FCC Kills State Laws Blocking Municipal Broadband

by | February 26, 2015

By Mitra Malek

People living and working near the Western Hemisphere's first location to get gigabit-per-second Internet service should soon have access to the same speedy broadband their neighbors have.

But it won't happen right away, and those plans might get derailed by legal and lawmaking challenges.

The Federal Communications Commission on Thursday approved an order that lets Chattanooga's EPB expand service beyond its footprint, which includes several counties and is concentrated in Chattanooga. The FCC decision applies to the whole of Tennessee, pre-empting state laws that limit carriers like EPB to defined service areas.

"Chattanooga is a leader," Mayor Andy Berke said Thursday afternoon in celebration. "Sometimes leadership doesn't come without a fight."

But within hours of the FCC vote, two U.S. Congress members introduced legislation that would block the federal agency from overriding state and local municipal broadband laws.

For now though, EPB and residents of Bradley County, Tenn., in particular, are staying positive. EPB, which submitted a petition last year asking for the order, says it will keep pushing state legislators to remove territorial restrictions.

Some people are less than a mile from EPB's service area but, by law, can't get its broadband, leaving them at the mercy of dial-up service and its glacial connection speed. Or, like Joyce Coltrin, whose wholesale nursery is in southern Bradley County, tapping at a phone that has a cellular Internet connection.

"It's very hard to use an iPhone for business," said Coltrin, who heads a group of 160 households called "citizens striving to be part of the 21st century." They, too, have been pushing state legislators to change laws so that EPB can offer service in their area, and they don't plan to let up, she said. Tennessee Senate Bill 1134 and House Bill 1303 would remove the state territorial restrictions that prevent municipal electric systems from extending fiber services to neighboring areas.

EPB has said it will only move into areas that ask for its service and then only if it makes financial sense to do so. Those requests have to be formal and must come from elected officials, said David Wade, EPB's chief operating officer.

"We want them to ask us, then we'll review the technical and legal issues," he said.

The utility anticipates it would first move into southwest Bradley County. Some areas of Hamilton County are still without gigabit service and need help, officials said.

Any expansion would need to be "financially feasible on its own, as its own venture," Wade said. It's not yet clear if rates in new areas would differ from rates in current service areas. "I don't see them being significantly different," he said.

FCC commissioners who backed the order in Thursday's 3-2 vote talked of the desperation of communities with inferior Internet service and linked broadband service to economic growth, education and better library services. "Without it, no community has a fair shot in the digital age," commissioner Jessica Rosenworcel said.

Tennessee was not the only state affected Thursday. The FCC decision also applies to North Carolina. EPB, a city-owned agency, filed a petition last July asking the FCC to allow for the right to expand. Wilson, N.C., also filed a petition. About 20 states have laws that restrict the activities of community broadband services, according to the FCC, but Thursday's ruling doesn't apply to them.

Resistance to the order had been expected. Opponents -- namely private service providers -- have argued that EPB is a public entity, giving it an unfair advantage.

In a statement Thursday, AT&T said it wasn't opposed to municipal broadband networks but added that they should be limited to locations where no private-sector broadband service is available and likely won't be in the near future.

"Government money should not be used to compete with the private sector, which has a proven history of funding, building, operating and upgrading broadband networks," the company said.

Coltrin and others have said they asked private providers for service for years but to no avail. Even if one said it would provide service now, "I don't think there's a darn person who would believe them," Coltrin said. "We've been down that road so many times."

At least two other residents from Tennessee who have struggled to get adequate Internet service were at the Washington, D.C., hearing.

"The bottom line of these matters is that some states have created thickets of red tape designed to limit competition," FCC Chairman Tom Wheeler said. "These issues that we're talking about have a very human face."

Under federal law, a federal agency, such as the FCC, can pre-empt state laws that conflict with its regulations so long as it's acting within the scope of its authority. There is a clear conflict, the FCC's Thursday order said, between Section 706 of the Telecommunications Act of 1996, which directs the FCC to take action to remove barriers to broadband investment and competition, and provisions of Tennessee and North Carolina law that erect barriers to expansion of service into surrounding communities.

That interpretation didn't translate for all the FCC members.

FCC Commissioner Ajit Pai said he didn't believe that the FCC had the legal right to pre-empt the state laws. Approving the order disrupts the balance of power between federal and state governments, he said.

Commissioner Michael O'Rielly was more aggressive. The order, he said, is "downright hostile to states" and "bad public policy." All told, the commission was arrogant to try to rewrite state laws, he said.

Rewriting state laws is what U.S. Rep. Marsha Blackburn, R-Tenn, and Sen. Thom Tillis, R-NC, want to prevent. The Blackburn-Tillis legislation introduced on the tail of the FCC vote says that the FCC cannot pre-empt states with municipal broadband laws already on the books or states that subsequently adopt such municipal broadband laws.

"States are sovereign entities that have Constitutional rights, which should be respected rather than be trampled upon," Blackburn said in a prepared statement.

(c)2015 the Chattanooga Times/Free Press (Chattanooga, Tenn.)