Appeals court overturns FCC order on municipal broadband

Published 12:10 am Sunday, August 14, 2016

By Amanda Raymond

SALISBURY — The expansion of municipal broadband services will be left to the states after a federal appeals court ruling on Aug. 10.

The Sixth Circuit Court of Appeals overturned a ruling by the Federal Communications Commission that would have allowed a federal telecommunications law to preempt certain state laws.

The Telecommunications Act of 1996 gave the FCC the responsibility to ensure broadband is available to all Americans in a “reasonable and timely fashion” and remove any barriers to infrastructure investment, according to the majority opinion of the appeals court.

Wilson, N.C., and Chattanooga, Tenn., both have municipal broadband services that they wanted to extend beyond their city’s limits, but North Carolina and Tennessee both have laws that prohibit them from doing so.

In 2014, the Electric Power Board of Chattanooga and the city of Wilson filed petitions with the FCC so that they might be able to extend their services.

When the FCC heard the case in 2015, attorneys for the states argued that the state laws “leveled the playing field” for private providers and prevented municipal broadband services from “crowding out” private providers.

The FCC found that the private providers in Chattenooga’s service area improved their download speeds since the service started. Time Warner did not raise its prices where Wilson’s broadband was available while it did raise rates in other areas without the municipal broadband service.

As far as crowding out private providers, the FCC found that Wilson’s broadband service had only penetrated 33.7 percent of the market, allowing private providers plenty of potential customers.

The FCC determined that the laws in both states served as barriers to the deployment of broadband and decided its order would overrule parts the states’ statutes.

Both states filed for appeals and the case was heard in the Sixth District Court of Appeals. The court decided on Wednesday that the FCC did not have the authority to overrule state laws because there was no clear statement in the Telecommunications Act of 1996 that allowed the FCC to do so.

Senator Thom Tillis (R-N.C.) issued a statement approving of the appeals court’s decision.

“Today’s ruling affirms the fact that unelected bureaucrats at the FCC completely overstepped their authority by attempting to deny states like North Carolina from setting their own laws to protect hardworking taxpayers and maintain the fairness of the free market,” he wrote.

Impact on Fibrant

The appeals court’s decision has no short-term effects on Fibrant, Salisbury’s municipal broadband network.

Kent Winrich, director of Broadband and Infrastructure Services, said Fibrant was still operating within North Carolina’s law, which also states that Fibrant is allowed to extend beyond the city if voted in by the Rowan County Board Commissioners or town boards.

Winrich said they still have plenty of places to expand to in the county, including places in Rowan County that only have dial-up Internet service.

“We’re 45 minutes from Charlotte and there are areas that don’t have Internet connectivity,” he said.

Winrich did say that he would like to see North Carolina’s law limiting municipal broadband overturned.

“I think it’s a hindrance to economic development for a lot of areas,” he said.

Councilman David Post said he did not agree with the appeals court’s decision. Post has been working with city employees to help figure out some of the financial issues with Fibrant.

“I disagree with the decision because the court somehow concluded that a 1996 federal law passed by an all-Republican Congress was not specific enough to address a state law passed by a Republican state legislature 15 years later,” he wrote in an email. “No pre-Google, pre-smart phone lawmaker in 1996 could have imagined Internet needs today.”

He also said the case may affect Fibrant in the long term if the service ever wanted to extend beyond the county.

The next step in the case would be an appeal to the Supreme Court, but Post said that is unlikely. The Supreme Court hears cases when two courts hear the same facts but come to different decisions, and that did not happen with this case.

Read more of Post’s take on the court’s decision on page 2D.

Contact reporter Amanda Raymond at 704-797-4222.