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

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.

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