FCC votes 3-2 to override state bans of municipal broadband

The Federal Communications Commission on Thursday morning voted to push aside laws in two states that restrict municipalities from building out their local high speed broadband networks.

In a 3-2 vote, the FCC granted petitions from Chattanooga, North Carolina and Wilson, North Carolina that asked the agency to invoke its powers under Section 706 of the Telecommunications Act to “remove barriers” to infrastructure access.

The upshot is that the FCC has invoked federal power to pre-empt state laws that, according to advocates for the municipalities, were passed at the behest of big telecom companies.

While Thursday’s vote applies only to Tennessee or North Carolina, it will provide legal ammunition for towns in more than twenty other states that confront laws banning or restricting municipal-run broadband services.

The Democratic Commissioners who voted in favor of pre-emption used their platform at the hearing to call attention to towns across the country that lack basic broadband access because private companies won’t build it.

Commissioner Mignon Clyburn observed that millions of Americans are “trapped in digital darkness,” and can’t access high-speed internet service that would let them access telework and school services, especially during snow days.

The two Republican Commissioners questioned the legal authority of the FCC, under Section 706, to override the state laws, and raised concern about its effect on the private market.

“It’s not the government’s role to offer services instead of or in competition with private actors,” said Commissioner Michael O’Reilly, who likened town services to nationalization in Russia, Venezuela and Cuba.

Chairman Tom Wheeler, however, said the state laws were “thickets of red tape to limit competition,” and said the agency was cutting away that red tape consistent with Congress’s instructions to ensure a competitive broadband market. He also suggested that the Republicans were acting hypocritically by claiming to be in favor of broadband, while also throwing their lot in with those who want to restrict access to it.

Wheeler also called attention to Tennessee residents in the audience who lived within miles of Chattanooga’s super-fast gigabyte fiber network, but are stuck with slow internet service because state laws won’t let the city utility sell its service to them.

The municipal broadband issue is one of two major issues that the FCC is voting on today. Later on Thursday, the Commission will vote on the hot button net neutrality issue.

 

The FCC’s other big vote: small cities await their broadband fate

The big battle over net neutrality will go to a vote on Thursday but, for many people in small cities, it’s the other item on the agenda that matters most: whether the agency will allow two towns to build their own broadband infrastructure.

“It’s a way of letting local communities control their own fate. I don’t see a difference between broadband and gas or electricity,” said Harold DePriest, who is the CEO of EBP, a city-run fiber network in Chattanooga, Tennessee.

His city, along with Wilson, North Carolina (population 49,000), will soon find out if the FCC will grant their request to pre-empt state laws that restrict municipalities’ ability to offer broadband.

Those state laws are necessary, according to their supporters, to protect taxpayers from profligate city governments. Critics claim, however, that the laws are the result of undue influence exercised in state capitals by big telecom companies seeking to preserve their monopolies.

For places like Chattanooga, a lot rides on the outcome. The town’s fiber network, which offers 100 megabyte broadband for $58 a month and a gigabyte for $70, has led Chattanooga to brand itself as the “gig city,” where companies reliant on high speed internet can set up shop. It’s also about access.

“We feel this is an issue of local control. Here in Tennessee, we have homes that live in a digital desert,” said DePriest, who added that municipalities in many places have to step in when corporations fail to build the high-speed internet that is essential for modern business, education and entertainment services.

If the agency grants the petition at Thursday’s vote, Chattanooga and Wilson will immediately be able to expand their offerings. More significantly, a vote in favor of the petitions will provide legal footing to other towns across the country that face restrictions on municipal broadband.

In the case of Chattanooga, DePriest says the state law has led the city utility to be dragged into court five times at considerable expense. He hopes Thursday’s FCC vote will put a stop to this.

“I don’t like litigation. The only ones who win are lawyers, but this is too important for small town America, it’s worth fighting for.”

The vote will take place late morning EST. The cities are expected to prevail since FCC Chairman Tom Wheeler has indicated he is in favor of pre-emption. We’ll have an update on the outcome.

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.

46 Connecticut towns join push to be first US “gigabit state”

Dozens of Connecticut municipalities, representing half the state’s population, have signed on to a project that aims to dramatically increase broadband speeds to businesses and consumers through a series of public-private partnerships, officials announced on Thursday.

The project began in September when three Connecticut cities — Hartford, New Haven and Stamford — invited others to join a proposal that seeks to create a 1 GB network, in part by creating incentives for fiber network builders and internet service providers to improve internet infrastructure.

Now, a total of 46 towns are participating in what its boosters call an “effort for Connecticut to lead the nation as the first gigabit state.” The next phase is for private companies, including cable outfits and ISPs, to submit proposals of their own as to how to build out the network.

It’s too soon to say it if will work, but the goal of the project is to create a cluster of towns and institutions that will create an ultra-fast network, like the one in Chattanooga, Tennessee, across the middle part of Connecticut, which will in turn attract business and research.

According to Thursday’s announcement, the state and cities will not invest in the network fund directly, but will instead offer in-kind support through easy access to utility poles and other favorable regulatory policies.

The Connecticut project, which has received encouragement from FCC Chairman Tom Wheeler, comes as the role of states and cities in building out broadband is in the legal spotlight. Currently, towns in North Carolina and Tennessee have filed a petition asking the FCC to preempt state laws that restrict their ability build fiber networks.

The proponents of laws restricting state broadband projects claim their purpose is to protect taxpayers from boondoggles. Critics, however, point to evidence that such laws are passed at the behest of giants like AT&T, and serve to entrench corporate monopolies.

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