An appeals court has told the Federal Communications Commission to take a hike on its attempt to allow government broadband networks to expand by preempting state laws.
In a unanimous opinion issued Wednesday, the three-judge panel of the U.S. Court of Appeals for the Sixth Circuit ruled in favor of the attorneys general of Tennessee and North Carolina. Those states filed the case after the FCC voted in February 2015 to block laws that prevent municipal broadband networks from expanding outside their territories.
The FCC argued it had that authority because Congress told it to remove barriers that prevent telecommunications competition in Section 706 of the Telecommunications Act of 1996.
The appeals court disagreed.
“The FCC order essentially serves to re-allocate decision-making power between the states and their municipalities,” the judges wrote. “This is shown by the fact that no federal statute or FCC regulation requires the municipalities to expand or otherwise to act in contravention of the preempted state statutory provisions.”
The judges wrote that such preemption by the FCC would require “a clear statement in the authorizing federal regulation,” but they ruled that Section 706 on which the FCC was banking “falls far short of such a clear statement.”
Berin Szoka, president of TechFreedom, said it “took enormous chutzpah” for the FCC to try to preempt those state broadband laws in the first place.
“This is a well-deserved rebuke for an agency run amuck,” he said. “It should have been obvious that the FCC would lose, since the Supreme Court rejected the idea that the FCC could preempt such laws over a decade ago — under far clearer statutory language. The court shredded the FCC’s claim that, while it could not require states to allow muni broadband, it could regulate the conditions under which they governed the networks that cities were allowed to build.”
FCC Chairman Tom Wheeler issued a statement on the ruling, noting that more than 50 communities have started developing their own broadband networks in the past 18 months.
“The efforts of communities wanting better broadband should not be thwarted by the political power of those who, by protecting their monopoly, have failed to deliver acceptable service at an acceptable price,” he said. “The FCC’s mandate is to make sure that Americans have access to the best possible broadband. We will consider all our legal and policy options to remove barriers to broadband deployment wherever they exist so that all Americans can have access to 21st century communications.”
About 20 states have laws limiting municipal networks from expanding outside current coverage zones. Lawmakers in some states, such as Alabama and Tennessee, have been trying to push legislation to change those laws. Free-market advocates say the laws should remain in place because they prevent governments, backed by plentiful accounts of taxpayer money, from suffocating private providers.
Wheeler said he’d back efforts in those states to expand government broadband.
“Should states seek to repeal their anti-competitive broadband statutes, I will be happy to testify on behalf of better broadband and consumer choice,” he said. “Should states seek to limit the right of people to act for better broadband, I will be happy to testify on behalf of consumer choice.”
Szoka said the litigation distracts from the main broadband issues the FCC needs to address: how to make deployment easier.
“The agency is less interested in actual progress than in making headlines and stoking a small fringe of activists who prefer government-run networks over private provision of broadband for ideological reasons,” he said. “The greatest irony here is that the real barriers to deployment come from local governments themselves, and the FCC could help identify ways to cut red tape, lower fees, and build smarter infrastructure that can facilitate deployment. That could encourage both upgrades from incumbents and new entry from companies like Google Fiber. In short, government-run broadband should be a last resort, not a go-to solution.”