Column: FCC Grants Petitions to Preempt State Laws Restricting Community Broadband

By Neil Ende, Managing Partner at Technology Law Group

In an effort to increase competition and coverage of broadband Internet service in their communities, Wilson, North Carolina and Chattanooga, Tennessee petitioned the FCC to preempt state laws that limit cities’ ability to build publicly-run broadband services. Tennessee passed a law forbidding cities from building high capacity networks beyond a certain geographic area.   In North Carolina, publicly run broadband carriers may not set their prices lower than the prices offered by private carriers.  These state laws limit Internet access services operated and sold by cities, making deployment of broadband in smaller companies extremely difficult and effectively blocking competition to the broadband services offered by large providers such as Comcast and Verizon.   Laws such as these are not unique to North Carolina and Tennessee.  20 other states have similar limits on Internet providers.

Section 706 of the Communications Act authorizes the FCC to promote the deployment of broadband services on a nationwide basis. These laws have become a national concern as they are limiting the available of affordable broadband across the nation.

As with many issues relating to broadband deployment and access, there is a wide gulf between the major political parties.  The Obama administration and the Democratic legislators generally favor measures that ensure the widespread and non-discriminatory availability of broadband services to all segments of the population.  Republican legislators are more hostile to policies favoring full net neutrality and to policies that would allow governmental involvement in providing broadband services.  President Obama weighed in on the issue, urging the FCC to take the steps necessary to remove state barriers that block competition in the broadband market.

In its Memorandum Opinion and Order, the FCC concluded that these state laws have the effect of improperly limiting the availability of broadband services.  On this basis, it preempted the enforcement of these laws as contrary to Section 706. In granting preemption, the FCC concluded that it would “speed broadband investment, increase competition and serve the public interest.”

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