Wheeler Proposing Muni Broadband Pre-Emptions for Two Cities

The order, expected to be taken up and approved at the Feb. 26 commission meeting, would specifically approve only the pre-emption petitions filed by the Electric Power Board (EPB) of Chattanooga and Wilson, North Carolina, the officials said. It could set a precedent guiding how the commission handles similar petitions, said the officials who spoke on the condition that they not be identified by name. The order, the officials acknowledged, wouldn't affect outright bans on municipal broadband. Emphasizing that some may disagree, an agency official said the FCC views Nebraska, Montana and Pennsylvania as having flat bans.

The pre-emptions, which would be the first time the agency has taken up municipal broadband laws, are expected to draw legal challenges (see 1502020048">1502020048). The FCC is “confident” the pre-emptions would be upheld, an agency official said. The move would benefit customers by allowing more competition, which in turn would bring better services and lower prices, as well as help schools and governments improve their services, including public safety, an agency official told reporters.

“Communities across the nation know that access to robust broadband is key to their economic future -- and the future of their citizens,” Wheeler said in a statement. “Many communities have found that existing private-sector broadband deployment or investment fails to meet their needs. They should be able to make their own decisions about building the networks they need to thrive.”

The agency, in a fact sheet released Monday, tied the draft order to what it portrayed as Wheeler’s attempts to increase broadband completion. It cited his May remarks to the House Communications Subcommittee that the agency should use “all the tools at our disposal to encourage competition wherever it is possible. One place where it may be possible to encourage competition is municipally-owned broadband systems.”

EPB believes “Internet access is the critical infrastructure for the 21st century and that communities should have the right, at the local level, to determine their broadband futures,” a spokeswoman said. “For the sake of our neighboring communities who do not have access to any broadband, we hope the FCC will agree with our position.”

Commissioner Mignon Clyburn will review Wheeler’s proposal, she said in a statement to us. She has “long advocated removing barriers to broadband deployment, particularly those that would limit communities from responding to local demands for high speed internet access -- a key enabler for improving lives and viability,” Clyburn said. Commissioner Jessica Rosenworcel’s office didn't comment, but pointed to her Jan. 14 remarks saying President Barack Obama’s steps for removing barriers to municipal broadband “will put us on a course to grow broadband opportunity in more communities by taking advantage of local know-how and putting a premium on competition.”

Republicans are expected to oppose the order. Commissioner Mike O’Rielly’s office pointed to his Friday blog post in which he said many state limitations on municipal broadband “appear to be justified practices by state governments and should be excluded from any preemption discussion. Beyond the extensive rhetoric and absent Congressional direction, nullifying state-enacted taxpayer protections to further a political goal sends the Commission down an extremely troubling path.”

The FCC's description of Wheeler's draft order “sits with what I assumed, but I do think that the precedent is incredibly important,” said Next Century Cities Policy Director Christopher Mitchell. NCC and the Coalition for Local Internet Choice (CLIC) “will remain in support of local choice” if FCC pre-emption faces a legal challenge, said Mitchell, who's also CLIC’s senior adviser.

“Chairman Wheeler substantially understates the extent to which existing municipal systems have run into financial difficulties and burdened taxpayers,” Free State Foundation President Randolph May said. “What is revealing -- in a way that is very telling about Wheeler’s mindset -- is that he thinks he knows more about what is better for a state’s taxpayers than the state legislators that have enacted the restrictions on municipal telecom provision. Wheeler doesn’t acknowledge, as a constitutional matter, that there are no 'citizens' of municipalities, only of states.” May predicted the courts would toss the pre-emptions.

“Taxpayers should have the final say on debt-financed infrastructure,” Richard Bennett, visiting fellow at the American Enterprise Institute's Center for Internet, Communication, and Technology Policy, said in a statement. “In general, any taxpayer-funded network must provide wholesale access to competent network operators at competitive prices or the rhetoric about consumer choice rings hollow. We don’t want to replace a potentially competitive broadband market with a government monopoly.” Broadband providers didn't comment.

Most community broadband projects haven't failed and haven't needed public bailouts, one agency official said. Claims that municipal broadband poses unfair competition to private broadband providers are largely “unfounded,” the official said, saying many communities have provided service in areas underserved by the private sector. The FCC has jurisdiction over interstate communications, another official said. There’s “no question,” Internet access crosses state lines, the official said. Communications Act Section 706 directs the commission to take immediate action when broadband is not being deployed in a reasonable and timely fashion, a determination the agency approved Thursday (see 1501290043). Officials emphasized that neither North Carolina nor Tennessee laws deal with whether municipalities can build their own broadband networks but do limit how they can do it. Other municipalities from other states can also petition for pre-emption and show how their circumstances are akin to those of Chattanooga and Wilson, the officials said.