Tennessee Sues FCC Over Muni Broadband Pre-emption
Tennessee Attorney General Herbert Slatery sued the FCC over the order pre-empting portions of North Carolina and Tennessee state laws that restrict municipalities’ ability to deploy government-owned broadband networks. The FCC voted 3-2 Feb. 26 to issue the order, which specifically pre-empts the state laws for the Electric Power Board (EPB) of Chattanooga, Tennessee, and Wilson, North Carolina (see 1502260030). Slatery, a Republican, had been expected to sue the FCC over the order. North Carolina Attorney General Roy Cooper, a Democrat, is expected to sue the agency. It hadn’t received any challenge from North Carolina, said an agency spokesman Tuesday. The FCC is “confident that our decision to pre-empt laws in two states that prevented community broadband providers from meeting the needs and demands of local consumers will withstand judicial scrutiny,” he said.
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The FCC “unlawfully inserted itself between the State of Tennessee and the State’s own political subdivisions,” Slatery said in the petition for review (docket 15-3291). It was filed with the 6th U.S. Circuit Court of Appeals Circuit Friday and publicly released Monday. As is standard in initial petitions for review, Tennessee said the order violated the U.S. Constitution, exceeded FCC authority and “is arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act.” Tennessee asked the Sixth Circuit to vacate and set aside the order and provide "additional relief.”
Tennessee’s choice of the 6th Circuit rather than in the U.S. Court of Appeals for the D.C. Circuit, its other option, indicates the state likely wants to argue against FCC interpretation of its statutory authority under Communications Act Section 706, said Squire Patton communications lawyer Jack Nadler, who isn't involved in the pre-emption dispute but has followed it. The FCC heavily relied on its current interpretation of Section 706 to justify its actions in the municipal broadband order. Taking a challenge to the order to the D.C. Circuit would have been risky because FCC Section 706 interpretation is based on the D.C. Circuit’s opinion in Verizon v. FCC, Nadler said.
Tennessee’s initial complaint is “broadly what we expected” the state would say, said Next Century Cities Policy Director Christopher Mitchell. “It’s disappointing to the extent that anyone in Tennessee will be delayed getting high-quality Internet access as a result.” Mitchell said he was surprised North Carolina hadn’t challenged the FCC order because “there’s been so much passion” about state sovereignty on the issue there. “I figured in my own calculus that North Carolina would inevitably appeal and Tennessee might appeal,” Mitchell said.
Cooper's office is still "evaluating whether to partner with Tennessee in appealing the decision in the Sixth Circuit," a spokeswoman said. If Cooper does sue on behalf of North Carolina, the next significant step would be a move to consolidate that case and the Tennessee complaint, Nadler said. North Carolina would file in the Fourth Circuit if it also chooses not to file in the D.C. Circuit. An FCC official said it would be routine for the commission to now argue that the cases should be consolidated in the Sixth Circuit because North Carolina didn’t file its case within 10 days of the municipal broadband order’s March 12 release, the deadline for getting into the lottery system for court jurisdiction. Parties need to file within 60 days of the order’s March 12 release. Most FCC orders become effective 60 days after the order appears in the Federal Register, but the commission said it specifically made the municipal broadband order effective upon release because it was an “adjudicatory matter.” The FCC has argued that lawsuits filed Monday by Texas wireless ISP Alamo Broadband and USTelecom against the new net neutrality order are premature and subject to dismissal because they occurred before the net neutrality order appeared in the Federal Register, although both lawsuits premise their timing on the idea that the order’s declaratory ruling became final March 12 (see 1503230066).
Any legal challenge to the FCC municipal broadband order has been seen by industry observers as likely to draw many state government and industry groups as interveners, with the National Conference of State Legislatures among those that have previously said they would consider joining a case (see 1502020048). NARUC will at least be an intervener and is considering whether it can file its own appeal of the case at the D.C. Circuit, General Counsel Brad Ramsay said. Several other groups we spoke with Tuesday said they hadn’t made a decision on whether to become interveners in Tennessee’s suit.
Tennessee’s House Business and Utilities Subcommittee delayed its planned consideration Tuesday of HB-1303, which would partially ease restrictions in the state’s municipal broadband law by allowing a municipality that operates an electric utility to provide utility services, including broadband, outside its electric service area. State House Assistant Majority Leader Kevin Brooks, a Republican who wrote HB-1303, requested the delay during the subcommittee meeting Tuesday, saying he and other proponents of the legislation are “working diligently to find common ground on this issue.” The state Senate Commerce Committee was scheduled Tuesday to mark up SB-1134, the Senate’s version of HB-1303 (see 1503230069).
AT&T, one of several companies in the state cited as an opponent of HB-1303/SB-1134, isn’t opposed to municipal broadband but believes such networks “should be limited to locations where no private sector broadband service is available and is not likely to be available in a reasonable timeframe,” a spokesman said in an email. “Government money should not be used to compete with the private sector, which has a proven history of funding, building, operating and upgrading broadband networks.”