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Wheeler in Pre-emption Fight Over Muni Broadband Laws

WASHINGTON — Federal Communications Commission chairman Tom Wheeler is in for a fight when it comes to pre-empting state laws limiting municipal broadband.

Last week, a pair of Democratic legislators cheered on that effort, while the top aide to Republican commissioner Ajit Pai signaled his strong opposition.

For months now, Wheeler has said he believes the FCC had the authority and responsibility in “appropriate” circumstances to invalidate state laws he argues were the product of the incumbent ISPs lobbying against competition that could lower costs and improve services.

Cable operators have countered that governmentsubsidized broadband can leave taxpayers footing the bill for failed buildouts. Generally, cable operators don’t want government money used to subsidize competitors, arguing that incumbent providers could be driven from the market if they can’t make a business case for pricing the service competitively against a subsidized entrant.

It had been unclear for a while just when and how Wheeler would wade into the issue.

That was resolved when the cities of Chattanooga, Tenn., and Wilson, N.C., petitioned the commission to pre-empt laws in their states that they allege “restrict their ability to expand their broadband service offerings to surrounding areas where customers have expressed interest in these services,” the FCC said in announcing the petitions.

Municipal broadband advocates Rep. Mike Doyle (D-Pa.) and Sen. Ed Markey (D-Mass.) last week pushed the FCC to pre-empt.

“I strongly encourage [chairman Wheeler] and the FCC to take quick and decisive action to lift restrictions that limit or prevent communities from addressing their own broadband needs,” Doyle said in a joint statement with the senator.

Doyle and Markey released a letter from Wheeler that was in response to their inquiry about pre-emption. In it, Wheeler said any decision about municipal broadband would come after an open proceeding with careful analysis. But while he said he respected state governments, he also knew that when local laws conflict with “critical federal laws and policy,” they can be pre-empted.

Wheeler said he would not take the step lightly, but he clearly appeared ready to put his foot down. “Many states have enacted laws that place a range of restrictions on communities’ ability to invest in their own future, and there is reason to believe that these laws have the effect of limiting competition in those areas,” he said.

Matthew Berry, chief of staff to Republican commissioner Ajit Pai, said the FCC definitely doesn’t have the legal authority to pre-empt state broadband laws.

Berry, former FCC general counsel and a former law clerk to Supreme Court Justice Clarence Thomas, was speaking Wednesday morning to the National Conference of State Legislatures’ (NCSL) legislative summit in Minneapolis. Those are the legislators responsible the laws the FCC is eyeing for pre-emption.

“The debate at the commission is going be about a relatively narrow but critical question: Does the FCC have the legal authority to pre-empt state laws regulating municipal broadband?” Berry said, according to prepared remarks. “And the answer to that question is a resounding no.”

For its part, the NCSL has already told Wheeler that it would sue if the FCC tries to preempt state laws.

The FCC is eyeing authority under Section 706 of the Telecommunications Act to support pre-emption, which allows it to regulate to ensure that advanced telecommunications is being provided in a reasonable and timely fashion — the same authority proposed to support network-neutrality rules — but Berry suggests that is a reach that would exceed its legal grasp.