FCC chair’s muni shout out is just a first step on a hard road

by Steve Blum • , , , ,

Unmistakably, if not perfectly, clear.

FCC chairmanTom Wheeler stirred up a lot of excitement yesterday when he floated the idea of encouraging municipal broadband as a way of increasing telecommunications market competition…

The Commission will look for opportunities to enhance Internet access competition. One obvious candidate for close examination was raised…namely legal restrictions on the ability of cities and towns to offer broadband services to consumers in their communities.

He’s absolutely right that cities and other public agencies can create competition for incumbent telecommunications providers. That’s the reason that California cable companies lobbied so hard (and largely successfully) last year to keep state broadband infrastructure subsidies out of the hands of cities. Even the threat of municipal competition can provoke defensive investments in upgrades by incumbents, which they would rather not do.

But I’m not excited yet. I take Wheeler’s statement at face value: saying muni broadband restrictions are a “candidate for close examination” is not the same thing as declaring war on states that impose them. If that’s his goal, then Wheeler has a lot of rocky legal ground to cross first.

Top of the list is a U.S. Supreme Court ruling from 2004 that said federal law doesn’t require the FCC to police state restrictions on muni broadband. That’s not the same thing as saying the FCC can’t step in if it chooses to, but as Jim Baller, a recognised expert in muni broadband law, noted, the court was “applying its traditional rule of statutory construction that federal statutes cannot be read to preempt a fundamental state power unless Congress makes it its intent unmistakabl[y] clear”.

The fundamental state power at stake is the ability to choose what local governments can and can’t do. That’s not an absolute right, but without “unmistakably clear” permission from congress, Wheeler will have a steep uphill fight if he actually wants to pre-empt a state’s authority to restrict or empower the cities under its control.