FCC Chairman: FCC Should Preempt State Laws That Ban Or Restrict Municipal Broadband

Image courtesy of (carlylutzmann)

Broadband competition in the United States stinks. One alternative is for local entities — cities and municipalities — to create their own public networks, when big companies like Comcast don’t or won’t serve them. But in 40% of states, there are laws on the books implicitly or explicitly forbidding public broadband. This week, FCC Chairman Tom Wheeler appears to be making good on his earlier remarks and is directly challenging those state laws.

In a blog post singing the praises of the municipal network in Chattanooga, TN, Wheeler makes the case that solid internet access is a driver of economic growth and job creation, no matter who provides it.

“The network,” Wheeler points out, “was partly built out of necessity.” Private companies weren’t responding to the city’s needs — a familiar story. As Wheeler put it, “Local phone and cable companies chose to delay improvements in broadband service to the Chattanooga area market. Without faster networks,” he added, “Chattanooga residents were at risk of finding themselves on the wrong side of the digital divide, bypassed by the opportunities high-speed connectivity enables.”

So Chattanooga invested in its own high-speed gigabit network, attracting businesses that rely on reliable high-speed internet connections in order to do their work. Business wins, residents win, the economy wins; everyone wins. Except cable companies, who really hate publicly-owned broadband networks because they don’t make money from them.

Tennessee is one of twenty states that, thanks to intervention from cable companies, has turned around and made expanding or introducing municipal broadband illegal right after someone successfully did it. Utah, Kansas, North Carolina, and more than a dozen other states have pulled the same stunt.

Wheeler, apparently, has had enough of that. He says outright:

I believe that it is in the best interests of consumers and competition that the FCC exercises its power to preempt state laws that ban or restrict competition from community broadband. Given the opportunity, we will do so.

Wheeler adds what we see proven true time and time again: competition is good for consumers, and when a marketplace is actually competitive, and not a monopoly, consumers see better services at lower prices.

But although Wheeler’s post strongly indicates that he believes the FCC has the authority to override these state laws preventing competition, certain legislators disagree — and are likely to be as obstructionist as possible should the FCC, a regulatory agency, actually attempt to regulate anything.

GigaOm points to a letter (PDF) signed by 11 Senate Republicans. Among them, the 11 senators represent Nebraska, Wisconsin, Wyoming, Florida, Texas, Oklahoma, Tennessee, South Carolina, and Kansas — over half of which have enacted or tried to enact laws restricting municipal broadband expansion.

The letter, a purely political gesture, takes a concern-troll approach, implying that if the FCC overrules laws prohibiting municipal broadband, that somehow states will become compelled to implement municipal broadband, which would be a violation of states’ rights.

“The insinuation that the Federal Communications Commission will force taxpayer funded competition against private broadband providers — against the wishes of the states — is deeply troubling,” the senators write. And it might be… so the senators should be relieved that it doesn’t seem to be at all what Wheeler is proposing.

The senators also appeal to the bottom line, concluding that “the last thing the Commission should do in these trying financial times” is interfere with states’ public broadband laws.

But the real question about the bottom line is: who benefits when private companies like Comcast and Time Warner Cable have monopolies on providing broadband service? Because it’s not consumers and, as Wheeler points out, it’s not local business, either. Only the existing companies — and those to whom they provide campaign donations — benefit from the status quo.

Removing Barriers to Competitive Community Broadband [FCC]
FCC takes aim at local laws that limit broadband, but faces states’ rights pushback from Republicans [GigaOm]

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