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Cue the Lawsuits: FCC Moving to Block State Broadband Laws

The feds move to preempt state laws in the hope of encouraging more communities to build their own networks.


Federal officials are moving forward to preempt laws in two states that limit the ability of local officials to build broadband networks, a long-expected move that will likely spark a fight with state lawmakers.

The FCC is expected to approve two petitions later this month from officials in Wilson, N.C., and Chattanooga, Tenn., who have been barred from expanding their local broadband networks. North Carolina and Tennessee are among 19 states that have restrictions on local communities against building or expanding competitive broadband networks.

“Many communities have found that existing private-sector broadband deployment or investment fails to meet their needs. They should be able to make their own decisions about building the networks they need to thrive,” FCC Chairman Tom Wheeler said in a prepared statement.

The action is part of a broader effort by federal officials to address Americans frustrated by the increasing monthly cost of Internet service, especially while the quality sometimes doesn’t increase along with it.

Last week, the FCC upped the U.S. definition of broadband to 25 Mbps in an effort to push broadband providers to offer faster service. The agency is also expected to approve new net neutrality rules later this month which would re-regulate Internet lines and prohibit broadband providers from blocking or degrading Internet traffic, as well as ban them from offering fast-lane service to companies.

The move wasn’t a surprise, as FCC Chairman Tom Wheeler has made noises for more than six months that he was interested in preempting state laws that limit the ability of states to prevent local officials from building their own broadband networks. President Obama echoed those remarks earlier this month during his rollout of his State of the Union speech.

It also sets up a classic states’ rights debate over how much Washington should be able to step in and make decisions about what communities can do. Congressional Republicans have already been complaining about the move, and the states are expected to legally challenge the decision almost immediately.

Municipal broadband advocates — including President Obama — argue that locally operated networks can give consumers more choices for broadband or video service at lower costs. Communities often build the networks in areas where commercial broadband providers are unwilling to expand because it is unlikely they’d be able to profitably offer service. Some communities are also choosing to partner with companies like Google to build competitive networks in areas where traditional Internet providers already offer service.

States appear to have put restrictions on local communities from building municipal networks for two main lobby groups: Large Internet providers that aren’t interested in having more competition and lawmakers worried that taxpayers would be on the hook for millions of dollars if locally owned networks were to fail.

Critics of municipal broadband networks point at what happened in Provo, Utah, when local officials found themselves unable to profitably offer Internet service and sold their network to Google two years ago.

The FCC action will only apply to Tennessee and North Carolina, though it would “provide precedent” for possible future actions in other states, a senior FCC official said in a call with reporters Monday. FCC officials on the call declined to speak on the record.

Another senior FCC official said the agency expects states to challenge the decision, but the agency is “very confident” that it will prevail.

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