FCC overturns state laws that protect ISPs from local competition
The Federal Communications Commission today voted to preempt state laws in North Carolina and Tennessee that prevent municipal broadband providers from expanding outside their territories.
The action is a year in the making. FCC Chairman Tom Wheeler announced in February 2014 his intention to override state laws designed to protect private cable companies and telcos from public sector competition. Wheeler took his cue from the federal appeals court ruling that overturned net neutrality rules; tucked away in that decision was one judge's opinion that the FCC has the authority to preempt "state laws that prohibit municipalities from creating their own broadband infrastructure to compete against private companies."
Nineteen states have such laws, often passed at the behest of private Internet service providers that didn't want to face competition. Communities in two of the states asked the FCC to take action. The City of Wilson, North Carolina and the Electric Power Board (EPB) of Chattanooga, Tennessee filed the petitions that led to today's FCC action. Each offers broadband service to residents and received requests for service from people in nearby towns, but they alleged that state laws made it difficult or impossible for them to expand.
“You can’t say you’re for broadband and then turn around and endorse limits on who can offer it,” Wheeler said today. “You can’t say, ‘I want to follow the explicit instructions of Congress to remove barriers to infrastructure investment,' but endorse barriers on infrastructure investment. You can’t say you’re for competition but deny local elected officials the right to offer competitive choices."
States have given municipalities the authority to offer broadband but made it difficult with tons of bureaucratic requirements, he said. "The bottom line is some states have created thickets of red tape designed to limit competition," he said. Local residents and businesses are the ones suffering the consequences, he argued, pointing to members of the two communities in the audience.
Some businesses are forced to move to other towns for lack of better broadband, he said. Wheeler described one person who pays $316 a month "for a collage of services that includes two mobile hotspots," while living less than a mile from a gigabit network. One woman in the FCC's audience has to drive her son 12 miles to a church where he can access Internet service fast enough to do schoolwork, he said. These people are "condemned to second-rate broadband."
Both EPB and Wilson have advanced networks but are surrounded by communities that lack advanced service, FCC wireline competition official Gregory Kwan told commissioners.
"EPB is an island of competitive high speed broadband service surrounded by areas for the most part with single or no provider of advanced broadband," he said. "Wilson's network... is a similar situation, an island of competition surrounded by a sea of little to no options for world class competitive broadband services."
"Our focus is really about wanting to serve our neighbors who have little or no access to broadband," EPB communications VP Danna Bailey told Ars yesterday. "We’re hoping that the FCC votes in favor of our petition, but we’ll have to understand any ramifications of anticipated legal challenges before we move forward."
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