FCC Drops Municipal Broadband Fight

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By Tim McElgunn

Aug. 29 — The Federal Communications Commission won't appeal a federal appeals court's reversal of the commission's 2015 municipal broadband order, which sought to head off state laws that make it harder for local governments to build and operate their own municipal high speed internet networks.

The U.S. Court of Appeals for the Sixth Circuit Aug. 10 reversed the FCC’s Feb. 2015 order, in a win for state sovereignty but a setback for cities in Tennessee and North Carolina that have installed their own high-speed internet networks and hoped to expand the areas served over their fiber infrastructure ( Tennessee v. FCC , 2016 BL 258223, 6th Cir., No. 15-3291/3555, 8/10/16 ).

In the wake of the Sixth Circuit decision, cable operators, including Comcast Corp. and Charter Communications Inc. and telecommunications providers such as AT&T Inc., Verizon Communications Inc. and CenturyLink Inc. will face less competitive pressure to build out super-fast networks in areas with uncertain economics, including smaller cities, less affluent neighborhoods within cities and suburbs and rural areas where it costs more to build networks.

Those companies and their lobbying groups have been vocal in painting municipal networks as unfair competition for services that they would otherwise deploy themselves.

“The FCC will not seek further review of the Sixth Circuit's decision on municipal broadband after determining that doing so would not be the best use of commission resources,” FCC spokesman Mark Wigfield told Bloomberg BNA in an Aug. 29 e-mailed statement.

Policy Milestone

Tennessee and North Carolina sued the FCC, challenging the commission’s authority to preempt state laws that limit public entities' ability to compete with private enterprise for broadband customers. The Sixth Circuit heard oral arguments in March. The case tested the FCC's ability to intervene in policy fights between state and local governments over municipal broadband.

The court’s ruling and the commission’s decision to forgo an appeal shifts back to the states the battle over municipal government authority to build and operate broadband networks in competition with—or in place of— commercial internet service providers.

While only a few states, including Nebraska, have outright bans on municipalities creating broadband networks, several states limit the ability of local governments to expand broadband networks outside of their prescribed electric footprints or to guarantee debt issued to fund network deployment and operation.

To contact the reporter on this story: Tim McElgunn in Cherry Hill, NJ at tmcelgunn@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

The Sixth Circuit decision is available at http://src.bna.com/hB2

The FCC's 2015 order is available at http://src.bna.com/hc3

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