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FCC makes push for more local broadband services

The agency plans to vote on a proposal later this month that strikes down provisions in state laws limiting the expansion of municipal broadband networks.

Federal Communications Commission Chairman Tom Wheeler is flexing his regulatory muscle with a plan to strike down parts of two state laws that make it difficult for communities to get fast broadband.

FCC Chairman Tom Wheeler with his latest push: more local broadband services. Screenshot by Marguerite Reardon/CNET

Wheeler on Monday said he will circulate a proposal later this week that will grant in large part petitions filed by two municipal broadband providers asking that the FCC preempt provisions of laws in North Carolina and Tennessee that restrict the ability of communities to provide broadband service. The FCC believes that certain provisions of these laws are barriers to broadband investment and competition, and that it has authority to strike down the laws. The proposal will be voted on at the agency's next open meeting on February 26.

Current laws in some states prevent municipalities from creating and running their own broadband service. Wheeler said in a statement that many cities recognize the importance of broadband for job creation and economic growth, but have been unable to address the lack of such networks because of those laws.

He said the FCC should use its authority to make sure that doesn't happen.

"Many communities have found that existing private-sector broadband deployment or investment fails to meet their needs," he said. "They should be able to make their own decisions about building the networks they need to thrive. After looking carefully at petitions by two community broadband providers asking the FCC to preempt provisions of state laws preventing expansion of their very successful networks, I recommend approval by the commission so that these two forward-thinking cities can serve the many citizens clamoring for a better broadband future."

Wheeler's proposal is just the first step in a larger battle to dismantle laws in more than 19 states that prohibit or limit community-built broadband networks. President Obama put his weight behind the effort last month ahead of his State of the Union address, when he urged the FCC to preempt state laws and accept the filed petitions.

"In too many places across America, some big companies are doing everything they can to keep out competitors," Obama said last month. "In some states it is virtually impossible to create networks like the one you have in Cedar Falls. Enough is enough; we're going to change that."

If accepted by the full FCC, Wheeler's proposal will only preempt parts of state law in Tennessee and North Carolina. Other communities affected by similar laws in other states will have to petition the FCC separately. But FCC policy experts said that the analysis used to address the first two petitions can be used in evaluating future petitions asking the FCC to step in.

The petitions were filed in July by Chattanooga's Electric Power Board and the government of Wilson, N.C., both of which have already built gigabit broadband networks and are looking to expand those networks. But state laws in Tennessee and North Carolina limit their ability to expand.

FCC officials made it clear that the laws they examined in their analysis did not ban municipal broadband networks outright, but instead put onerous requirements on cities looking to build these networks. In other words, the laws don't prohibit communities from offering broadband, but instead dictate how they may offer the services.

The government of Wilson argued in its petition that the onerous requirements of the state law made it impossible for it to expand its offer to other parts of the community including areas where private sector broadband companies are only offering download speeds of 768 kilobits per second, a far cry from the FCC's new definition of advanced broadband services, which now is considered speeds of 25 megabits per second.

The Tennessee law requires community-based networks adhere to private sector regulations to level the playing field, which only apply to municipal networks. The law also bars communities from offering discounts on their broadband services that are similar to promotions offered by private sector companies. And it imposes extensive delays by requiring a voter referendum for any debt that is used to finance construction or expansion of municipal networks.

The FCC believes it has authority to preempt these state laws through a provision of the 1996 Telecommunications Act, so-called Section 706, which the agency uses as a basis for all of its regulatory authority over the Internet.

In that section, it says the FCC "shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans." It also says the agency should use that authority to "promote competition" in local markets and "remove barriers to infrastructure investment."

But opponents, such as Republican FCC commissioner Ajit Pai, say that the FCC does not have this authority.

FCC officials say they expect to defend their actions in court, and they feel confident that their arguments will hold up.

Congressional Democrats applauded the FCC's move.

"Today's proposal by the FCC to lift restrictions that are preventing these two communities from expanding their own broadband infrastructure is a major win for local choice and competition," Sen. Edward J. Markey (D-Mass.), a member of the Commerce, Science and Transportation Committee said in a statement. "Choice in broadband access is not as broadly available in the United States as it should be, and each local community deserves the opportunity to connect its citizens and businesses with the resources and opportunities that competitive broadband supports."