Tennessee says FCC can't preempt state laws governing municipal broadband services

Tennessee is not giving up on its anti-municipal broadband stance, saying in a lawsuit that the FCC can't overturn laws that limit municipal broadband growth in its state.

This is the first lawsuit the FCC has faced since passing rules in February 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.

Attorneys representing Tennessee said in a brief filed Friday in a federal appeals court that states have an "inviolable right to self-governance," meaning that a state can carry out powers to its cities and towns how it wants.

"Far from being a simple matter of preemption, as the FCC claims, this intervention between the State and its subordinate entities is a manifest infringement on State sovereignty," Tennessee's lawyers said in the suit, according to an ars technica report.

Tennessee law allows municipal electric systems like Chattanooga's EPB to provide telecommunications services anywhere in the state, but limits provision of Internet and cable services to the electrical system footprint. EPB, which was a pioneer in the 1 Gbps FTTH market segment, said the current laws prohibit it from bringing its service to other communities -- even those that have no Internet access.

This latest challenge supports a previous lawsuit Tennessee filed against the FCC in March, following the regulator's passing an order that will let communities choose whether or not to build their own networks based on their own missions and their ability to expand services to nearby communities.

When it passed its ruling on a 3-2 vote along party lines in February, the FCC cited its authority as Section 706 of the 1996 Telecom Act. Under Section 706, the FCC is required to encourage the deployment of broadband to all Americans by using "measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment." 

Joining FCC commissioners Ajit Pai and Michael O'Rielly, Tennessee said that Section 706 doesn't specifically grant the FCC authority to preempt state laws.

"The FCC can point to nothing in the statute's language that meets the Supreme Court's 'plain statement' requirement for allowable intrusions into areas of state sovereignty," Tennessee said.

The FCC has until Nov. 5 to file a response to Tennessee's suit.

For more:
- ars technica has this article

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