Appeals Court Strikes Down FCC Attempt To Eliminate Protectionist State Broadband Laws

from the you-can't-build-it,-and-they-won't-come dept

Wed, Aug 10th 2016 1:04pm — Karl Bode

For years we've discussed how incumbent broadband providers protect their duopoly by writing and lobbying for awful protectionist state laws. These laws, passed in nineteen different states, either significantly hamstring or outright ban towns and cities looking to build their own networks, or strike public/private partnerships with companies like Google Fiber. In most instances, these towns and cities only jumped into the broadband business after being under-served for a decade -- if they were able to get broadband in the first place.

While it was overshadowed by the net neutrality vote at the time, back in February the FCC voted 3-2 to try and take aim at the most restrictive parts of these laws. The FCC argued that it could use its authority under Section 706 of the Communications act -- which requires the FCC to ensure "reasonable and timely" deployment of broadband access -- to pre-empt these restrictions working in contrast to that goal. But North Carolina and Tennessee quickly sued, arguing that preventing them from letting AT&T and Comcast write awful state laws violated their state rights.

In a huge blow to the FCC, the US Court of Appeals for the Sixth Circuit (pdf) has ruled that the FCC's pre-emption of these state restrictions must be reversed, because Section 706 doesn't clearly provide the FCC with the proper authority. While the FCC may have been well intentioned, all three Judges noted that the law simply doesn't give the FCC the authority to strip out chunks of state law:

"Section 706 does not contain a clear statement authorizing preemption of Tennessee’s and North Carolina’s statutes that govern the decisions of their municipal subdivisions. Section 706(a) instructs the FCC to utilize “measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.” Subsection (b) is a similar but broader instruction—it directs the FCC to “remov[e] barriers to infrastructure investment and . . . promot[e] competition in the telecommunications market."

The ruling continues, reiterating that the Communications Act language is simply too murky to be applied by the FCC in this fashion:

"Remove barriers to infrastructure investment” is unclear regarding whether it applies to public and private infrastructure investment or only private infrastructure investment. “Infrastructure,” by itself, is not specific to the public sphere. Furthermore, nowhere in the general charge to “promote competition in the telecommunications market” is a directive to do so by preempting a state’s allocation of powers between itself and its subdivisions."

While the FCC may have gotten too creative under the scope of the law, the end result of the ruling is unfortunate all the same.

For more than a generation, phone and cable companies like AT&T and Comcast have all but owned many state legislatures, who in turn make it their unrelenting mission to protect regional, geographical monopolies (duopolies, if you're "lucky") from any evolution or competition whatsoever. And while Tennessee and North Carolina were quick to breathlessly accuse the FCC of violating states rights, state leaders haven't been concerned in the slightest that letting AT&T and Comcast write bad state laws consistently hurts consumers, businesses, and the state itself.

Tennessee remains a broadband backwater for just this reason, so this shouldn't be a ruling anybody in the state (or in policy circles) is popping champagne corks over. It remains unclear what the FCC will do now, though in a statement FCC boss Tom Wheeler said he intends to continue fighting these restrictions, one way or another:

"In the past 18 months, over 50 communities have taken steps to build their own bridges across the digital divide. 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. 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.

"Should states seek to repeal their anti-competitive broadband statutes, I will be happy to testify on behalf of better broadband and consumer choice. 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."

The agency could appeal, could try its luck in a different jurisdiction and hope for better results, or it could wait on Congress to properly give it the authority it needs to fight broadband corruption and dysfunction of this type (chortle, guffaw). Unfortunately for consumers, Wheeler's running out of time if, as tradition encourages, he's going to step down with the election of a new President. While we wait, the onus once again rests squarely on the shoulders of voters to be informed, and to kick cash-compromised telecom sector sycophants out of office.

Usca-Opinion-15-3291-10aug2016 (PDF)Usca-Opinion-15-3291-10aug2016 (Text)

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Filed Under: 6th circuit, broadband, competition, fcc, municipal broadband, preemption, state laws

24 Comments

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GrooveNeedle (profile), 10 Aug 2016 @ 1:45pm

Shoulders of Voters?
Who do you vote for if the only ones running are "cash-compromised telecom sector sycophants"?
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Anonymous Coward, 10 Aug 2016 @ 2:11pm

Sad but kinda expected
While I concur that the fcc was trying to filtering it's mandate, they did over step what they could do. However, the ftc should be the one fixing this issue.
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Uriel-238 (profile), 10 Aug 2016 @ 2:41pm

"
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Anonymous Coward, 10 Aug 2016 @ 2:43pm

Screw tradition, Wheeler should stay put until he's told he's being replaced. He's the first person running the FCC in my lifetime that is actually doing his damn job and not kissing corporations asses letting them get away with anything and everything they want to do.
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Uriel-238 (profile), 10 Aug 2016 @ 2:53pm

"North Carolina and Tennessee quickly sued..."
What's important is which officials filed the legal suits in the names of North Carolina and Tennessee, because I bet the lawsuits against the FCC were not demanded by referendum of the people of these respective states.

As has been discussed recently, The United States is no longer a nation of laws. And we've only been pretending it was for some time. Instead, it is a nation of titles with power without oversight (or at best with dubious oversight). The responsibility for these protectionist challenges to FCC regulation rests neither on the state as an entity, nor the people represented by the state, but the officials that hold the power, who really answer to no-one.

