By Eric Boehm | Watchdog.org
MINNEAPOLIS – A coalition of governors on Friday told the Federal Communications Commission it shouldn’t involve itself in a dispute between state and local governments over construction of municipal broadband networks.
The National Governors Association filed a letter with the FCC warning of “unintended consequences” that could arise if the feds decide to overturn state laws banning the expansion of municipal broadband networks in North Carolina and Tennessee. The organization said doing so would run afoul of federal laws and executive orders that prevent the FCC from overturning those municipal broadband bans.
It would also put taxpayers at risk by removing an important check on cities’ ability to waste money on municipal broadband projects.
“Building those networks and maintaining them are expensive and those costs raise the risk of financial default by local government, the diversion of resources from other priorities or other negative outcomes such as credit downgrades,” wrote Dan Crippin, executive director of the NGA.
The cities of Wilson, N.C., and Chattanooga, Tenn., have petitioned the FCC to overturn state-level laws that limit the cities’ ability to expand current municipal broadband service. The local governments say they want to grow the taxpayer-funding, public Internet access to compete with Internet giants like Comcast.
Essentially, they are asking their biggest brother — the federal government — to back them up in a fight with their bigger brothers in state government.
The FCC is considering the move and is currently taking feedback from interested parties.
In the letter submitted Friday, the NGA said the FCC didn’t have the legal authority to override state laws. The association cited the 1996 Telecommunications Act, which prohibits the FCC from preempting state laws without permission from Congress, and an executive order signed by President Obama in 2009 placing limits on when and how federal agencies could wade into legal battles between states and local governments.
“There is a legal distinction between laws that are unconstitutional from those that some factions do not support. The tool to address the latter is the ballot box,” wrote the NGA.
Nevertheless, FCC chairman Tom Wheeler has said he believes the FCC has the authority to preempt those state-level bans, as Watchdog.org has previously reported.
Responding to a letter sent by a number of Democratic senators and congressmen in June, Wheeler wrote in August that state laws banning municipal broadband “limit” competition in the broadband space.
“I respect the important role of state governments in our federal system, but I know that state laws that directly conflict with critical federal laws and policy may be subject to preemption in appropriate circumstances,” said Wheeler.
Internet providers like Comcast and Time Warner also oppose FCC intervention, mostly because municipal broadband networks compete with them for subscribers.
But exactly how much competition they offer is pretty debatable. Municipal broadband networks have been fraught with problems.
One Minnesota city is losing an estimated $900,000 annually as it continues struggling to get its municipal broadband service off the ground, as Watchdog.org has also reported.
Those kinds of boondoggles are among the reasons 21 states have banned municipal broadband. Action by the FCC could effectively remove those bans.
Municipal broadband is an Internet service owned by local governments, and progressive tech policy analysts see it as a way to bring high quality Internet service to areas not viable for private Internet service providers. They argue that Internet should be handled like a public utility.
When it comes to the dispute between states and local governments, a collation of left-leaning groups has told the FCC an exercise of federal power over the states will, in fact, restore local authority.
“The FCC is tasked with ensuring high speed access is expanded to all Americans on a reasonable basis and to remove barriers to broadband deployment,” the groups wrote in comments submitted to the FCC last month.
Critics say municipal broadband is another example of government trying — and sometimes failing — to offer a service that is better handled by the private sector.
Preemption of state laws by the federal government doesn’t protect local authority, but rather makes cities unaccountable to taxpayers, argues Seth Cooper of the Free State Foundation, a Maryland-based free market think tank.
Boehm can be reached at EBoehm@Watchdog.org and follow @EricBoehm87 on Twitter for more.