Tennessee files suit against FCC for overturning law on muni broadband networks

Tennessee has become the first state to pose a legal challenge to the FCC's move to overturn a state law that puts a limit on how far a municipal-run service provider can grow its network.

On Friday, the state filed a petition with the Sixth Circuit Court of Appeals arguing that the regulator's move in February to preempt elements of state laws in North Carolina and Tennessee violates the tenets of the Constitution.

"[T]he FCC has unlawfully inserted itself between the State of Tennessee and the State's own political subdivisions," attorneys representing the state wrote in their filing.

In a 3-2 vote divided amongst party lines, the FCC voted during its February meeting to preempt elements of state laws in North Carolina and Tennessee that were designed to restrict municipal providers in these communities from providing broadband service outside of their current serving areas.

The FCC's move was driven by requests from Chattanooga, Tenn., and Wilson, N.C., two cities that had also asked the regulator overturn the anti-municipal broadband laws their states have on the books.

Chattanooga, Tenn.-based EPB gained notoriety in recent years for being one of the first service providers to offer a 1 Gbps fiber-to-the-premises (FTTP) service to residential and business customers. However, state laws ban it from extending services into new areas--even those that have no Internet access options from an incumbent telco or local cable operator.

A similar situation exists in Wilson, N.C. A North Carolina law that was passed in 2011 has prevented Wilson from expanding its FTTP service even into areas where incumbent providers deliver service at speeds as slow as 768 kbps.

While Wilson, N.C., and Chattanooga, Tenn. are the first cities to ask the FCC to overturn state laws limiting the growth of municipal broadband networks, it's likely their decision will influence others to seek similar relief. 

Interestingly, Tennessee's lawsuit was filed right before USTelecom, a trade association that represents large telcos like AT&T (NYSE: T) and Verizon, filed a suit against the FCC over its new net neutrality rules.

For more:
- The Hill has this article

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