Appeals Court Blocks FCC's Public Broadband Expansion Plans - InformationWeek

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8/11/2016
12:05 PM
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Appeals Court Blocks FCC's Public Broadband Expansion Plans

This week, a US appeals court ruled the FCC overstepped its bounds by trying to override state laws that prevent the creation of municipal broadband services. The FCC claimed these new services would provide jobs, as well as better service for businesses and individuals.

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The US 6th Circuit Court of Appeals has struck down a Federal Communications Commission order concerning municipal broadband expansion, ruling that the FCC overstepped its authority by overriding state laws limiting municipal expansion.

The FCC, which passed the order in 2015 by a 3-2 vote, had relied on Section 706 of the Telecommunications Act of 1996 for the authority to preempt state laws to speed broadband deployment, but the court found the statue "falls short" in providing the FCC with sufficient authority.

The court also noted there are no statutes or FCC regulations requiring "municipalities to expand or otherwise to act in contravention of the preempted state statutory provisions."

The Aug. 10 decision (PDF) is a setback for FCC Chairman Tom Wheeler and for the commission's plans to encourage local broadband projects, and a victory for commercial broadband providers.

(Image: seb_ra/iStockphoto)

(Image: seb_ra/iStockphoto)

"While we continue to review the decision, it appears to halt the promise of jobs, investment and opportunity that community broadband has provided in Tennessee and North Carolina," Wheeler wrote in a statement. "In the end, I believe the Commission's decision to champion municipal efforts highlighted the benefits of competition and the need of communities to take their broadband futures in their own hands."

The appeals court cited a Tennessee law enacted in 1999 that said any municipality operating an electric plant is authorized to offer cable services, video services, and internet services -- but that authority is limited to "within its service area."

That law limits, for instance, EPB of Chattanooga, one of America's largest publicly owned electric power providers, from providing internet and cable service beyond its electrical system's footprint.

"In the past 18 months, over 50 communities have taken steps to build their own bridges across the digital divide," Wheeler continued. "The efforts of communities wanting better broadband should not be thwarted by the political power of those who, by protecting their monopoly, have failed to deliver acceptable service at an acceptable price."

The National Association of Regulatory Utility Commissioners (NARUC), which opposed the FCC action, released a statement applauding the court's decision, calling the FCC's actions an offense to the US Constitution.

"The law is clear. The Court recognized the simple fact that nothing in the Telecommunications Act provides the FCC with the power to give authority to a state entity that is not granted by that state's constitution or legislature," NARUC committee on telecommunications chair Chris Nelson wrote.

[Read more about the FCC's plans for 5G networks.]

Republican FCC commissioner Ajit Pai also wrote in his support of the ruling that the court's decision was "a big victory for the rule of law and federalism" and urged the FCC to focus on deregulation.

"Rather than wasting its time on illegal efforts to intrude on the prerogatives of state governments, the FCC should focus on implementing a broadband deployment agenda to eliminate regulatory barriers that discourage those in the private sector from deploying and upgrading next-generation networks," he wrote.

USTelecom president Walter McCormick added his opinion as well, noting that FCC's authority does not extend to preemption of state legislatures' decisions.

"As an industry that shares the commission's interest in accelerating broadband deployment, we would suggest that the best way for the FCC to accomplish its goals is to concentrate on eliminating federal regulatory impediments to innovation and investment -- where there remains to be much that can and should be done," McCormick wrote.

Nathan Eddy is a freelance writer for InformationWeek. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary film, The Absent Column. He currently lives in Berlin. View Full Bio

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hho927
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hho927,
User Rank: Ninja
8/16/2016 | 2:01:12 PM
Re: Broadband Competition
Level 3 sells to anybody. Big Telco sells only to sub-sellers and end users.

ATT pulled the line to our company free. The next door knocked on our doors and said ATT wants 15 grands for pulling the fiber line into the block. We should share the cost. I was like "What!!!!! The main line is 1 block away.  We have fiber & didn't cost us anything except a long term contract."
SaneIT
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SaneIT,
User Rank: Ninja
8/15/2016 | 8:16:38 AM
Re: Broadband Competition
I thought that if they laid the fiber that they had to allow other carriers to lease it and this is why we only see Google racing to install fiber in select cities and see municipalities running their own fiber.  It is expensive to run so no one wants to take the initial hit.  The funny thing though is that the carriers typically charge one customer for that initial run then everyone jumps on.  When I had fiber pulled into your building I worked out a deal with our carrier that we didn't pay a flat fee up front but signed an extended term contract to make sure they recovered their costs through our service contact.  After the fiber was pulled, I got calls from every ISP in the area offering me fiber.  Things may be different in the consumer broadband arena but having no real options in most of the country is very irritating. 
hho927
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hho927,
User Rank: Ninja
8/12/2016 | 2:13:12 PM
Re: Broadband Competition
If you run new fiber lines (like Google) in areas, then you're allowed to shut others out of your lines.

If it's not your lines, you can't use it. Build yours.

I don't see anything wrong with that.

Companies hesitate to run new lines because it's very difficult to uproot establishments. It's all business decision. They don't want to touch areas likely give them bad ROI.

It's like building the bullet train from nowhere to where in California. ROI will be negative. Govn't forced it down our throats (higher & higher taxes)

BTW: Thanks to FCC my dsl line now is much slower.
SaneIT
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SaneIT,
User Rank: Ninja
8/12/2016 | 8:31:24 AM
Broadband Competition
""In the past 18 months, over 50 communities have taken steps to build their own bridges across the digital divide," Wheeler continued. "The efforts of communities wanting better broadband should not be thwarted by the political power of those who, by protecting their monopoly, have failed to deliver acceptable service at an acceptable price.""

 

This is exactly why this ruling is important, we have many people who want to compete in this market but they are being shut out by the entrenched providers.  We had a similar fight over telephone lines decades ago and all we heard was how horrible everything was going to be, yet service improved and rates dropped.  Now the wired telephone is becoming a thing of the past and I think the broadband providers need to think long and hard about that.  They are fighting for control of copper cables that will soon be obsolete.  If they don't want to pull fiber but someone else does, then they need to get out of the way.  They can hug their networks and squeeze every last penny out of them but at the rate they are moving cellular connections into the home are going to pass them in performance and price, at that point they are sunk.
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