Tag Archives: muni broadband

Muni ISPs are as common a carrier as any other


Buried within a half million comments about common carrier regulation of broadband service, in the midst of a system crash brought about, or not, by a John Oliver rant, is a letter from 19 municipal (to one degree or another) Internet service providers supporting the Federal Communications Commission’s current effort to roll those rules back.

In what must have been an epic, nay, herculean, speed reading session, FCC chair Ajit Pai came across those comments and felt compelled to issue a press release trumpeting the blindingly obvious conclusion that, hey, these guys agree with me so they must be pretty smart. I hope he lets his sidekick, Michael “what I am unwilling to do and will never support is allowing government-sponsored networks” O’Rielly, in on his eureka moment.

The muni ISPs make a couple of points in their letter: imposed service standards are a burden for small providers and munis don’t really need regulation since they’re directly answerable to elected officials.

Our customers have choices and can opt for another provider if we degrade their Internet experience. Moreover, because we are effectively owned by our customers and responsive to them politically, we make sure their interests are the primary drivers of our businesses. We always provide our customers with unfettered access to legal content on the Internet. We never block, throttle, or impair our customers’ traffic nor engage in paid prioritization. We have always said we would adhere to any such principles adopted by the Commission, as we have been doing since the Commission first articulated its Internet Policy principles in 2005. Yet, the Commission ignored the evidence, and imposed the straight-jacket of utility regulation, subjecting us to the constant threat that the Commission or some other party may bring an enforcement action based on the “unknown and unknowable” general conduct standard.

There is truth in their arguments. But there’s also a generous helping of disingenuousness. For example, several of the ISPs are affiliated with muni electric utilities. Being small or governed by a city council does not exempt electric utilities from Federal Energy Regulatory Commission standards or from complying with California Public Utilities Commission safety rules regarding jointly owned utility poles. And they know it.

Munis properly have latitude that privately owned utilities do not enjoy. City councils are rightly reckoned to be at least as good as the CPUC at setting electric rates and protecting consumer interests. But it isn’t a total exemption from oversight. Nor is simply being small. The federal and state rules for small rural telcos are different than those for AT&T and Frontier, but there are rules they must follow nevertheless.

Common carriers and other public utilities are subject to a complicated web of federal, state and local regulation. Dealing with it is just part of the job.

Broadband, conduit bills left stranded in Washington, D.C.


The 114th congress ended with a stack of unfinished broadband business. The most consequential might be the failure to confirm Jessica Rosenworcel for a new term on the Federal Communications Commission, but buried in the wreckage of more than a dozen broadband-related bills are hints of what to expect from the new congress and the new administration next year.

The one major bill with a chance to pass muster with lawmakers as well as the white house was the Mobile Now act. There was bipartisan support for its primary objective of transferring more spectrum from government departments to mobile and other wireless broadband uses. But the same political arm wrestling that fatally stalled Rosenworcel’s nomination also stalled the Mobile Now bill and it died on the U.S. senate floor.

Bills that would have kneecapped the FCC’s regulation of broadband as a common carrier service and widened the loopholes in ISP transparency rules – HR 2666 and HR 4596 respectively – also withered away from neglect in the senate. Dig once bills, that would have promoted conduit installation in federal highway projects, also proved unpopular with parallel house and senate bills dying without a vote. The Mobile Now act also had such language at once point, but it didn’t survive the trip through the committee process.

Duelling municipal broadband measures fought to a standstill. Two bills that would have restricted state governments’ power to ban muni broadband, including HR 6013 by Silicon Valley representative Anna Eshoo, and two bills that would have baked that authority into federal law never even got to a vote in their first committee stop, let alone to a full floor vote.

No one is talking publicly about reintroducing any of these bills next year, but if you’re trying to handicap the early odds, party affiliation is the best clue as to what to expect. The bills that would have peeled back FCC broadband regulations and affirmed the right of states to regulate what cities do came from republicans, while those that would have given cities more independence and opened up competitive opportunities by putting conduit into road projects were authored by democrats. Even if the former had been passed by congress, a presidential veto was certain. And the latter never stood a chance.

Next year, though, republicans will control both branches and the FCC. Odds of a pruning – if not a wholesale weed-whacking – of federal broadband rules are high. Bills with bipartisan support, such as Mobile Now, are also good candidates for enactment. On the other hand, don’t expect much in the way of dig once legislation or federal preemption of state laws restricting muni broadband.

