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IPI's Advocacy on Municipal Broadband Networks: A 12-Year Update

A couple of weeks ago, back on August 29th, the Federal Communications Commission (FCC) once again lost a major case when the US Court of Appeals for the Sixth Circuit ruled unanimously in favor of the states and against the FCC’s brazen attempt to overrule state laws regulating municipal (government-owned) broadband networks.

While 20 states have passed various laws limiting government-owned networks, the two in question were in Wilson, North Carolina and Chattanooga, Tennessee. Of course it’s entirely appropriate for Tennessee to determine the laws for Tennessee municipalities and for North Carolina to similarly govern what happens within North Carolina. After all, the states create their municipalities and set the scope and terms of their power.

IPI was involved in the municipal broadband issue from the very start. In fact, as far back as 2004 IPI was warning against cities and counties deciding they knew better than private companies how to run broadband networks. IPI’s Barry Aarons wrote “Just Say No to Municipal Broadband Networks” in December of 2004, warning that they are a bad deal for taxpayers, and also raising the (then) novel argument that government-ownership of broadband networks raised the spectre of government control of content over those networks.

As a result of the bad experience of many cities and counties, North Carolina passed a very prudent law regulating (but NOT banning) government-owned networks within the state of North Carolina. IPI supported the effort and had input into their process with Bartlett Cleland’s 2011 piece “Why North Carolina Should Restrict Municipal Broadband Schemes.” Essentially, the North Carolina legislation required government-owned networks to do their accounting in an open and transparent manner, and to adhere to various provisions designed to protect taxpayers and make sure governments weren’t favoring their own networks over private sector network providers. At the same time, we were advocating similar prudent policies in other states (Letter Supporting Restrictions on Municipal Networks in Georgia).

When the FCC announced they were going to unconstitutionally sweep aside laws that were properly passed by the states, we were aghast at the FCC’s contempt for federalism and the assumption that a tiny number of appointed, activist regulators could sweep aside laws passed by the elected representatives of the people of North Carolina and Tennessee. Once we got up off the floor, in August of 2014 we wrote these comments (IPI Comments), which focused on the federalism question, and which we’re still particularly proud of.

Nonetheless the FCC proceeded with their unconstitutional power grab. Just the heading of the news stories (FCC Preempts Laws Restricting Community Broadband in NC/TN) sends a chill up the spine of anyone who understands the basics of the Constitution.

And, thankfully, the Sixth Circuit unanimously slapped the FCC down, finding that there was simply no legislation that authorized the FCC to do what it did (FCC Admits Defeat in Municipal Broadband, Won’t Appeal Court Loss). Of course, we would argue that even if there were such legislation, that legislation would be unconstitutional.

We celebrated the Court’s slapdown of the FCC, albeit with a bit of unease (The Constitution Catches Up with Chairman Wheeler). Our constitutional order seems to be in a pretty tenuous situation when three unappointed regulators can threaten it, and only a court of three appointed judges can stop them. Where is the primacy of elected representative government? And where is Congress?

Anyway, this is part of what we do at IPI. We recommend good policy, advise those trying to implement good policy, oppose those who are trying to implement bad policy, and explain it all on an ongoing basis to the American people. In case you were wondering what a think tank does, like most people I run into at social occasions.

Oh, and along the way, IPI designed a better, free-market way to get broadband to unserved areas: the Broadband Enterprise Zone, which we described in 2009 comments to the FCC, and also here. Hopefully someday some wiser, more prudent FCC and Congress will see the merits of such an idea.

And we’ll be there when the time is right, with your help!

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