Court Says FCC Can’t Stop States from Blocking City Broadband Efforts

A federal appeals court yesterday ruled that the Federal Communications Commission (FCC) overstepped its bounds when it issued an order to preempt state rules limiting the development of municipal broadband networks in Tennessee and North Carolina.

The decision was welcomed by the telecom industry, which has in some places fought against city-led efforts to expand broadband services to more people. Supporters of local broadband expressed disappointment and called the ruling a setback for expanding Internet access to underserved areas of the country.

In a mixed opinion from the three-person court, the two prevailing judges said that last year's FCC order did not fall within its authority under the 1996 Telecommunications Act. However, the court's decision did not raise questions about the value of municipal broadband in itself.

Not Questioning Public Benefits

"Our holding today is a limited one," wrote John Rogers and Denise Page Hood, judges for the U.S. Court of Appeals for the Sixth Circuit. "We do not question the public benefits that the FCC identifies in permitting municipalities to expand [g]igabit Internet coverage."

However, there is no clear statement in the Telecommunications Act of 1996 that gives the FCC clear authority to preempt state regulations affecting cities in those states, the judges said. "The FCC order essentially serves to re-allocate decision-making power between the states and their municipalities," according to the judges. "The preemption order must accordingly be reversed."

The finding is "a victory for the rule of law," Walter McCormick, president of the USTelecom trade association, said in a statement. "The FCC's authority is not unbridled, it is limited to powers specifically delegated by the Congress, and it does not extend to preemption of state legislatures' exercise of jurisdiction over their own political subdivisions," he said.

Following yesterday's ruling, FCC Chairman Tom Wheeler and the other four members...

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