Thursday, August 21, 2014

Commissioner's Staffer Makes Persuasive Case Against Muni Broadband Preemption

Matthew Berry’s August 20 remarks to the National Conference of State Legislators hit all the high points about the problems posed by the FCC attempting to preempt state restrictions on muni broadband networks.
Berry serves as Chief of Staff to FCC Commissioner Ajit Pai. In his remarks, Berry succinctly explained to the state legislators gathered at NCSL’s 2014 Legislative Summit why FCC lacks the power under Section 706 of the Communications Act to preempt state laws restricting or banning their local governments from going into the broadband Internet business. 
Stated Berry:
[T]he text of Section 706 doesn’t even mention preemption, let alone preemption of state laws that regulate municipalities. Instead, Section 706 embraces other means, like “price cap regulation” and “regulatory forbearance,” to accomplish its goals. And when it comes to the objectives set forth in Section 706(b)—removing barriers to infrastructure investment and promoting competition in the telecommunications market—the Tenth Circuit recently concluded that the provision gave the FCC authority to provide universal service support for broadband networks. In sum, Section 706 does not condone preemption of state laws either explicitly or implicitly, and so it hardly offers up the clear statement one would expect if Congress intended the FCC to “interpos[e] federal authority between a State and its municipal subdivisions.”
Berry also touched on the structural federalism principles that stand behind this legal conclusion about the limits of federal preemption of states’ control over their local governments:
Sovereignty does not rest with American cities, towns, or counties. Rather, the Supreme Court has stated that local subdivisions merely “are created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them in their absolute discretion.” In short, under our constitutional framework, states are free to grant or take away powers from municipalities as they see fit. So the basic concept is this: City governments are appendages of state government, but state governments most definitely are not appendages of the national government.
As Berry observes, NCSL has gone on record opposing preemption by the FCC. NCLS even stated it will pursue legal action against the FCC should it pursue preemption of state restrictions on muni broadband networks. Likewise, the American Legislative Exchange Council (ALEC), has voiced strong opposition to FCC preemption on policy, statutory, and constitutional grounds.

Free State Foundation scholars have been on top of this issue since Chairman Wheeler first announced his intention to preempt states that restrict muni broadband networks. I first set out the principal legal and constitutional defects in the Chairman’s proposal in my Perspectives from FSF Scholars Essay, “FCC Preemption of State Bans on Municipal Broadband Networks is Most Likely Unlawful.” More recently, FSF President Randolph May has written in The Hill why “The FCC Shouldn’t Go Down the Primrose (Preemption) Path.” Expect further analysis from FSF Scholars on Chairman Wheeler’s problematic preemption plans in the time ahead.