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Appeals Court Says FCC Overstepped In Overturning State Muni Broadband Laws

August 11, 2016

iStock_000003994351MediumIn a 3-2 party line vote in February 2015, the Federal Communications Commission (FCC) voted to overturn laws in North Carolina and Tennessee that limited the growth of municipal broadband networks in their respective states.

Yesterday, a three-judge panel from the U.S. Court of Appeals for the Sixth Circuit ruled against the FCC, arguing the commission didn’t have the authority to preempt state laws.   In its decision, which was unanimous, the court explained the FCC’s preemption required “at least a clear statement [of authority] in the authorizing federal legislation” and that Section 706 of the Telecommunications Act of 1996, on which the FCC relied to prove its authority, “falls far short of such a clear statement.”

Ars Technica called yesterday’s decision a “big” loss for FCC Chairman Thomas Wheeler, who supports municipal broadband networks. Chairman Wheeler said yesterday that the FCC will consider how to respond to the court’s ruling. Its options include appealing to the U.S. Supreme Court or requesting a review of the case by all the judges on the Sixth Circuit.

The two FCC commissioners who had dissented from last February’s ruling praised the Sixth Circuit’s decision.

Commissioner Ajit Pai said, “I applaud the Sixth Circuit’s decision. In my statement last year dissenting from the Commission’s decision, I warned that the FCC lacked the power to preempt these Tennessee and North Carolina laws and that doing so would usurp fundamental aspects of state sovereignty. I am pleased that the Sixth Circuit vindicated these concerns. “ Pai argued, “The court’s decision is a big victory for the rule of law and federalism—a constitutional principle that lies at the heart of our system of government.”

Commissioner Michael O’Rielly said, “[I] am heartened by Sixth Circuit U.S. Court of Appeals’ decision. The FCC clearly tried to invoke imaginary authority and finally was called out by a court for doing so.” O’Reilly also made a strong statement against municipal broadband in general. He argued, “Unless Congress specifically authorizes FCC intervention, States rightly can limit government-operated broadband networks in order to protect their citizens’ pocketbooks and good senses. Contrary to some beliefs, municipal networks are not panaceas to solving any lack of ubiquitous broadband, but instead unfairly distort the marketplace.”