FCC’s muni broadband distraction shudders to a final stop


It’s officially over: the Federal Communications Commission does not have the authority to preempt state authority over municipal broadband systems, even when it thinks the way in which that authority is wielded constitutions a barrier to infrastructure investment. The federal appeals court in Cincinnati made that decision in August, in a case brought against the FCC by Tennessee and North Carolina, and issued the final order yesterday. It was a formality that brings the case to an end. It means that no one on the losing side – principally, the FCC and the cities of Chattanooga, Tennessee and Wilson, North Carolina – challenged the decision, either by asking the appeals court to reconsider or by taking it to the supreme court.

It was apparent after the decision came down that there was little appetite for further litigation. FCC chair Tom Wheeler issued a statement that said, in effect, I wanted to make a point and I made it, and I’ll be happy to go on TV and make the point again. The City of Wilson’s response was to cut off fiber to the premise service in Pinetops, a small, neighboring community. North Carolina law prevents Wilson from offering broadband service outside of its city limits but it went ahead anyway with extending its system after the FCC’s preemption in 2015, without waiting for the appeals court’s decision.

Some on the losing side argue that the fight, first at the FCC and then in the appeals court, lays a legal foundation for future efforts and, therefor, was worthwhile. I disagree. Two years of praying for a federal deus ex machina could have been better spent on state level activism. If, say, Chattanooga had directed those resources toward changing Tennessee law, it might have turned a narrow loss at the state capitol earlier this year into a win. Instead, AT&T’s “platoon of lobbyists” carried the day. Grandstanding at the FCC grabs headlines and pads resumes, but it’s hard and anonymous work in the statehouse trenches that wins legislative battles.

Bill introduced in congress would ban state limits on local broadband service


With two weeks to go before the U.S. congress takes a pre-election break, progress on broadband-related bills appears to be as bogged down as it was in the California legislature’s recently concluded session. That’s not stopping Silicon Valley representative Anna Eshoo from throwing another community broadband bill into the hopper, though.

House resolution 6013 would, in effect, overturn a federal appeals court ruling that said the Federal Communications Commission can’t preempt a state’s ability to restrict municipal broadband projects. The judges decided that congress never gave the FCC unmistakably clear authority to override a state’s traditional power over local – subsidiary – governments. So Eshoo’s draft bill attempts to be unmistakably clear

No State statute, regulation, or other State legal requirement may prohibit or have the effect of prohibiting any public provider from providing, to any person or any public or private entity, advanced telecommunications capability or any service that utilizes the advanced telecommunications capability provided by such provider.

As I read it, though, the bill runs into a problem when it defines “public provider” as

A State or political subdivision thereof, any agency, authority, or instrumentality of a State or political subdivision thereof, or an Indian tribe…that provides advanced telecommunications capability, or any service that utilizes such advanced telecommunications capability, to any person or public or private entity.

That’s very broad language, and will either kill the bill completely or be severely trimmed back. It’s one thing to say that a state can’t keep a municipal broadband utility from serving another, nearby city. It’s quite another to say, for example, that the coastal commission’s IT department can build a fiber to the home system on its own whim.

The bill isn’t destined to make it into law. It’s a policy statement by Eshoo, who is up for reelection in November, as was her earlier bill to impose dig once obligations on federal highway projects. That bill is in deep freeze now, but it succeeded in crafting language that found its way into other proposed laws. Congress hasn’t passed any of those bills yet, but there’s still ample time left on the clock.

FCC preemption loss is muni broadband win


One more vote, and you’re mine.

Waving the magic federal wand and erasing state restrictions on muni broadband seems like a wonderful idea, until the wand waves the other way and muni broadband disappears. That’s why last week’s federal appeals court decision overturning the FCC’s preemption of Tennessee and North Carolina laws limiting muni broadband systems was welcome news.

The current Federal Communications Commission majority tried to preempt the state restrictions during a burst of presidential community broadband populism a year and a half ago. But majorities and popular enthusiasm shift with the political winds. It’s not hard to imagine another president and a different majority lining up with current FCC commissioner Michael O’Rielly, who wrapped up his endorsement of the court’s decision by saying

Contrary to some beliefs, municipal networks are not panaceas to solving any lack of ubiquitous broadband, but instead unfairly distort the marketplace.

