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The Legal History of Municipal Broadband

December 4, 2014

Congress ChamberAs we approach the end of a year in which the debate over government-owned broadband heated up – due to the Federal Communications Commission’s (FCC) desire to overturn state municipal broadband laws – we wanted to direct our readers to an excellent legal history of this discussion by FiscalNoteBlog.

FiscalNoteBlog explains that, several years ago, the FCC itself said it lacked authority to overrule state broadband laws and that, when cities in Missouri disagreed and took the issue to the courts, the Supreme Court sided against preemption. In his decision, Supreme Court Justice David Souter even made an argument similar to one the Coalition for the New Economy has made routinely: that it is unfair for the government to provide a service … and then to regulate that service. Here is how Fiscal Notes explains Justice Souter’s decision:

“Justice Souter concluded that federal preemption of a state law that regulates the actions of state municipalities (as opposed to private actors) would produce unintended results, because ‘when a government regulates itself (or the subdivision through which it acts) there is no clear distinction between the regulator and the entity regulated.’”

FiscalNoteBlog also says, “Souter also argued that the Court has always been suspect of Federal laws that come between a municipality and its state.”

After the Supreme Court issued the ruling in this case, several states went ahead and did what the court said they could do: set standards for municipal broadband. FiscalNoteBlog outlines the differences between the resulting laws and, in doing so, acknowledges there are very few outright bans on government-owned broadband. (Gigaom also recently published an overview of these state laws.) Indeed, it shows most of these laws simply seek to put municipal broadband on the same playing field with privately-provided broadband or to protect taxpayers.

FiscalNoteBlog then skips to the present, noting the FCC’s about face on this issue and arguing that if the commission does decide to go ahead and overrule state laws the question “will undoubtedly be challenged in court.”

Which means … this issue won’t be settled by the new year. Stay tuned in 2015 to see what happens.