Why the End of the FCC’s Open Internet Rules Still Bodes Well for Municipal Broadband

Judges did away with the FCC’s “Open Internet” rules last week, but they also opened the door a crack to local Internet networks.

Prettyman Courthouse of the U.S. Court of Appeals for the District of Columbia Circuit. Credit: Wikimedia Commons

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The U.S. Court of Appeals for the D.C. Circuit decided last week that the Federal Communications Commission doesn’t have the authority to adopt rules promoting an “open Internet.” Many see the Verizon v. FCC ruling as a blow to what we’ll call the “net neutrality cause,” but Government Technology’s Brian Heaton tips us to an argument from some broadband advocates that the court may have inadvertently boosted the prospects for municipal broadband networks in the U.S.

First, a bit of background: The law providing nearly all the context for the open Internet debate is the 1996 Telecommunications Act. In Section 706 of that law, Congress called on the FCC to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.” While the Court of Appeals knocked the way that the FCC went about making its open Internet rules, it also drew attention to the powers indeed granted to the commission under 706.

Here’s Heaton:

Christopher Mitchell, director of the Telecommunications as Commons Initiative of the Institute for Local Self-Reliance, a nonprofit economic and community development consultancy that advocates for community broadband, called the development a “gift” from [Circuit Judge Laurence] Silberman.

“There’s been papers and law review journals before saying that the FCC could use its Section 706 power to overrule state barriers to local networks, but the FCC said that it didn’t think it had enough power, or it wasn’t clear enough,” Mitchell said. “We always thought that it had plenty of power, but they were too timid. Now we see at least one district court agrees with us.”

Broadband advocates are certainly engaging in bit of lemonade-from-lemons here. The court was fairly harsh with the FCC, though unsurprisingly so. The commission once treated the Internet as a “common carrier” service, and thus subject to a good deal of regulation. When we made the move over to broadband via cable and the like, the FCC opted to treat the Internet instead as a more lightly regulated “information service.” Rather than reclassifying service under the provisions covering common carriers, the Obama-era FCC claimed the authority to adopt its open Internet rules from the idea that it’s charged with increasing broadband deployment. Limiting Internet providers’ abilities to discriminate against certain types of traffic, therefore, would bolster the market for uses — think Google, Facebook, Netflix — and thus increase the demand for service itself.

The legal term for that is “a stretch.” Indeed, the FCC’s Open Internet rules were on shaky footing from the moment they passed.

Last week the court simply made things formal. “We must determine whether the requirements imposed by the Open Internet Order subject broadband providers to common carrier treatment,” reads the majority ruling by Judge David S. Tatel. “If they do, then given the manner in which the commission has chosen to classify broadband providers, the regulations cannot stand.” After a romp through the meaning of “common carrier” that touched on ferries and innkeepers, the court concluded that the way the FCC makes rules for the Internet falls outside its authority.

Still, the circuit court judges did open the door a crack to local broadband networks.

For years now, the ability of some local governments to build and run their own broadband has been contested. Big telecom companies don’t favor the notion, for obvious reasons. Advocates point to 19 states that have passed laws limiting municipal broadband. In other places, the challenges of running municipal broadband have proven too great. The successes or promising cases are well known because there aren’t too many of them: Google Fiber in Kansas City and elsewhere, and Chattanooga’s gigabit network. Just last week Seattle announced that its private-public partnership to bring a fiber network to that city fell apart because the company it contracted with had funding troubles.

Judge Laurence Silberman, referred to in Heaton’s piece, wrote the dissent in the Verizon v. FCC case. He agreed with the majority in the main, but drew special attention to parts of Section 706 that give the FCC authority to pursue “measures that promote competition in the local telecommunications market or other regulating methods that remove barriers to infrastructure investment.”

Silberman had little time for the FCC’s claim that part of the code allows it to pass Open Internet rules. But he allowed, contra Verizon, that 706 “is a grant of positive regulatory authority.” To distill a very wonky point, here you have a judge on a powerful court saying that the FCC has a right to indulge in “regulating methods that remove barriers to infrastructure investment.” One thing it could set about negating are rules that limit local government’s abilities to build their own broadband networks.

Read the court’s full decision, in fact, and the good news for municipal broadband fans goes beyond even how Heaton sets it up. In the majority opinion written by Tatel, the court rejected Verizon’s reading of the law that would limit the FCC’s authority in many circumstances to a “list of geographical areas that are not served by any provider of advanced telecommunications capability.” It was an argument that the court said was easy to swipe away “in relatively short order,” which is another mini-win for municipal broadband advocates. It sets down the belief that the FCC has the authority — nay, a congressional mandate — to promote broadband not only in places without broadband choices, but also in places where existing choices aren’t very good.

Now — and if you have stuck with the argument thus far, feel free to reward yourself with several viewings of this video of a repeatedly surprised kitten — just because the FCC could have the authority to champion municipal broadband doesn’t mean that it will. We’re only a few months into the tenure of new FCC chair Tom Wheeler, and his orientation on muni broadband isn’t yet known.

One hitch is the Community Broadband Act that has bumped around the Hill for years but hasn’t passed, which would give a skittish FCC the cover to say that Congress doesn’t think the commission already has the authority to knock down barriers to municipal broadband. But if Wheeler wanted to, he could come out and say that state laws banning municipal broadband networks constitute “barriers to infrastructure investment,” and that the commission will try to get rid of them.

That’s not enormously likely. The FCC hasn’t had that sort of activist orientation for many, many years now, if it ever did. Still, it’s slightly more likely today than it was before last week’s court decision.

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Nancy Scola is a Washington, DC-based journalist whose work tends to focus on the intersections of technology, politics, and public policy. Shortly after returning from Havana she started as a tech reporter at POLITICO.

Tags: infrastructurewashington dcshared citycivic techinternet accessgoogle fiber

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