FCC declined Fri. to preempt Mo. law (HB 620) that prohibits poli...

state but rather appeared to prohibit restrictions on market entry that apply to independent entities subject to state regulation. Acting on preemption petition filed by Mo. Assn. of Municipal Utilities, City Utilities of Springfield and others, Commission said that if municipally owned utility sought to provide telecom service or facility as independent corporate entity that was separate from state, “we could reach a different result under Section 252(a).” Mo. municipalities argued that even if Commission were correct in concluding that Congress didn’t clearly intend to include municipalities that didn’t own and operate electric utilities within scope of Sec. 253, Congress did clearly intend term “any entity” to apply to power companies owned by municipalities. As it found in Texas Preemption Order, FCC said, “any entity” was not intended to include political subdivisions of state. Commission urged states to refrain from enacting absolute prohibitions on ability of municipal entities to provide telecom service. Municipally owned utilities have potential to become major competitors in telecom industry, it said, and their entry could further goal of Act to bring benefits of competition to all Americans, particularly those living in small or rural communities. As for concerns of taxpayer protection from economic risks of entry and possible regulatory bias that municipalities’ entry raise, Commission said such issues could be dealt with successfully through measures that were much less restrictive than outright ban on entry. For instance, there could be nondiscrimination requirements that require municipal entity to operate in manner that’s separate from municipality, “thereby permitting consumers to reap the benefits of increased competition.” FCC also rejected municipalities’ contention that even if municipally owned utilities were political subdivisions of state, legislative history of Sec. 253 (a) demonstrated that Congress clearly intended “any entity” to cover municipal electric utilities. “Other than indicating that municipal energy utilities may make their facilities available to carriers, the legislative history that the petitioners cite does not distinguish between publicly owned and privately owned utilities,” Commission said. In joint statement, FCC Chmn. Kennard and Comr. Tristani said they voted reluctantly to preempt petition because they believed “HB- 620 effectively eliminates municipally owned utilities as a promising class of local communications competitors in Missouri.” Commission was constrained in authority to preempt by decision by U.S. Appeals Court, D.C., City of Abilene, and U.S. Supreme Court’s decision in Gregory v. Ashcroft, they said. Referring to letters from many members of Congress that said it was intent of Congress when it enacted Sec. 253 to enable any entity, regardless of form of ownership or control, to enter telecom market, they urged Congress to consider amending language in section to clearly address municipally owned entities. In separate statement, Comr. Ness urges states to adopt less restrictive measures, such as separation or nondiscriminatory requirements, to protect utility ratepayers or address any perceived unfair competitive advantage.