In a defeat for advocates of municipal broadband networks and increasing broadband competition, the U.S. Court of Appeals for the Sixth Circuit yesterday reversed a 2015 FCC order preempting anti-municipal broadband statutes in Tennessee and North Carolina. The court’s order is here.  These laws have been drafted by or for and pushed by incumbent telco and cable providers opposed to municipal competition.

I filed an amicus curiae brief in the case on behalf of Next Century Cities and the Institute for Local Self-Reliance. We supported the FCC decision and provided the court with data about numerous highly successful municipal broadband networks. However, the court did not address the merits of the FCC’s decision to preempt the obviously anti-competitive laws.  Rather, it held that Congress had not clearly stated its intention to give the FCC authority to preempt such laws and absent such a clear statement the FCC lacked the power to do so.  In doing so, it noted that the “holding today is a limited one.  We do not question the public benefits that the FCC identifies in permitting municipalities to expand Gigabit Internet coverage.”

The unfortunate decision means that it will be more difficult to build and expand municipal broadband networks.  For a good discussion of the immediate effects of the decision on towns starved for real broadband service, take a look at this CLIC blog post.

But the battle to bring broadband service to everyone who wants it and to create competition for incumbents will continue on several fronts over the next year.  Supreme Court review is one option.  The FCC or the municipalities that lost in the Sixth Circuit may petition the U.S. Supreme Court to take the case. Congressional action in the 2017 session, beginning in January, is also a longshot possibility.  It would be procedurally simple but politically difficult for Congress to pass a law explicitly giving the FCC the right to preempt these types of anticompetitive state laws.

Regardless of what happens on the federal level, there will be substantial activity in state legislatures. The harm these anti-competitive laws cause to state and local economic development and citizen welfare is becoming clearer.  There will be attempts in various state legislatures – certainly including both Tennessee and North Carolina, and probably including many of the other 20 or so states that have similar laws – to change the laws in order to benefit citizens in those states and bring broadband to unserved areas.  In fact, efforts are apparently already underway: As with so much of technology and law these days, stay tuned for further developments.