FCC makes first strikes against anti-muni broadband state laws

Warming up for its vote on Federal Communications Commission (FCC) Chairman Thomas Wheeler's Net Neutrality proposals, FCC commissioners first voted 3-2 in favor of petitions from EPB in Chattanooga, TN, and the City of Wilson, NC, to strike down laws in their states that prevented them from extending their fiber to the home (FTTH) based broadband service offerings beyond city limits.

The vote, along party lines with the Democratic majority in favor, was not considered a surprise, given Chairman Wheeler's pro-competition, pro-muni stance (see "FCC Chairman Wheeler pledges support for municipal broadband network efforts"). The vote also aligns with statements President Barack Obama made on the subject (see "President Obama backs municipal broadband efforts").

The FCC stated that it has the right to preempt the state laws based on what it perceives as a conflict between those laws and Section 706 of the Telecommunications Act of 1996, which directs the Commission to remove barriers to broadband investment and competition. Whether those states will take the FCC to court to combat this assertion – or whether Congress will act along parallel lines – remains unclear. Also unclear is how quickly municipalities from the 17 other states that restrict muni broadband will file similar petitions with the Commission.

EPB was one of the early providers of 1-Gbps fiber-optic broadband in the United States (see "EPB Fiber Optics offers 1 Gigabit broadband in Chattanooga via GPON"). The City of Wilson has been offering services via its Greenlight FTTH network since at least 2008 and also offers 1-Gbps broadband.

Under the Tennessee law, electrical utility EPB could offer telecommunications services anywhere in the state, but could only provide Internet and cable services within the electrical system footprint. In North Carolina, the FCC cited what it called "numerous conditions that effectively precluded Wilson from expanding broadband into neighboring counties, even if requested."

Backers of the fiber-optic broadband service providers quickly hailed the vote.

"The FTTH Council applauds the FCC for taking this step to further enable deployment of fiber to the home. Communities are hungry for bandwidth — for their economies, healthcare, education and quality of life. Citizens should be able to use all available assets to encourage all entities — ILECs, CLECs, utilities and municipalities— to deploy leading edge, future proof networks," stated Heather Burnett-Gold, FTTH Council Americas president. "Bandwidth should not be a barrier to innovation, nor outdated regulation a barrier to investment."

"This is an important moment for communities in North Carolina, Tennessee, and other states that have barriers to local investments in advanced communications networks," commented Jim Baller of Baller Herbst Stokes & Lide, PC, who was the petitioners' lead counsel. "Not only has the Commission confirmed that it has authority to remove such barriers, but it has also made clear that local Internet choice is critically important to the vitality of our communities and to America's global competitiveness."

TIA CEO Scott Belcher added, "TIA applauds the FCC for giving municipalities the flexibility to pursue network solutions that allow affordable and high-quality broadband to be made available to all Americans. Municipalities should be able to assure local access to high-speed connectivity, especially in locations where private-sector alternatives are not available. High-speed Internet offers tremendous social and economic benefits, and today's action will help municipalities pursue needed broadband solutions and shrink the digital divide."

Meanwhile, Wilson city fathers say they don't have spools of fiber at the ready. "Wilson filed this petition not with immediate plans to expand into its rural neighboring communities, but to facilitate the future advancement of its critical gigabit fiber-optic infrastructure over the long term," read a statement from the city in response to the FCC vote. "Going forward, the City will continue to expand its gigabit network in the same measured and responsible manner it has utilized in the past, as opportunities and resources allow. The FCC's decision will also permit the City to share its experience, knowledge and expertise with other communities to help foster the growth of critical economic infrastructure for their businesses and residents."

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