August 10, 2016 Last Updated 12:46 pm

Sixth Circuit strikes down municipal effort to expand broadband access in North Carolina and Tennessee

A Federal Communications Commission ruling designed to expand broadband access to rural communities was struck down today by the U.S. Court of Appeals for the 6th Circuit. The case involves North Carolina and Tennessee municipalities who had petitioned the FCC to be allowed to expand their services outside their boundaries in order to serve additional customers. Prior to the FCC ruling they were banned from doing so by their states, who set guidelines for their cities and villages.

The court ruled today that the states retain their rights to set boundaries, and that the FCC cannot preempt the states.

SixthCircuit-logo“What the FCC seeks to accomplish through preemption is to decide who—the state or its political subdivisions—gets to make these choices,” the court said. “The FCC wants to pick the decision maker for the discretionary issues of expansion, rate setting, and timeliness of rollout of services.”

The court appeared sympathetic to the goals of the FCC, if not their power to overrule state regulations.

“Our holding today is a limited one,” the court said. “We do not question the public benefits that the FCC identifies in permitting municipalities to expand Gigabit Internet coverage. Furthermore, we need not, and do not, address a number of legal issues debated by the parties, including (1) whether § 706 provides the FCC any preemptive power at all, (2) whether Congress, if it is clear enough, could give the FCC the power to preempt as it did in this case, (3) whether, if the FCC had such power, its exercise of it was arbitrary or capricious in this case, and (4) whether and to what extent the clear statement rule would apply to FCC preemption if a State required its municipality to act contrary to otherwise valid FCC regulations.”

The practical effect of the ruling will be to limit access to broadband in rural communities in North Carolina and Tennessee, two Republican controlled states. As of last year, it is estimated that 74 percent of households in urban areas had residential broadband connections, while only 64 percent of rural households enjoyed the same service. Further, only 55 percent of those living in rural areas have access to the speeds that currently qualify as broadband, while 94 percent of those living in urban areas have Internet connections fast enough to be considered to be broadband.

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