Promoting freedom, innovation, and growth

Connect with IPI

Receive news, research, and updates

August 21, 2014

The FCC Is Cruisin' for Another Bruisin'

 

Intended by Congress to be a specialist technical agency administering regulations affecting the communications industry, the Federal Communications Commission (FCC) has of late specialized in overreaching its authority and being slapped down by the courts. But having apparently failed to learn its lesson, it looks like the FCC is getting ready for its biggest overreach yet.

Some cities and counties around the country have decided that, since broadband is “critical infrastructure,” they are the ones who should be deploying it instead of those greedy cable and telecom companies. Besides, we all know that government can do things better, faster and cheaper than the private sector, right? After all, government can cut itself special deals that it doesn’t offer private companies, ignore its own regulations, use taxpayer dollars as an infinite line of credit, and play games with the bookkeeping that would get private sector executives thrown in jail. So why shouldn’t government get into the broadband business?

Of course, the results of such hubris have been almost always disastrous, with taxpayer dollars flushed down the drain, or (even worse) taxpayers left on the hook subsidizing money-losing broadband fiascos. It’s possible for a municipality to enter into a prudent public-private partnership with a broadband provider to meet the needs of its residents, but most often cities are enticed into going it alone by deceptive business plans featuring unrealistic adoption rates and ignoring significant ongoing upgrade and maintenance expenses. Competing against, rather than working with, private network providers.

Municipalities are usually creations of the state, so after observing so many taxpayer-funded disasters, many states have stepped in and placed prudent restrictions on whether and how municipalities can operate broadband networks. We’ve supported those restrictions as a proper exercise of state authority to protect its taxpayers from bad deals.

One of the few people left who thinks municipal broadband is a great idea is FCC Chairman Tom Wheeler. In his new role as Ozymandias of the Internet, Wheeler has announced his intention to brush aside all of these state laws through a doctrine known as FCC preemption.

The problem, once again, is that the FCC has no legal authority to do so, as Lawrence Spiwak has outlined. And that should put an end to the matter, especially since several states and state organizations have already made it clear that they will sue the FCC should it attempt to sweep aside laws properly debated and passed by the people’s duly elected representatives. And they will win.

But this is the FCC, after all. Its tendency to overreach its authority has been magnified by the Obama administration’s general contempt for limits on federal authority. So we can most likely expect the FCC to once again divert time and effort to a quixotic and almost certainly futile legal battle.

And it’s ironic to see the federal government, awash in debt and bad fiscal management, attempting to undo prudent state-level taxpayer protections, given that the states usually do a far better job of balancing their budgets and looking after taxpayer interests.


 

  • TaxBytes-New

Copyright Institute for Policy Innovation 2017. All Rights Reserved Privacy Policy Contact IPI.

e-resources e-resources