It’s no great intellectual leap to reckon a distorted marketplace to be the kind of barrier to infrastructure investment that the FCC is obligated to remove, under the interpretation of federal telecoms law that the appeals court judges rejected last week. Fortunately rejected.

Most states allow cities to operate muni broadband systems with few or no restrictions. Even Tennessee and North Carolina allow it – the beef was about cities offering broadband service beyond their borders.

The restrictions that do exist should go, but the right way to eliminate them is to take the muni broadband battle to state capitols. Telephone and cable company lobbyists are as thick on the ground in Sacramento and Nashville as they are in Washington D.C., but it’s harder for them to hide, and harder for legislators to ignore constituents. Not impossible, but difficult enough to make the fight for community broadband winnable more often than not.

In the long run, last week’s verdict will be a victory.

FCC’s muni preemption attempt looks gone for good


Wednesday’s appeals court decision that tossed out the Federal Communications Commission’s preemption of state limits on municipal broadband is looking more and more like the final word.

The reaction of those on the losing side of the judge’s decision – the FCC and the cities of Chattanooga, Tennessee and Wilson, North Carolina – can be summed up as disappointed resignation. Lots of sorrow but no fighting words, as in they got it wrong and we’re gonna take it all the way to the supreme court. FCC chairman Tom Wheeler’s press release was typical…

In the end, I believe the Commission’s decision to champion municipal efforts highlighted the benefits of competition and the need of communities to take their broadband futures in their own hands…

Should states seek to repeal their anti-competitive broadband statutes, I will be happy to testify on behalf of better broadband and consumer choice. Should states seek to limit the right of people to act for better broadband, I will be happy to testify on behalf of consumer choice.

Translation: we were out to make a point and we made it, and I’ll be happy to go on TV and make the point again.

I think the FCC will walk away from this one, for two reasons. First, the legal rationale for its attempt at preemption was far fetched – even the federal attorney general wasn’t interested in defending it.

Second, the preemption relied on an expansive interpretation of a particular clause in federal telecoms law – section 706 – that the FCC is also relying on to support its marquee decision to regulate broadband as a common carrier service. The FCC won the first round of appeals against that decision, because it’s standing on much firmer legal ground. Throwing the muni preemption case into the mix – which otherwise isn’t on any legal ground at all – would only weaken its position in the main event.

FCC can’t preempt state limits on muni broadband, appeals court rules


Park the bulldozer.

Congress did not give the Federal Communications Commission the authority to override state government-imposed limits on expansion by municipal broadband systems. That’s the simple and – as far as it goes – unanimous opinion of three federal appeals court judges who overturned the FCC’s preemption of muni broadband restrictions in Tennessee and North Carolina.

In general, a state has complete authority to determine what cities and counties can do, within the limits of the law. Local governments “are nothing more than that state’s ‘convenient agencies,'” as this morning’s decision put it. If a federal regulatory agency, like the Federal Communications Commission, wants to interfere in that relationship, it needs a “clear statement” from congress giving it that power.

As they clearly signalled they might during oral arguments in March, the judges ruled that the FCC wasn’t exercising its regulatory powers when it threw out Tennessee’s and North Carolina’s restrictions on muni broadband system expansion. Neither the states nor Chattanooga and Wilson – the two cities involved – are required by federal law to extend broadband service beyond their boundaries. As with private broadband companies, the choice to expand or not is left up to the provider. The question was, as one judge put it, who decides?

Federal courts have said over and over: states can decide or can pass the decision along to local governments. When congress has the authority to override those decisions and it wants to delegate that power to federal agencies, it has to make its intent unmistakably clear.

The FCC claimed that a general statement in the 1996 telecommunications act – the much invoked section 706 – instructing it to “remove barriers to infrastructure investment” gave it the specific authority to preempt the state-level restrictions that Tennessee and North Carolina place on municipal broadband. The judges said made their own clear statement and said that’s wrong…

This preemption by the FCC of the allocation of power between a state and its subdivisions requires at least a clear statement in the authorizing federal legislation. The FCC relies upon [section] 706 of the Telecommunications Act of 1996 for the authority to preempt in this case, but that statute falls far short of such a clear statement. The preemption order must accordingly be reversed.

One judge disagreed with one of the conclusions in the opinion, regarding North Carolina’s muni broadband rate regulations, but her dissent re-affirmed the final ruling: the FCC doesn’t have the authority to preempt otherwise legal state decisions regarding municipal broadband.

