FCC’s argument against voter discretion is out of bounds

by Steve Blum • , , ,

Voters don’t have to stick to the story you give them.

Local governments are not private businesses and are not managed as if they were. That simple fact of life seems to be bothering the Federal Communications Commission. In its defence of its preemption of state restrictions on municipal broadband systems, filed with a federal appeals court, the FCC points to commonplace public disclosure, debate and voting requirements imposed by North Carolina as attempts to regulate interstate commerce rather than govern municipalities

These include a requirement that the city hold public hearings and a special election. As the agency explained, taken alone such requirements might not constitute a barrier to infrastructure deployment, or serve to regulate the competitive landscape. On closer examination, however, it becomes clear that the requirements do exactly what the title of the bill states—regulate broadband competition. For example, the law requires that the city provide notice of the public hearing 45 days in advance to “companies that have requested service,” that private communications companies be permitted to participate fully in the hearing, and that the city make available its full business plan in advance. Although many municipal services, such as electric and water service, may require substantial expenditures, these specific provisions are unique to the provision of broadband service.

Not everything needs to go to a vote of the people but it’s perfectly reasonable for a state, via elected representatives or public ballot, to set particular hurdles for particular municipal decisions. Broadband is – as the FCC relentlessly and correctly argues – a competitive business. As such, voters might have different concerns than with, say, a monopoly electric or water utility. Personally, I think electric and water utility decisions should go to a vote too, but I’m from California so I guess I would. North Carolinians can and should do things their own way.

When a vote or hearing is held, though, full public disclosure is an absolute necessity and notification of interested parties is course of business. Public agencies will resist – it’s in the nature of any bureaucratic or political entity – so we have various freedom of information laws to ensure it. If a publicly traded corporation tried to withhold relevant relevant business case information ahead of a stock offer, its executives might well go to jail. Absent state disclosure requirements, though, local officials are free to put potentially risky broadband investments to a vote with only minimal information, as they did in Longmont, Colorado.

The FCC’s preemption defence is weak – even the federal justice department seems to think so – but that’s no excuse for trying to undermine the democratic process.