The Battle Over Government-Run Internet Heats Up at FCC

A Republican aide claims the federal agency can’t overturn state restrictions.

Bays of equipment stand in the 4G area at an AT&T mobile telephone switching office on October 25, 2012 in Charlotte, North Carolina. The center handles wireless AT&T traffic from the western part of North Carolina.
National Journal
Brendan Sasso
Aug. 20, 2014, 9:08 a.m.

If Fed­er­al Com­mu­nic­a­tions Com­mis­sion Chair­man Tom Wheel­er wants to stop states from block­ing city-run broad­band, he’ll likely have to over­ride Re­pub­lic­an op­pos­i­tion to do it.

In a speech Wed­nes­day, a top Re­pub­lic­an FCC aide ar­gued that the agency lacks the au­thor­ity to over­turn state laws on the is­sue. More than 20 states, at the be­hest of cable and tele­com in­dustry lob­by­ists, have re­stric­ted the abil­ity of cit­ies to build their own broad­band net­works.

Mat­thew Berry, the chief of staff to Re­pub­lic­an FCC Com­mis­sion­er Ajit Pai, ar­gued that cit­ies and towns are just “ap­pend­ages” of state gov­ern­ments. States are free to re­strict loc­al poli­cy­mak­ing as they see fit, Berry ar­gued.

He ac­know­ledged that the fed­er­al gov­ern­ment can pree­mpt state laws, but only through a “clear state­ment” from Con­gress. Without that con­gres­sion­al au­thor­iz­a­tion, the FCC can’t take ac­tion, Berry said.

The Re­pub­lic­an aide im­plied that Wheel­er is only con­tem­plat­ing ac­tion on the is­sue as a way to tamp down lib­er­al out­rage over his pro­pos­al for weak­er net-neut­ral­ity reg­u­la­tions.

“We do not have the band­width to waste on a sym­bol­ic, feel-good ef­fort that ap­pears de­signed to ap­pease a polit­ic­al con­stitu­ency that is un­happy with where the FCC is headed on oth­er is­sues,” Berry said at a con­fer­ence of state le­gis­lat­ors in Min­neapol­is. He warned that the FCC will only lose in court if it tries to act against state laws.

In let­ters to mem­bers of Con­gress, Wheel­er has said fed­er­al pree­mp­tion is “not a step to be taken lightly” and that the agency would ex­am­ine each state law in­di­vidu­ally.

But he has in­sisted that he has the au­thor­ity to over­turn the laws, which he ar­gues re­strict com­pet­i­tion and leave con­sumers with slower In­ter­net ser­vice.

Sec­tion 706 of the Tele­com­mu­nic­a­tions Act of 1996 gives the FCC the au­thor­ity to “pro­mote the de­ploy­ment” of high-speed In­ter­net. State re­stric­tions on loc­al In­ter­net pro­jects may be in vi­ol­a­tion of that pro­vi­sion, ac­cord­ing to Wheel­er. The leg­al ques­tion is wheth­er the pro­vi­sion gives the agency “clear” au­thor­ity to strike down state laws.

The agency is con­sid­er­ing pe­ti­tions from Chat­tanooga, Tenn., and Wilson, N.C., to over­turn state re­stric­tions so they can ex­pand their mu­ni­cip­al pro­jects.

In­ter­net pro­viders and many state law­makers ar­gue that the city-run pro­jects can waste tax­pay­er money. But Wheel­er and con­gres­sion­al Demo­crats ar­gue the pro­jects can boost eco­nom­ic de­vel­op­ment by provid­ing high-speed In­ter­net ac­cess to loc­al busi­nesses.

The pro­jects are of­ten built in areas without high-speed In­ter­net ser­vice from com­mer­cial pro­viders.

“I be­lieve that it is in the best in­terests of con­sumers and com­pet­i­tion that the FCC ex­er­cises its power to pree­mpt state laws that ban or re­strict com­pet­i­tion from com­munity broad­band,” Wheel­er wrote in a June blog post. “Giv­en the op­por­tun­ity, we will do so.”

Berry said he be­lieves the FCC may take ac­tion be­fore the end of the year. His boss, Ajit Pai, is one of two Re­pub­lic­ans on the five-mem­ber com­mis­sion. Wheel­er could over­ride Re­pub­lic­an op­pos­i­tion and strike down state laws with the sup­port of the two oth­er com­mis­sion Demo­crats.

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