Doubtless these officials have been enriched by those interests best served by protectionist laws, namely cable and AT&T.
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JoeCool (profile), 10 Aug 2016 @ 4:50pm

Re: Shoulders of Voters?
Exactly. Big Business learned this lesson well over the last few decades - buy BOTH parties and it no longer matters who wins, you still own the victor. Other than one or two exceptions, Big Business owns everybody in politics above the local level, and then only if the town is small enough they don't care. Don't forget when Chris Dodd chastised the PRESIDENT for not staying bought.
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JoeCool (profile), 10 Aug 2016 @ 4:55pm

Re: Sad but kinda expected
The same FTC that now allows fine print on TV so small it can't be read on a 70" HDTV? That flashes on-screen for less than a second? That FTC?

They've gotten so bad at holding companies to "truth in advertising" that most companies no longer even bother with fine print.
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Anonymous Coward, 10 Aug 2016 @ 7:15pm

So comcast can write laws, but the fcc cant?
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Anonymous Coward, 10 Aug 2016 @ 7:22pm

Why bother when they can just buy advertising on TD?
IOW, check your shit. There is malware coming out of your site right now.
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Arkab, 10 Aug 2016 @ 7:41pm

Re: Re: Sad but kinda expected
FTC = For The Corporation
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Anonymous Coward, 11 Aug 2016 @ 6:13am

This one smells of corruption up one side and down the other. When do I get my government sanctioned monopoly? The lawyers aren't done with this one, not by a long shot. Just remember, they drew first blood.
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DannyB (profile), 11 Aug 2016 @ 7:31am

What would happen without protectionist laws?
Can you imagine the negative effect it would have on the size of executive bonuses if effective competition were allowed by anyone who is not primarily motivated to provide the worst possible service at the highest possible cost? And only provide acceptable service at very high cost.
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The Deliverator, 11 Aug 2016 @ 7:49am

Federalism in action
"We are outraged, outraged I tell you, that the big bad feds think they can just trample all over the autonomy of the next jurisdiction down the food chain. How 'bout you big-government bullies stop picking on people smaller than you and let the states trample all over municipal and local autonomy in peace?"
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TruthHurts (profile), 11 Aug 2016 @ 8:37am

Simple Fix...
Tie all government funding to the removal of the State's protectionist laws.

Oh, so sorry, I see you have laws that don't allow competition for phone, internet, cable and cellular services in your states.

Damn, and here we had several billion dollars that we were going to give you to help fund whatever projects you'd like to spend it on.

Better luck next year.
Perhaps you should ask BigCorp for more money to cover your sudden budget shortfalls. lol Good luck on that.
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TruthHurts (profile), 11 Aug 2016 @ 8:39am

Re:
No, they can't. They don't have a big enough budget to out-spend BigCorp.
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TruthHurts (profile), 11 Aug 2016 @ 8:41am

Re: "North Carolina and Tennessee quickly sued..."
Whoa there uriel, just hold your horses for cotton picking minute.

Let me correct that thar statement you made.

"who really answer to no-one."

Obviously, while vexed, you clearly forgot that they do in fact answer to someone.

That someone is BigCorp. You know, the company that paid them to sue the FCC...
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TruthHurts (profile), 11 Aug 2016 @ 8:43am

Re: Re: Re: Sad but kinda expected
Close.

You do know that the SCotUS declared that corporations were people.

Now, whenever the laws say "for the people", it clearly only means "for the corporations".

Jump onto the "move to amend" bandwagon if you'd like this to change.

movetoamend.org
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Ed (profile), 11 Aug 2016 @ 8:43am

Hopefully, Marsha Blackburn is stabbed in the heart with a wooden stake (politically speaking) so her AT&T sucking will cease to be a plague upon Tennessee and the rest of the country. The AT&T jizz can be seen dripping from her maw every time she speaks publicly.
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Anonymous Coward, 11 Aug 2016 @ 8:46am

Just a thought, but if the State can tell the Federal government to keep out of their business, why can't the towns tell the state to stay out of their business?
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Whatever (profile), 11 Aug 2016 @ 11:12am

Of course the court did
The court did it not because it's a good or bad idea, but because it's a huge and almost unimaginable attempt by the FCC to "take over" control and oversight of internet service providers.

My assumption is that Wheeler has realizes that, given a short to medium amount of time, that pretty much everything the FCC current regulates will have gone onto the net. Telephones, TV, radio, "cable tv"... it's all moving to a more singular, IP network driven world. At some point, the FCC will no longer have anywhere near as much control over things as they do now.

Trying to jump in front of the "internet problem" seems to be more about self perpetuation, rather than anything else.

Where do you think Wheeler will end up working when his time expires at the FCC? I'm thinking Comcast.
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That One Guy (profile), 11 Aug 2016 @ 11:25am

Re:
I believe they tried that in one state, basically held a multi-city vote to ignore the paid-for monopoly law the state had in place. Can't off-hand remember the details and how that worked out ultimately, though given it stood to upset the cozy (and profitable)relationship between those buying the laws and those passing them I imagine the state was less than pleased.
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Uriel-238 (profile), 11 Aug 2016 @ 12:22pm

Companies outspending the government
The same thing has already happened with big fast / junk food outspending government nutrition programs and big tobacco and alcohol outspending government health and medical non-profits.
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Uriel-238 (profile), 11 Aug 2016 @ 12:24pm

Re: Re: "North Carolina and Tennessee quickly sued..."
To be pedantic about it, then they answer to the highest bidder... or the guys with the most guns and outrage.
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Stoatwblr (profile), 17 Aug 2016 @ 2:15pm

Re: "North Carolina and Tennessee quickly sued..."
The golden rule applies: "He who has the gold writes the rules"

Investigations into the financials of PUC officials and politicians (and their families) would go a long way towards keeping them honest.
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