Court Throws Out FCC’s Municipal Broadband Rule

In a victory for state authority, the United States Court of Appeals for the Sixth Circuit determined the Federal Communications Commission (FCC) lacked the necessary authority to preempt state laws limiting municipal broadband.

The nearly unanimous opinion—one judge dissented on a tertiary topic—affirmed the ability of states to regulate their own municipalities. The court held that Section 706 of the Telecommunications Act of 1996 did not provide a clear enough statement for the FCC to preempt Tennessee’s laws and North Carolina’s laws controlling their municipalities. The laws, which allowed municipalities to run broadband networks, included taxpayer protections. The taxpayer protections required the municipalities to jump through additional hoops to ensure broadband profitability and competition.

The Electric Power Board of Chattanooga, Tennessee and the City of Wilson, North Carolina wanted to expand without meeting their state’s laws protecting the taxpayer, and petitioned the FCC for relief. The FCC granted the relief, preempting the two state regulations and the two states sued to overturn the FCC’s rule.

Today’s opinion sided with the states, overturning the FCC’s rule. According to the court, Supreme Court cases, Nixon v. Missouri Municipal League and Gregory v. Ashcroft require a “clear statement” in federal law indicating Congressional intent to allow a regulatory agency to preempt state laws.

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For the rest of the article, including pull quotes from the decision, please visit the original post at the American Legislative Exchange Council's website.