Feds Nullify State Laws on City Internet

Net neutrality may get more attention, but the FCC is also making a major push for community Internet service—a priority for Obama.

Laying down fiber-optic cable in Louisville, CO.  (National Journal)

The Federal Communications Commission voted Thursday to overturn laws in Tennessee and North Carolina that restrict the ability of local government to provide Internet service to their own residents.

Chattanooga, Tenn., and Wilson, N.C., first filed petitions last year asking the FCC to overturn their states' laws on local broadband. Both cities are currently providing Internet service, but their state governments had prevented them from expanding the projects to more residents. Last month, President Obama urged the FCC to grant the petitions as part of his push to expand access to high-speed Internet.

Telecom and cable companies have been lobbying for the state laws around the country, arguing that it's not fair for them to have to compete with government-owned Internet providers. The companies contend that the city projects discourage private investment and are often expensive failures.

But FCC Chairman Tom Wheeler argued that if cities want to invest their own money to ensure that homes and businesses have access to high-speed Internet, then state laws shouldn't stand in their way.

"The bottom line of these matters is that some states have created thickets of red tape to limit competition," Wheeler said Thursday. "What we're doing today is cutting away that red tape, consistent with Congress's instruction to 'encourage the development of broadband' and to 'promote competition.'"

The issue is one of the most controversial that the FCC will vote on this year. But it was largely overshadowed Thursday by the even more explosive debate over net-neutrality regulations.

Republicans fiercely oppose both the net-neutrality rules and the overturning of state broadband laws, and both actions are likely to prompt legal challenges.

The two Republicans on the five-member FCC, Ajit Pai and Michael O'Rielly, voted against nullifying the state laws. They argued that states should be free to set their own policies—including restrictions on local governments.

The FCC's action to boost local Internet "disrupts the balance of power between the federal government and state governments that lies at the core of our constitutional system of government," Pai said.

The Republicans said they aren't necessarily opposed to all municipal broadband projects, but that states should be able to impose restrictions on cities to protect taxpayer money. They acknowledged that the federal government can preempt state laws, but argued that Congress has not given the FCC clear authority to act against state broadband laws.

By granting the petitions, the FCC struck down the laws in those two states, but other state restrictions remain in effect. Other cities looking to build or expand their own Internet projects may soon file petitions with the commission.

Kaveh Waddell contributed to this article