On April 19, Sen. Cory Booker introduced in the U.S. Senate a bill called the Community Broadband Act of 2023 – S.1197. A House version of the Act – H.R. 2552 – previously was introduced in the 118th Congress, and was on the agenda for an April 19 hearing held by the House Communications & Technology Subcommittee. The legislation, if passed by Congress, would amend Section 706 of the Telecommunications Act of 1996 to prohibit state laws, regulations or other legal requirements that would prohibit state or local governments from entering into the broadband Internet access services market as a competitor against private market providers.
A serious objection to government-owned broadband networks is the danger of local governments using their powers to favor their own networks above competing private market providers, including through permitting processes and setting fees. The Community Broadband Act appears to perceive this objection, but includes a provision that prohibits a local government from applying its laws and rules in a way that discriminates in favor of itself or of any provider that it owns.
However, even if that provision alleviates that serious objection to government-owned broadband networks, there is another serious objection, based on the U.S. Constitution. While it almost certainly is permissible for Congress to forbid state and local governments from discriminating in favor of government-owned networks and against private networks, the Community Broadband Act isn't merely a bill that would regulate interstate commerce. Indeed, the bill necessarily would impermissibly regulate states as states. Decisions about whether or not to enter the broadband market as a provider as well as decisions about where and under what conditions to provide service necessarily are decisions about state governance, and structural federalism principles forbid Congress from interfering with those decisions.
A February 2014 Perspectives from FSF Scholars, "FCC Preemption of State Bans on Municipal Broadband Networks is Most Likely Unlawful," and the Free State Foundation's August 2014 public comments filed with the FCC in its government-owned networks preemption proceeding make the case for why federal agency preemption of state law limits on government-owned network operations fails as a matter of constitutional law. Ultimately, the U.S. Court of Appeals for the Sixth Circuit vacated the Commission's preemption order in Tennessee v. FCC (2016). The same constitutional principles underlying that decision's interpretation of Section 706 also prohibit Congress from expressly preempting state law limits on whether, where, and under what conditions their local governments may enter into the broadband Internet access services business.
Aside from government favoritism and structural constitutional issues, there are other serious policy objections to government-owned networks. But here it is enough to say that constitutional problems with federal preemption of state laws limiting market entry by government-owned broadband networks cannot be cured by non-discrimination provisions. Congress should not pass the Community Broadband Act of 2023.
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