Municipal Broadband Pre-emption Petitions Seen to Get Close Attention from Industry, Advocates
The petitions that Chattanooga’s Electric Power Board (EPB) and the city of Wilson, North Carolina, filed Thursday seeking FCC pre-emption of state laws restricting municipal broadband deployments (CD July 25 p18) give FCC Chairman Tom Wheeler a definitive reason to examine pre-emption, industry participants and observers told us in interviews. Industry is likely to closely watch the FCC’s examination of the Chattanooga (http://bit.ly/1kZ4lM6) and Wilson petitions (http://bit.ly/1kZ54gc), and those petitions will likely have implications for the limits of the FCC’s authority under Communications Act Section 706, observers said. The FCC has been deciding how to pursue pre-emption after Judge Laurence Silberman of the U.S. Court of Appeals for the D.C. Circuit said in a separate opinion in Verizon v. FCC that Section 706 could allow the commission to examine state municipal broadband laws as a barrier to competition. Industry observers have been split on the pre-emption issue (CD Feb 24 p1).
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The petitions were filed before the FCC could act through a notice of inquiry (NOI) or rulemaking, so the upcoming process will provide a better sense of the FCC’s legal analysis of the issue, said Christopher Mitchell, director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance. Wheeler said last month that there were “multiple pathways” for dealing with pre-emption, including an NOI, NPRM or responding to a petition (CD June 16 p15). An FCC spokesman declined to comment on whether the FCC had been preparing an NOI or NPRM. The commission will issue a public notice seeking comment on the petitions, the spokesman said, though he did not have any information on the timing of the notice’s release.
The FCC’s examination of the petitions will be “a very important case for the interplay of delegated authority and state operations internally” and “will have significant repercussions whatever the courts end up doing with it,” said NARUC General Counsel Brad Ramsay. “I actually believe that if an appellate court did uphold the FCC pre-empting state law like that, I could see it going to the Supreme Court. It would be a landmark case -- one people could end up studying in law school.” NARUC doesn’t have an official position on the preemption issue, he said. Baller Herbst’s Jim Baller, who filed the petitions on behalf of EPB and Wilson, referred us to the text of the petitions, which he said “tried to address all issues carefully."
The FCC will “absolutely” face court challenges if it decides to act based on Section 706, which it would likely lose on the precedent established in Nixon v. Missouri Municipal League, said TechFreedom President Berin Szoka. Nixon upheld the state’s right to prevent municipalities from providing telecom services. The EPB and Wilson petitions claim Nixon does not apply in their cases. The commission is wrong to conflate Silberman’s interpretation of Section 706 with the majority opinion in Verizon, Szoka said, saying he hopes a court ruling on the petitions at the D.C. Circuit or elsewhere would provide a better sense of the FCC’s authority under that section. Congress needs to resolve some issues in state municipal broadband laws, but that may not happen until after the FCC goes through its process, he said.
The outcome of the petitions will ultimately be determined by whether people believe states’ rights trump the broadband deployment needs that the FCC and Congress have identified, said Gig.U Executive Director Blair Levin. “When you have a town like Wilson wanting to serve other towns that are underserved in their area, it makes you wonder why the telecom companies and cable companies think it’s a good public relations ploy to suggest that the concept of states’ rights is more important than the idea of providing bandwidth to these underserved communities,” he said. “I'm not saying states’ rights isn’t an important principle, but in the context of bandwidth’s importance to our economy and civic engagement, why do they want to be on the side of less bandwidth?” Major telecom companies have been opposed to municipal broadband projects and observers said those companies would be the likeliest parties to challenge an FCC decision on the petitions. AT&T and Charter Communications are the main private ISPs in the Chattanooga area, while several ISPs serve the Wilson area. A Charter spokesman declined to comment.
The Chattanooga and Wilson petitions are likely to be test cases that may determine whether other communities file similar petitions in the future, Mitchell said. “We'll see a lot of communities pay very close attention to what happens here,” he said. Chattanooga and Wilson have sufficient resources to go through an FCC proceeding of this type, while “a lot of smaller communities don’t,” Mitchell said. “I'm sure they would all like to pursue it” but will wait until the Chattanooga and Wilson petitions are resolved before they “decide whether they want to try to remove the barriers that are restricting them.”
EPB “sees true high-speed broadband as critical infrastructure for the 21st century, plain and simple,” a spokeswoman said, comparing the importance of broadband to that of electricity and other utilities in the past. EPB anticipated the possibility that the FCC might face legal action over the petitions and said the board is ready to “stand by and be as supportive as we could, but it really wouldn’t be our battle at that point,” she said. “We would certainly be involved as requested, but it would be between whoever the challenger is and the FCC at that point.”