State Government, Industry Groups Oppose FCC Muni Broadband Pre-Emption
Several groups representing state government entities urged the FCC not to pre-empt North Carolina and Tennessee state laws restricting municipal broadband deployment, saying in filings posted Tuesday that pre-emption would constitute bad public policy. They also said the FCC doesn’t have authority under Telecom Act Section 706 to pre-empt state laws. Pre-emption opponents have repeatedly said the FCC can’t use Section 706 as a basis for granting pre-emption petitions from the Electric Bower Board of Chattanooga, Tennessee, and the city of Wilson, North Carolina (CD Sept 2 p2). Comments in the two proceedings -- dockets 14-115 and 14-116 -- were due Friday. Other pre-emption opponents and supporters who filed comments also noted the public policy implications of the petitions.
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The National Conference of State Legislatures, the National Governors Association and the Council of State Governments said in a joint filing that FCC pre-emption “only ties the hands of the state policymakers as they seek new strategies to protect the delicate fiscal and economic health of not only the state, but their cities and towns” (http://bit.ly/1nwuJhJ). The American Legislative Exchange Council said pre-emption would put state government “in an untenable situation in which they could not exercise governing responsibility over their own agents.” Pre-emption would also “strip taxpayer protections and creates the possibility of new public debt burdens” related to municipal broadband projects, ALEC said, saying North Carolina requires vote approval of plans to incur debt to fund municipal broadband projects. ALEC noted the financial woes of Utah’s UTOPIA broadband network and the LUS Fiber network in Lafayette, Louisiana (http://bit.ly/1pFfHvr).
Municipal broadband projects “routinely run deep in the red, forcing taxpayers to bail them out on a consistent basis,” ITTA said. “Often, they lack a sustainable, long-term business plan and resources to invest in maintenance and necessary upgrades as technology evolves.” Projects that duplicate existing private broadband reduce tax revenue generated by the private network and mean customers “pay more in taxes to subsidize the government-owned network,” ITTA said. States are also better able to “mitigate the risks” municipal broadband networks face, as they have “clear sovereign economic and fiscal responsibilities to the citizens and taxpayers of their state,” ITTA said (http://bit.ly/1vJZcRm). NTCA said states should have the ultimate power to limit municipal broadband, because states “often define the particular powers and functions of cities to address their proper functions and methods of financing. And, since the politics and economics of each State vary, these statutes are often different from state to state” (http://bit.ly/1rLf4ST).
Netflix said it supports pre-emption in part on policy grounds, saying the FCC’s “'competition, competition, competition’ mantra would be well-served by granting these petitions.” Municipal broadband on the whole would further the goals of the FCC National Broadband Plan by perpetuating the “virtuous circle of innovation,” promoting broadband adoption and encouraging competition with private ISPs, Netflix said. “This competitive dynamic is precisely what federal telecommunications policy seeks to encourage.” The company also countered pre-emption opponents’ claims about state municipal broadband laws, saying “state laws motivated by a concern that municipal broadband networks might fail should not ensure that they do” (http://bit.ly/1uhwjc9).
AT&T and CenturyLink opposed pre-emption. AT&T said it’s “skeptical” that government-owned broadband networks (GONs) “will help advance” broadband adoption. The telco said it doesn’t necessarily oppose GONs in areas where private broadband deployment is unlikely, but “there are better and more effective ways of spurring broadband deployment in these areas, including through the FCC’s Connect America Fund” (http://bit.ly/1uhy6xU). CenturyLink noted other opponents’ concerns about the viability of municipal broadband networks, which the telco said make it “reasonable for states to take steps to mitigate risks in this area” (http://bit.ly/1pmmzb9).
A coalition of public interest groups led by Common Cause and the Institute for Local Self-Reliance said they support FCC pre-emption, saying the municipal networks deployed in Chattanooga and Wilson “are two clear examples of how local governments can expand access to fast, affordable, and reliable Internet access. State laws restricting local authority to decide whether a public investment or partnership will improve Internet access have delayed and inhibited the deployment of fiber optic networks.” Washington, D.C., Council members David Grosso, an Independent, and Tommy Wells, a Democrat, also endorsed the filing. The other groups that endorsed the filing were the Benton Foundation, Center for Media Justice, Media Mobilizing Project, National Hispanic Media Coalition, Public Knowledge, The Utility Reform Network and the Writers Guild of America, West.
Restrictions on local authority on municipal broadband are unnecessary, because municipalities typically do extensive planning and research before deploying a network, and such deployments may already go through state regulatory approvals, the public interest groups said. They blamed major telcos and cable companies for the existence of state laws restricting municipal broadband, noting that these companies’ lobbying presence within state governments has resulted in a “one-sided process of decision-making in which local interests can be railroaded” (http://bit.ly/1tXVGAt).