January 30, 2015 - 3:32 pm
By Michael O'Rielly | Commissioner

Those who wish to preempt state laws impacting municipal broadband networks often cite up to 21 states that have limitations or restrictions on such networks. A closer inspection of the specific state laws being criticized, however, offers a much different picture regarding the scope and particulars of the specific state limitations. In other words, if the Commission were to preempt state laws (assuming it has requisite authority), what "barriers" would it be preempting? An FCC filing by the Coalition for Local Internet Choice (CLIC), an advocate of municipal broadband networks, is a good place to start this analysis. The chart below reflects CLIC's latest filing with the Commission and groups individual states based on common limitations or restrictions (states with multiple limitations are reflected in the chart below).

Upon review, it is clear that many of the limitations or restrictions appear to be justified practices by state governments and should be excluded from any preemption discussion.  Beyond the extensive rhetoric and absent Congressional direction, nullifying state-enacted taxpayer protections to further a political goal sends the Commission down an extremely troubling path.

General Limitation States Applicable Comment
Requires a referendum by individual localities within a state seeking to offer broadband services.
  • Colorado
  • Louisiana
  • Minnesota
  • North Carolina
This doesn’t seem to be an unreasonable or unachievable burden. For instance, a number of Colorado localities successfully conducted the requisite referendums in November's election. Any added costs or time would be offset by the protections of local taxpayer funding and assurances of community support for such networks.
Requires public hearing(s). Wisconsin and Florida also require an evaluation of the costs and benefits.
  • Louisiana
  • Wisconsin
  • Florida
This doesn’t seem to be an unreasonable or unachievable burden. Many localities already conduct public hearings whenever taxpayer funding would be used to compete with private providers.
Prohibits localities above certain population from offering of "telecommunications service," as defined by federal law.
  • Nevada
Broadband is not treated currently as a telecommunications service by the FCC, so this isn’t a limitation.
Prohibits selling or leasing telecommunications services to the public or telecommunications facilities to other providers, with some exceptions, including the ability to provide "Internet-type services".
  • Missouri
Not clear that this would actually restrict municipal broadband.
Requires locality within a state to give the local private provider a right of first refusal, requires locality to solicit bids from private providers or prohibits if private provider is offering service. Florida merely requires consideration of whether there are other providers offering similar services.
  • California
  • Michigan
  • Pennsylvania
  • Montana
  • Florida
This seems to be a decision that the state governments have made to ensure private companies do not face unfair competition by government-sponsored municipal broadband offerings. It also appears consistent with FCC decisions not to provide USF funding in areas that are already served.
Requires a written business plan (Florida) or feasibility study (Utah and Louisiana).
  • Florida
  • Utah
  • Louisiana
This seems to be a decision that the state governments have made to ensure that projects will be sufficiently viable to meet bond obligations. It also appears similar to certain FCC requirements that ensure USF funding recipients are financially and technically qualified.
Prevents cross-subsidization and/or imposes other accounting, funding, or advertising limitations.
  • Alabama
  • Wisconsin
  • Virginia
  • North Carolina
  • South Carolina
  • Utah
  • Louisiana
These various limitations need to be examined in closer detail. Restrictions truly designed to prevent cross-subsidization are consistent with existing communications policy.
Adds extra taxes on municipal telecommunications services.
  • Florida
Any FCC authority to preempt restrictions on municipal broadband networks would unlikely extend to state tax policies, even discriminatory taxes.
Authority for a municipal government entity to provide broadband expires if a private entity steps forward.
  • California
This prohibition ensures that municipal broadband networks do not displace initiation of private sector broadband offerings.
Prohibits public utility districts from providing service directly to consumers.
  • Washington
This has been construed to restrict municipal broadband.
Limits which types of entities may provide municipal broadband service and/or where it is provided.
  • Nebraska
  • Tennessee
  • North Carolina
  • Arkansas
Arkansas also prohibits the provision of basic local exchange service by certain entities, but it is unclear whether that has limited the provision of broadband.
Prohibits provision of local exchange telephone service, basic local telecommunications service, or switched access service.
  • Texas
This has been construed to restrict municipal broadband.