Will FCC Overturn State Laws Blocking Municipal Broadband?

Because heaven forbid someone other than cable and phone companies offer quality Internet access, some 20 states have laws that either ban or heavily restrict municipal broadband, and recent attempts to ban muni broadband in Kansas, and Georgia have only failed following public outcry. Yesterday, FCC Chair Tom Wheeler gave some hope that his agency would stop new bans from being put in place, but didn’t mention the fate of the existing laws.

Speaking yesterday at a cable industry conference, Wheeler stated that the lack of competition in broadband “makes it all the more important that we knock down public and private barriers to competition and avoid erecting new ones,” and that is important to “encourage competition wherever it is possible.”

But many states, under pressure from telecom industry lobbyists, have enacted far-reaching restrictions on municipalities who want to create their own broadband networks.

For example, here in Pennsylvania, a city can’t sell broadband service if a “local telephone company” already provides broadband to residents. So even if the service sucks and the price is extortionate, the municipality’s hands are tied.

And in Nevada, municipalities are allowed to provide broadband, but only if they have fewer than 25,000 residents, or in the case of a county that wants to provide broadband, fewer than 50,000 residents. That is effectively a ban on service, as it is rare (but not impossible) for a community of so few people to have the capital to invest in a new broadband network.

Meanwhile, Texas makes no effort to couch its ban in terms of existing services or population size. Instead, municipalities in the Lone Star State are prohibited from “offering telecommunications services to the public either directly or indirectly through a private telecommunications provider,” so a city couldn’t even partner with an existing provider to provide competitive service.

While we’ve beaten up on FCC Chair Wheeler in recent weeks — with good reason — his speech on Wednesday did offer a glimmer of hope that he understands the important role that muni broadband could play in finally bringing competition to the ISP marketplace.

“I understand that the experience with community broadband is mixed, that there have been both successes and failures,” he explained. “But if municipal governments — the same ones that granted cable franchises — want to pursue it, they shouldn’t be inhibited by state laws. I have said before, that I believe the FCC has the power — and I intend to exercise that power — to preempt state laws that ban competition from community broadband.”

Notice that he said “preempt,” not “overturn.”

Wheeler does not appear to be a man who chooses his words lightly, so it’s telling that he opted to declare his intent to cut new bans off at the pass without specifically mentioning the multiple laws that already exist.

He also chose to say “ban” and not “limit,” perhaps implying that the FCC will only preempt those new laws that seek to place an outright ban on muni broadband, leaving the door open for things like the Pennsylvania and Nevada laws that place ridiculously restrictive conditions on municipalities but don’t specifically outlaw local governments from offering broadband.

Ars Technica questioned these same distinctions and brought them to the attention of a rep for the FCC, who clarified that Wheeler “is not trying to make a distinction between ‘ban’ or ‘limit.’ The point is to look at the effect of the law.”

The rep also said it’s too early to say how the Chairman will deal with the existing slate of laws that throw up roadblocks to muni broadband, but said “We will be taking up this issue in the technology transitions proceedings, and there should be an announcement about this in the next few weeks.”

So until then, we reserve judgement, but hope that Wheeler does use the FCC’s authority to overturn the restrictions that have kept muni broadband from being a reality for nearly half the country.

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  1. Pacer says:

    Don’t count on help from FCC Chairman Tom Wheeler on this issue. He’s already killed net neutrality at the behest of his corporate friends and colleagues in the telecommunications industry for whom he lobbied. Even if he helps overturn laws blocking municipal broadband (which is doubtful) which would you rather have: complete net neutrality or cheaper municipal broadband? Believe me, net neutrality is much, much more important.