As expected, the Federal Communications Commission voted 3-2 Thursday (Feb. 26) along party lines to pre-empt state laws in Tennessee and North Carolina that limit expansion of municipal broadband, citing its authority under the Sec. 706 mandate to insure advance telecommunications services are being deployed in a reasonable and timely manner.
The order pre-empts geographic limitations on the expansion of municipal broadband systems in Chattanooga, Tenn., and Wilson, N.C., though it does not compel any action on either. The decision does not affect laws in other states, but signals how the FCC might act on similar petitions, which are expected from other municipal broadband providers now that the FCC has fired this shot across the bow at state broadband laws.
The cities of Chattanooga and Wilson asked the FCC to pre-empt their limiting state laws, saying that without those restrictions, they are willing and able to expand their gigabit service to surrounding neighborhoods that had asked for it.
The state laws prevented expansion beyond the footprints of the utilities that are providing the broadband service, or as the FCC Wireline Bureau said, to a "sea of little or no" broadband options. The bureau said the decision was simply letting communities serve their neighbors.
The bureau pointed to the FCC's recent 706 finding that advanced telecom was not being deployed in a reasonable and timely manner, and the section's instructions to act immediately to try and rectify that.
Democratic Commissioner Jessica Rosenworcel, who enthusiastically supported the decision, likened municipal service to a broadband barn raising, an analogy that pleased FCC chairman Tom Wheeler. Commissioner Mignon Clyburn was also strongly supportive.
"Today’s vote seeks to draw a line in the sand once and for all by removing barriers to deployment and fostering competition consistent with the FCC’s core mission and values," Clyburn said.
"For scores of Americans the choice of one, let alone multiple broadband networks, is a dream deferred, and the promise of universal access remains un-kept," she added, leaving many in "digital darkness."
Clyburn pointed out that at one time both Republicans and Democrats supported bills to "block states from restricting local governments’ ability to provide Internet service," notably, the Community Broadband Act of 2005. She also noted that essentially the same bill has been reintroduced, this time by Democrats only. "The only thing that has changed is the lack of bipartisan support."
Commissioner Ajit Pai dissented from the decision, saying flatly that the FCC did not have the authority to pre-empt. He called the decision unlawful and odd.
"Judicial precedent makes clear that the FCC simply does not have the power to do this," Pai said. "In taking this step, the FCC usurps fundamental aspects of state sovereignty. And it disrupts the balance of power between the federal government and state governments that lies at the core of our constitutional system of government."
Pai said he was not taking any position on any municipal broadband project, but was simply saying -- though in a lengthy dissent -- that the FCC did not have the authority to do what it was doing, and dissented.
"The FCC does not have the legal authority to override the decisions made by Tennessee and North Carolina," he said. "Under the law, it is up to the people of those two states and their elected representatives — not the Commission — to decide whether and to what extent to allow municipalities to operate broadband projects. Today’s order is therefore unlawful."
Fellow Republican commssioner Michael O'Rielly, in his stinging and lengthy dissent, called the FCC's reading of Sec. 706 authority distorted and said the agency was using it arrogantly to rewrite state laws; that the decision was legally infirm and bad public policy; that the overly broad restrictions would pre-empt voting requirements and meeting requirements; that the order was hostile to states; that it seemed no restriction would seem to survive the FCC's "unvarnished skepticism"; and that an unintended consequence could be that states pre-empt municipal broadband altogether rather than limit it, since the FCC has recognized it can't pre-empt those laws, only ones that limit it once it is allowed.
Additionally, O'Rielly said the FCC appeared to be using Sec. 706 as carte blanche for regulation.
Wheeler, in his statement on the item, said it was a broadband truth that you can't say you are for broadband and then turn around and endorse limits on who can offer it and you can't reduce barriers to broadband investment and then erect them. That dog won't hunt, he said.
He said the states have authorized municipal broadband, then tried to limit it. The FCC's decision, he noted, was to cut through that red tape in these two specific instances.
But Wheeler also said he hoped it put a spotlight on an ongoing effort to put restrictions on what elected officials can do, and he called out out the "activities of incumbents to block consumer choice and competition through legislation" and the "thickets" of red tape meant to discourage competition.
The chairman also pointed to various audience members who he said had various issues with state limits on expanding gigabit muni broadband -- such as lack of access, kids having to drive elsewhere to get homework online and businesses moving. He said the decision is pro-broadband and pro-competition.
House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Communications Subcommittee Chairman Greg Walden (R-Ore.) said the FCC should leave the preempting to Congress.
“Preemption of state law is a limited power reserved to the U.S. Congress," they said. "Today’s 3-2 vote is as disappointing as it ispredictable with this commission where political victory is so often put ahead of the rule of law and the economy’s best interest. The FCC should respect the decisions of each state - whether to allow their municipalities to build out broadband networks or not. A one-size-fits-all approach from unelected Washington bureaucrats prevents states and municipalities from making the tough choices to allocate precious taxpayer dollars.”
Like the Title II vote that is to follow Thursday, the municipal broadband decision is expected to be challenged in court, and a bill has already been introduced to block the FCC preemption and any similar effort.
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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.