Tennessee, FCC Debate Net Neutrality Ruling's Fallout on Municipal Broadband
Tennessee and the FCC sparred at the 6th U.S. Circuit Court of Appeals over the agency's broadband authority and the relevance of this week's net neutrality and broadband reclassification ruling in the D.C. Circuit (see 1606140023). Tennessee urged the 6th Circuit, which is reviewing a municipal broadband case, to take an independent look at the commission's broadband authority under Section 706 of the 1996 Telecom Act, but the commission warned against creating a circuit split. Tennessee disputes FCC Section 706 broadband authority in its challenge to a commission order that pre-empted a state law barring Chattanooga from extending its municipal broadband system to neighboring localities.
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Tennessee notified the 6th Circuit Wednesday about the D.C. Circuit's Tuesday ruling upholding the commission's net neutrality rules and reclassification of broadband internet access as a Title II telecom service under the Communications Act (USTelecom v. FCC, No. 15-1063). The D.C. Circuit decision revisited its opinion in a 2014 Verizon v. FCC ruling that said "Section 706 may grant the FCC some independent rulemaking authority," said a Tennessee letter (in Pacer) to the 6th Circuit (State of Tennessee et al. v. FCC, No. 15-3291). The letter noted Tennessee had argued in the 6th Circuit that the D.C. Circuit's conclusion was erroneous but nonbinding dicta.
The D.C. Circuit's Tuesday opinion "reexamined" its finding in Verizon "that Section 706 may grant the agency some independent authority, clarified that this conclusion could not be dismissed as dicta, and held that it was bound by the Verizon result," Tennessee told the 6th Circuit. "Of course, while [USTelecom] holds that Verizon’s interpretation of Section 706 controls in the D.C. Circuit, it is not binding on this Court. This Court is free to examine Section 706 for itself and reach its own conclusions. For the reasons set forth in the State’s briefs, Verizon’s analysis of Section 706 is fundamentally flawed; the statute is nothing more than a hortatory policy statement. Further, Verizon’s own conclusion that Section 706 is ambiguous only reinforces the State’s argument that the statute cannot contain the 'plain statement' of preemption required here."
The FCC responded Thursday, disputing Tennessee's characterization of what the D.C. Circuit had done. In the decision Tuesday, the D.C. Circuit repeated its prior Verizon holding that Section 706 -- which the agency relied on to act in the municipal broadband case -- vests the commission with affirmative authority to enact measures encouraging broadband deployment, said an FCC letter (in Pacer) to the 6th Circuit. "As Tennessee concedes (letter at 1), the [USTelecom] court rejected the argument that the holding of Verizon had been mere dicta. See TN Br. 49-50," the letter said. "And contrary to Tennessee’s letter, the [USTelecom] court did not hold only that Section 706 'may' grant substantive authority or that it reached its conclusion only because it was 'bound' by precedent. Rather, it held: 'Even if there were any lingering uncertainty about the import of our decision in Verizon, we fully adopt here our findings and analysis in Verizon concerning the existence and permissible scope of the Commission’s section 706 authority.' [USTelecom] at slip op. 97."
"The D.C. Circuit’s analyses of Section 706 in both Verizon and [USTelecom], while not binding on this Court, are thorough and persuasive," the FCC told the 6th Circuit. "We again urge the Court to reject Tennessee’s attempts to create a circuit split on the issue."
Two 6th Circuit judges questioned both FCC and state arguments at oral argument in March on Tennessee and North Carolina challenges to the commission's municipal broadband pre-emption order. One judge seemed particularly skeptical of the agency's case (see 1603170031).