FCC misses triple bank shot defence of muni broadband preemption

by Steve Blum • , , ,

It only counts if you make it.

Tennessee and North Carolina effectively banned cities from providing broadband service outside of their geographical city limits for the wrong reason: to regulate broadband competition. That’s the case that the Federal Communications Commission is trying to make, as it defended its preemption of state limits on the scope of municipal Internet service providers in a brief filed yesterday in the federal appeals court hearing the case.

The FCC’s argument boils down to 1. broadband is a matter of interstate commerce, period, 2. the vague mandate that congress gave the FCC to “to utilize ‘measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment'” gives it all the authority it needs to intervene wherever it sees fit and 3. the particular way that Tennessee and North Carolina put geographic boundaries on where cities can offer Internet service is impermissible state regulation of the broadband market, and not otherwise allowable limits on local government authority.

It’s an attempt to get around the requirement – laid down in previous federal court rulings – that “federal statutes cannot be read to preempt a fundamental state power unless Congress makes it its intent unmistakably clear”. That fundamental power is the ability to establish subsidiary governmental agencies – counties, cities and special districts – and decide which tasks to delegate to them and which to proscribe. The reasoning is a triple bank shot which, as another appeals court pointed out, is as allowable as any other shot.

But it is also an extremely difficult shot to make. In summing up its argument, the FCC admits, for example, that the North Carolina law…

Contains a host of requirements, any one of which, standing alone, might constitute a reasonable exercise of core state control of political subdivisions. But, viewed more closely, especially taken together, the provisions of the law do not serve to protect taxpayers or promote community participation…as a regulation of interstate commerce, they are subject to preemption, and fall within the FCC’s jurisdiction.

The FCC’s job is to regulate interstate telecoms, not tell states how to protect taxpayers or promote community participation. A state is within its rights to reasonably exercise a core function, unless there’s federal jurisdiction and congress specifically says otherwise. In this case, congress didn’t.