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Summary:

The cable industry has been lobbying state governments to pass laws that forbid cities from competing with them for broadband services. The FCC may use its legal authority to put a stop to that.

The cable industry and telcos regularly pour money into lobbying campaigns that aim to persuade state governments to thwart community broadband initiatives. The goal is to stop cities from creating fast local internet networks that might compete with their own.

On Tuesday, FCC Chairman Tom Wheeler published a blog post suggesting he might put a stop to such shenanigans by invoking the federal government’s preemption power, which prevents states from legislating in areas where the U.S. has clear authority.

Wheeler published the post after meeting with the mayor of Chattanooga, Tennessee, a city that has attracted a thriving high-tech scene, in no small part because of its fast local broadband services that led to the moniker “Gig City” — but whose accomplishment is being undercut by the cable industry’s lobbying campaign.

“Ironically, Chattanooga is both the poster child for the benefits of community broadband networks, and also a prime example of the efforts to restrict them,” wrote Wheeler in the statement.

Those efforts to restrict community broadband have been underway for years, and take the form of the cable industry and telcos leaning on lawmakers and throwing money into local election campaigns. In one egregious example, cable companies spent over half a million dollars in tiny Longmont, Colorado in a failed attempt to stop the community from issuing bonds to pay for a next-generation fiber optic network.

The cable industry is also whipping out its checkbook in places like Kansas City and Seattle to stifle other muni broadband initiatives. The lobbying amounts to an effort to buy state lawmakers, and to sandbag smaller cities with expensive lawsuits that will make others think twice about improving their broadband infrastructure.

In this context, Wheeler’s plan to invoke preemption appears to be a commonsense move to stop incumbents from using local politics to stop competition. He will have a fight on his hands, however, as Republicans have already seized on his earlier comments to suggest he is usurping states’ rights.

A letter last week signed by eleven Republican Senators, including Tea Party favorite Ted Cruz, warned that the FCC would be “well-advised to respect state sovereignty.”

At first glance, the argument seems ill-founded from both a legal and policy perspective. The federal government has clear authority to regulate the country’s communication infrastructure and, as cases like Chattanooga show, fast broadband appears essential for cities that want to attract new industries. But given the larger debate over broadband policy, including Comcast’s plan to acquire its biggest competitor Time Warner Cable, the politicization is hardly surprising.

 

  1. state sovereignty excuses always originate based on how the states are better able to handle the issues specific to their state and a federal blanket rule may have unintended consequences based on their environment.

    okay, that’s all fine and dandy, but in this context doesn’t that just transfer the role of the overbearing generalist to the state itself, imposing draconian efforts against its own cities and municipalities who would generally have a better understanding of what works better in their situation?

    it seems to me that “states rights” is just a political rallying cry here, and doesn’t actually fit the scenario at all, other than someone got their pockets lined and has to come up with some sort of argument to justify the money. bad argument or otherwise.

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    1. Thanks for the comment, Wong. That’s pretty well-stated. I’m sympathetic to letting states do what they like in many policy fields, since that allows for experimentation and permits regional polities to do what they want.

      But in this case, I think you nailed it — it’s incumbents relying on crony capitalism at the state level, rather than in DC, to protect their business. Special state legislature rules to protect cable and telco’s seems crazy here, especially given the overall state of US broadband.

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      1. Who do we want deciding how cities can tax their citizens, elected state legislators or an appointed bureaucrat in DC? Hmmm….that’s a hard call.

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    2. Steve Friedman Friday, June 13, 2014

      State sovereignty is the law. Where in the Constitution will one find the federal authority to dictate rules of commerce within the borders of a town – for network services or anything else?

      How about we choose – cronies in Washington, or cronies in your town/state. Which are YOU better able to affect and which can affect more control over more people? Which representative cares more about your personal concerns? How does a crony get the most bang for his buck?!

      There’s a reason why the founders setup a system that limited the federal authority to very few and specific things. There are a lot of resources out there that can help you understand why.

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  2. At any level of government should not the most important question be: what is best for the people? Top that off with the fact that the people have chosen (voted for) faster bandwidth and are willing to pay for it. Any attempt to block this is simply government favoritism to big business and it has got to stop.

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    1. Haven’t you heard? Telcos are people too, and they have a lot more money than the rest of us.

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  3. Don’t blame Republicans. I can see why they don’t want local govt to put private ISPs out of business. Do you want your porn stats delivered right to the mayor? LOL… BUT if local companies refuse to upgrade their network or refuse to wire some areas then I see no issue with the govt creating its own ISP for the people. I lived in one subdivision that only had crap 3mb ATT DSL not long ago while 1000 ft from me Verizon had 100mb FIOS when I called Verizon and after escalating the issue to a dozen people, they said that the original land developer signed a 50 year exclusive ATT wireline contract (i.e. took a bribe) and that contract is still binding prohibiting Verizon from pulling a wire there. This should be illegal. Basically I can NEVER have FIOS and ATT says FU, you are only getting DSL. I would love local govt to have bypassed this with community fiber.

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    1. Such a contract would be illegal. Somebody lied to you.

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  4. thomas.krafft Wednesday, June 11, 2014

    Every dollar spent on community, state and national projects returns 5x or 6x times that amount in commerce and revenue for private businesses. This is true for both physical and electronic infrastructure. By contrast, every dollar we’re forced to give to private companies is basically a dollar we’re forced to give to a private company.

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    1. Steve Friedman Friday, June 13, 2014

      where to begin…
      If that claim had a trace of truth to it, then we should have seen a massive expansion of the economy after the stimulus, and the USSR would be still exist and be massively wealthy. If that were at all true, private industry would expand x-fold with every expansion of the federal government! THAT’S NOT HAPPENING! Quite the opposite.

      Every project at any and all community/state/federal agencies?? Uhh…the record says no.

      And no one is ever forced to give anything to PRIVATE companies. By contrast, we (and future generations) are FORCED to give up current and future earnings to pay for the project they conceive, often with little input from us.

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  5. 11 republican senators—-The agents of change in a never ending Republican protection racket

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  6. Ted Cruz—A Canadian who knows what America needs and will give it to them no matter what America wants.

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  7. Lets find out who the obstructionists are that vote against the state this time and quickly kick their azz to the curb. I am done putting up with obstructionism!

    Wheres my GoogleFiber?

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    1. Steve Friedman Friday, June 13, 2014

      Yeah! Tyranny! We want tyranny! No obstruction with tyranny! More executive orders! Whoohoo!

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