Feds Nullify State Laws on City Internet

The Fed­er­al Com­mu­nic­a­tions Com­mis­sion voted Thursday to over­turn laws in Ten­ness­ee and North Car­o­lina that re­strict the abil­ity of loc­al gov­ern­ment to provide In­ter­net ser­vice to their own res­id­ents.

Chat­tanooga, Tenn., and Wilson, N.C., first filed pe­ti­tions last year ask­ing the FCC to over­turn their states’ laws on loc­al broad­band. Both cit­ies are cur­rently provid­ing In­ter­net ser­vice, but their state gov­ern­ments had pre­ven­ted them from ex­pand­ing the pro­jects to more res­id­ents. Last month, Pres­id­ent Obama urged the FCC to grant the pe­ti­tions as part of his push to ex­pand ac­cess to high-speed In­ter­net.

Tele­com and cable com­pan­ies have been lob­by­ing for the state laws around the coun­try, ar­guing that it’s not fair for them to have to com­pete with gov­ern­ment-owned In­ter­net pro­viders. The com­pan­ies con­tend that the city pro­jects dis­cour­age private in­vest­ment and are of­ten ex­pens­ive fail­ures.

But FCC Chair­man Tom Wheel­er ar­gued that if cit­ies want to in­vest their own money to en­sure that homes and busi­nesses have ac­cess to high-speed In­ter­net, then state laws shouldn’t stand in their way.

“The bot­tom line of these mat­ters is that some states have cre­ated thick­ets of red tape to lim­it com­pet­i­tion,” Wheel­er said Thursday. “What we’re do­ing today is cut­ting away that red tape, con­sist­ent with Con­gress’s in­struc­tion to ‘en­cour­age the de­vel­op­ment of broad­band’ and to ‘pro­mote com­pet­i­tion.’”

The is­sue is one of the most con­tro­ver­sial that the FCC will vote on this year. But it was largely over­shad­owed Thursday by the even more ex­plos­ive de­bate over net-neut­ral­ity reg­u­la­tions.

Re­pub­lic­ans fiercely op­pose both the net-neut­ral­ity rules and the over­turn­ing of state broad­band laws, and both ac­tions are likely to prompt leg­al chal­lenges.

The two Re­pub­lic­ans on the five-mem­ber FCC, Ajit Pai and Mi­chael O’Ri­elly, voted against nul­li­fy­ing the state laws. They ar­gued that states should be free to set their own policies — in­clud­ing re­stric­tions on loc­al gov­ern­ments.

The FCC’s ac­tion to boost loc­al In­ter­net “dis­rupts the bal­ance of power between the fed­er­al gov­ern­ment and state gov­ern­ments that lies at the core of our con­sti­tu­tion­al sys­tem of gov­ern­ment,” Pai said.

The Re­pub­lic­ans said they aren’t ne­ces­sar­ily op­posed to all mu­ni­cip­al broad­band pro­jects, but that states should be able to im­pose re­stric­tions on cit­ies to pro­tect tax­pay­er money. They ac­know­ledged that the fed­er­al gov­ern­ment can pree­mpt state laws, but ar­gued that Con­gress has not giv­en the FCC clear au­thor­ity to act against state broad­band laws.

By grant­ing the pe­ti­tions, the FCC struck down the laws in those two states, but oth­er state re­stric­tions re­main in ef­fect. Oth­er cit­ies look­ing to build or ex­pand their own In­ter­net pro­jects may soon file pe­ti­tions with the com­mis­sion.