has tabbed those laws as the handiwork of incumbent Internet service providers trying to prevent competition.

The order grants the petitions by the Electric Power Board of Chattanooga, Tenn., and the City of Wilson, N.C., "to pre-empt certain challenged provisions of Tennessee and North Carolina law restricting municipal provision of broadband service."

The pre-emption only applies to those two cities, but others are expected to follow suit, and Wheeler has conceded this decision provides guidance on what the FCC would do with similarly situated municipal networks.

"We conclude, contrary to the thrust of some commenter claims, that pre-emption will remove barriers to overall broadband investment and promote overall competition in Tennessee and North Carolina," the order states, adding: "We conclude that the Tennessee and North Carolina laws are barriers to broadband infrastructure investment and that pre-emption will promote competition in the telecommunications market by removing statutory barriers to such competition. In other words, we find that removal of such barriers would likely result in more overall broadband investment and competition. We next turn to considering our statutory authority to act."

The FCC is justifying the move under its Sec. 706 authority to regulate if it concludes that advanced telecommunications is not being deployed in a reasonable and timely manner, which it has concluded in its recent reports to Congress on the state of high-speed broadband. "We read section 706 to permit the commission to preempt state laws that primarily serve to regulate competition in the broadband market," the order states.

The order points out that the FCC has taken other pre-emption actions to further competition, including state laws on deployment of wireless facilities or restrictions on competitive cable franchises.

Critics of the decision have 30 days after publication of the just-released final order in the Federal Register to either petition the FCC to reconsider the decision or take it directly to court. Look for one or both to happen.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.