The Federal Communications Commission is reportedly getting ready to challenge state laws limiting municipal broadband. An agency proposal, if approved by FCC commissioners, would challenge laws in North Carolina and Tennessee, two states are on the front lines of the policy debate over whether local governments should be able undertake public efforts to provide and manage fiber-optic infrastructure and sell 1-gigabit Internet access to residents.
An unnamed senior official told The Washington Post that FCC Chairman Tom Wheeler “could circulate the draft to his fellow commissioners as early as Monday and the decision will be voted on in the FCC's public meeting on Feb. 26.”
Next Century Cities, a coalition of cities across the nation that are supportive of expanding municipal broadband projects, applauded the news of the FCC’s proposal to challenge the state laws in North Carolina and Tennessee.
“We welcome reports that Chairman Wheeler is taking the concerns of cities and their leaders seriously when it comes to local choice,” said Deb Socia, executive director of Next Century Cities. “We look forward to seeing the details, but any move to expand choices for towns and cities is good for innovation, competition, and for the country.”
Chattanooga, Tennessee, and Wilson, North Carolina, are part of that coalition and filed petitions with the FCC in August 2014 asking Wheeler to use his authority to challenge state laws limiting such municipal broadband projects.
The Tennessee law allows electric utilities to provide Internet and TV service, but only within their electric service areas and after meeting requirements that private providers would not have to meet. The North Carolina law passed in 2011 imposes a variety of restrictions, including a ban on subsidizing Internet service with any other municipal revenue and a ban on pricing service below the cost of providing it while inflating that "cost" by counting taxes that would only apply to private providers. It also limits the geographic areas in which providers can offer service, with a provision specifically targeting Wilson.
President Obama has touted municipal broadband projects and recently visited Cedar Falls, Iowa, the first “gigabit city” in the Hawkeye State.
Business groups like the U.S. Chamber of Commerce have been critical of the president’s support of municipal broadband and say that the federal government shouldn’t interfere with state laws that may limit cities from undertaking such projects.
The federal government “should not impose new levels of uncertainty and set up government-subsidized competitors, when all evidence indicates that hundreds of billions of dollars of private-sector investment have been driving economic growth,” the U.S. Chamber of Commerce said in a Jan. 14 statement.