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Consumers Just Lost The One Government Protection For Public Internet Access

Broadband providers won a legal victory over the FCC’s order to protect local government-run internet networks.

Verizon studio booth at MetLife Stadium in East Rutherford, N.J. CREDIT: AP PHOTO/MEL EVANS
Verizon studio booth at MetLife Stadium in East Rutherford, N.J. CREDIT: AP PHOTO/MEL EVANS

In a preemptive move last year, the Federal Communications Commission (FCC) passed an order that gave cities the power to build their own broadband networks. The order was part of the agency’s larger plan to extend public internet access to primarily rural communities, often out of reach of major, privately-owned networks.

But the U.S. Court of Appeals for the Sixth Circuit ruled against the FCC’s municipal broadband order this week, determining that it went beyond the agency’s abilities set forth by Congress. The problem was the order preempted two state laws in Wilson, N.C. and Chattanooga, Tennessee that banned local governments from building public internet networks that competed with major broadband providers, such as Verizon and AT&T.

“Rural communities want to build the networks themselves…It’s a political fight at this moment.”

Approximately 20 states have similar laws on the books that restrict cities from expanding or building public internet networks. With help from industry trade group USTelecom, the states sued the FCC to preserve the laws.

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The all-Republican, three-judge panel ruled almost unanimously against FCC’s order with Judge Helene White concurring and dissenting in part. White sided with the FCC regarding its broadband regulation in North Carolina, saying the law directly conflicts with the Telecommunications Act of 1996.

Republican FCC commissioners Michael O’Rielly and Ajit Pai, who also voted against net neutrality in 2015, said celebrated the court’s decision as a win for states’ rights and against government overreach.

The FCC could appeal the ruling to the full appellate court or to the U.S. Supreme Court.

“ Although this saga may not end here, I am heartened by Sixth Circuit U.S. Court of Appeals’ decision,” O’Rielly said in a statement. “Unless Congress specifically authorizes FCC intervention, States rightly can limit government-operated broadband networks in order to protect their citizens’ pocketbooks and good senses. Contrary to some beliefs, municipal networks are not panaceas to solving any lack of ubiquitous broadband, but instead unfairly distort the marketplace.”

Pai concurred, saying that he warned in his original dissent against the order that the FCC was overstepping it’s statute-given powers.

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“I warned that the FCC lacked the power to preempt these Tennessee and North Carolina laws and that doing so would usurp fundamental aspects of state sovereignty,” Pai said in a statement. “Rather than wasting its time on illegal efforts to intrude on the prerogatives of state governments, the FCC should focus on implementing a broadband deployment agenda to eliminate regulatory barriers that discourage those in the private sector from deploying and upgrading next-generation networks.”

But supporters of public internet say that despite this week’s legal loss, progress has still been made against laws that restrict cities and states from building their own broadband networks.

“The passing of these laws have been stalled,” said Josh Stager, lead policy counsel for Washington, D.C.-based think tank New America. “Rural communities want to build the networks themselves. The FCC preempting the laws wasn’t the only avenue of attack. A big repeal effort is underway. It’s a political fight at this moment.”