During oral arguments, the FCC hinted that it might appeal an unfavorable result to the supreme court. It can also ask the appeals court to reconsider today’s decision. But the FCC would be on its own – it doesn’t even have the support of the U.S. attorney general’s office.

As it stands right now, state restrictions are on muni broadband systems are back in effect in Tennessee and North Carolina. There is little chance that further appeals will change that fact.

Federal appeals court opinion reversing FCC municipal broadband preemption

Federal appeals court rejects FCC’s muni broadband preemption


The FCC cannot preempt state law in Tennessee and North Carolina, and give local governments permission to extend the reach of municipal broadband systems if state legislatures say otherwise. That’s the bottom line from an appeals court decision issued this morning by a three judge federal appeals court panel in Cincinnati. I’ll have more when I’ve finished reading the decision, or you can read it for yourself here:

Federal appeals court opinion reversing FCC municipal broadband preemption

FCC tongue-tied as appeals court judge blows holes in muni preemption


The Federal Communications Commission has serious difficulties explaining why it has the power to preempt state laws that restrict municipal broadband service. Matthew Dunne, an FCC lawyer, argued the agency’s case before three federal appeals court judges on Thursday, defending last year’s decision to remove state-imposed restrictions on municipal broadband systems in Chattanooga, Tennessee and Wilson, North Carolina.

The case hinges on whether the FCC is using authority granted (or not) by congress to remove barriers to broadband deployment, or if it’s simply interfering in a state’s traditional – and well litigated – right to manage what its cities and counties can do, and how they can do it. Under pointed questioning from two of the judges (the third didn’t say much), Dunne couldn’t explain why it would be okay for a city to decide not to offer broadband service outside its city limits, but wrong for the state to make that decision instead…

Judge John Rogers: You gotta admit, don’t you, that if Wilson or Chattanooga didn’t want to expand, you aren’t forcing them to expand are you?

Matthew Dunne: To be sure, we’re not, no…

— snip —

Rogers: You just conceded that these are things the city could decline to do, if it was so inclined…You agree that the city could decline to do all these things that you say the state must let it do?

Dunne: Yes, your honor, because the state…

Rogers (interrupting): I don’t see how that doesn’t concede your case…basically what you’re doing is deciding who makes this discretionary decision whether to expand. They don’t have to expand under FCC communications policy, you just said that…Don’t you see how that gets at the structure of government rather than FCC policy?

Lawyers for Tennessee and North Carolina were also probed by the judges, but had a much easier time answering their questions. It’s always risky business to try to predict the outcome of an appeals case based on the give and take before the bench, but unless the judges come up with better answers on their own than the ones provided by Dunne, it seems a very good bet that they will overturn the FCC’s municipal broadband preemption.

You can download the audio from the session here.
Or listen to it online here.

Tacoma muni fiber upgrade will need city subsidies, and that’s the optimistic case


If the City of Tacoma wants to hang on to control of its municipal cable system, adding broadband to the service – as the city council voted to do – won’t be enough to pay the bills. Financial help from the city will be needed to upgrade the system to gigabit capacity, according to a presentation prepared by a consultant for the Tacoma public utility board, which shares oversight responsibilities with the council.

The plan – called the “All-In Retail Option” – would have the city reject offers made by local companies to lease the system, called Click, and take over operations, and instead take over the broadband business other private ISPs run via re-sold wholesale access. Internet speeds would be boosted to a gigabit and a triple play bundle would be developed. That costs money, though, and the presentation concludes that “based on legal and financial advice, do not believe it is responsible or prudent for Tacoma Power to consider”, but the upgrade “could be financed by General Government”.

Even then, the system would need a complete makeover. Union contracts – which boost costs above comparable systems – would have to renegotiated, head count would have to be cut and subsidies – from the city or electric ratepayers (it’s run by the muni electric utility) – would still be necessary until breakeven is reach. And that’s the best case scenario, which assumes the system will double its broadband subscriber count.

Acting against those assumptions is increased competition. Comcast is in the market, and CenturyLink is already exploring its own fiber upgrade. According to the presentation, CenturyLink has approached the utility department about hanging fiber on city poles. “As a new triple play provider, and one with a gigabit network, they will significantly impact Click!’s future success”, it reads.

Even so, the Tacoma city council gave utility staff until April to come up with a business plan to make it all work. It’ll be interesting to see if the council still wants to go “all in” once it knows what the stakes will be.