FCC overstepped authority in muni broadband push, court says
- By Amanda Ziadeh
- Aug 12, 2016
A new court ruling could have big implications for local governments looking to expand city-owned broadband services – and for the commercial internet service providers that oppose them.
In a federal case that pitted the states of Tennessee and North Carolina against the Federal Communications Commission, the agency was overruled in its attempt to block state statues that restrict municipal broadband expansions.
Tennessee law authorizes any city operating an electric plant to offer broadband services, but only within its service area. So when Chattanooga’s municipal broadband provider, Electric Power Board, wanted to expand its service area, it was prohibited by state law and asked the FCC to step in.
Similarly, the City of Wilson, N.C., wanted to expand its fiber-optic backbone and created the Greenlight municipal broadband network, which offered all Wilson County residential customers gigabit internet -- contrary to the state’s Session Law that restricted those services.
Electric Power Board and the City of Wilson petitioned the FCC to block the restrictions imposed by their respective states. In February 2015, the FCC voted to preempt the laws in North Carolina and Tennessee that prevent municipal broadband providers from expanding outside their territories. The states subsequently sued to preserve their laws.
In its support of the municipal broadband providers before the court, the FCC cited Section 706 of the Telecommunications Act, which the FCC reads as giving it power to preempt barriers to infrastructure investment. It also claimed that expanding municipal-provided services into surrounding areas would increase investment in broadband internet and promote competition in the marketplace.
The FCC argued that Tennessee's restrictions constitute a barrier to broadband investment and competition, and that North Carolina’s Session Law and financial restrictions impede overall deployment of broadband services.
The Sixth Circuit Court of Appeals, however, said the agency is not authorized to promote broadband market competition by disrupting existing states’ laws. Additionally, the court ruled there is no federal mandate for municipal telecommunications providers to expand their geographic service areas and that the states had already made decisions governing that kind of expansion.
The ruling was hailed as a victory by internet providers that support state laws restricting municipal broadband networks that compete with commercial services. USTelecom, the association that represents the major ISPs , said the FCC should "concentrate on eliminating federal regulatory impediments to innovation and investment -- where there remains to be much that can and should be done."
Chattanooga’s Electric Power Board President David Wade said the ruling underscored the need for Tennessee lawmakers to develop a better way to expand high-speed broadband.
Amanda Ziadeh is a former reporter/producer for GCN.