Federal Review of State Barriers to Municipal Broadband Networks

August 25, 2014

Internet BackgroundToday, a significant number of states ban or restrict cities, towns, and other local municipal governments from constructing, owning, and operating municipal broadband data networks.  Recently, two cities asked the Federal Communications Commission (FCC) to consider exercise of federal law to pre-empt those limitations.  The FCC has requested public comment as it considers such pre-emption.

A number of local governments have considered building and operating their own broadband networks.  Several communities across the country already operate these municipal broadband networks successfully.  Bristol, Virginia is one such community.

Municipal broadband networks are attractive to local governments as they can provide an efficient method to address data service needs of government in addition to those of individual citizens and businesses.  They are also popular to the extent that they provide a method to bring broadband service to communities that are not economically attractive to commercial broadband service providers.

Commercial broadband service providers generally oppose municipal broadband systems.  The commercial providers essentially argue that municipal networks place local governments into competition with commercial vendors.  They claim that such competition is unfair, as municipal broadband providers can use public funds to subsidize their service offerings, giving the municipal service providers an unreasonable competitive advantage.

Commercial broadband providers have taken their case to many state legislatures.  They have been highly successful persuading state legislators that use of municipal broadband networks should be restricted.  Part of that success stems from the willingness of the commercial vendors to invest significant funds into lobbying efforts in state legislatures across the country.

Chattanooga, Tennessee and Wilson, North Carolina want to enlist federal assistance in the battle over municipal broadband systems.  Those two cities formally requested that the FCC pre-empt laws in their states that restrict municipal broadband network development and use.  The FCC has asked for public comments as it considers both of the requests.

Chattanooga and Wilson contend that federal pre-emption is necessary to permit the local authorities in those communities to meet demand for broadband services expressed by the citizens of those communities.  The cities argue that current state laws impede the ability to provide critical telecommunications services to their citizens.

Many sections of the United States are currently underserved with regard to broadband data access.  Other regions have broadband access, but the pricing and quality of service associated with that access remain unsatisfactory.  These shortcomings are significant barriers to efforts to achieve universal broadband access and to use broadband as an engine driving economic growth.

Other nations routinely enlist government operated broadband networks as part of their efforts to modernize and expand data service capabilities.  In order to compete effectively with those other countries, the United States should apply all available resources to help make its telecommunications infrastructure more effective and comprehensive.  Municipal broadband networks have an important positive role to play in that broader effort, thus impediments to their development and use should be minimized.