FCC Chair says agency will nix state laws that block broadband

State laws that obstruct towns and cities from building their own broadband networks are likely to fall at the end of the month, as a result of an upcoming vote by the FCC slated for a public meeting on February 26.

“After looking carefully at petitions by two community broadband providers asking the FCC to pre-empt provisions of state laws preventing expansion of their very successful networks, I recommend approval by the Commission so that these two forward-thinking cities can serve the many citizens clamoring for a better broadband future,” said FCC Chairman Tom Wheeler in statement on Monday.

The upcoming vote concerns two cities — Chattanooga, Tennessee and Wilson, North Carolina — that filed petitions with the FCC last year to rule that state rules restricting their fiber build-outs are inconsistent with federal law.

A report in the Washington Post  this morning likewise said the FCC will act this month, and that it is set to intervene in favor of the cities:

Federal regulators are moving ahead with a proposal to help two cities fighting with their state governments over the ability to build public alternatives to large Internet providers. […]

The draft decision targets legal hurdles that make it more difficult for city- or community-run Internet services to get off the ground. Tennessee, for example, has passed rules forbidding cities from building high-capacity networks beyond a certain geographic area. Publicly run broadband in North Carolina may not offer service at prices below what a private carrier offers.

The FCC vote is directed just at the two cities in question, but the legal principle at stake means the vote will have large and immediate implications for the rest of the country.

More specifically, the issue is language in Section 706 of the Telecommunications Act that instructs the FCC to develop broadband by “removing barriers to infrastructure investment and by promoting competition in the telecommunications market,” and whether this gives the FCC power to preempt state laws.

FCC Chairman Tom Wheeler already hinted strongly last year that he thought it does, while President Obama voiced his support for the position last month.

If the FCC does vote to preempt the date laws, the move will almost surely trigger a court fight since municipal broadband is a contentious political issue.

Many Republicans argue that city broadband projects can hurt market competition and lead to taxpayer boondoggles. Cities, on the other hand, say they have no alternative but to build their known networks due to corporate monopolies, and point to systemic lobbying campaigns that AT&T and others have waged in state capitols to stop municipal broadband.

The outcome of any legal case is not clear-cut since courts have yet to rule on Section 706 in this context (you can read a full break-down of the preemption question here). Republicans have also said they will try to counter FCC preemption by passing new laws.

This story was updated at 3:15ET to include the Chairman’s statement.