FCC Overstepped Authority by Regulating Municipal Broadband Projects, Court Rules

The Court of Appeals for the Sixth Circuit ruled against the Federal Communications Commission’s (FCC) plan that would allow municipalities to build their own broadband network – superseding state laws in Tennessee and North Carolina that explicitly prohibit such projects. The FCC claimed that the Telecommunications Act of 1996 granted it implicit power to preempt state laws that are intended to support open markets for private-sector utility companies. In Wilson, NC, and Chattanooga, TN, the municipalities intended to “use the FCC’s now-overturned power to build or extend their networks in direct competition with existing broadband providers,” according to GovTech.

The FCC “claimed similar authority under Section 706 for its Open Internet Order, which a federal court in Washington upheld in June,” according to Forbes. The panel of judges, however, ruled that in this case the FCC was attempting to regulate the political subdivisions within state borders thus intruding the power of state governments. The three-judge panel also concluded that for the FCC to have such power, it must be explicitly granted to be legally tenable.

In their findings, the Sixth Court of Appeals highlighted that Chattanooga’s gigabit Internet service has helped spur job growth and attract businesses to the region. Critics of the ruling contend that the ruling hinders the spread of cheap, publicly run broadband service to spur economic prosperity and social mobility. Proponents of the ruling, including state lawmakers in NC and TN, contend that “private broadband providers would have difficulty competing with service subsidized by local governments” thus potentially creating public-sector monopolies.