People in small communities may get better, cheaper access to the Internet after the Federal Communications Commission ruled Thursday that city-owned broadband services can expand into areas overlooked by commercial providers.
The decision quietly played out minutes before the FCC took up the higher-profile issue of Internet neutrality, which imposed the toughest rules yet on broadband providers like Comcast, Verizon and AT&T.
In the less prominent case, the cities of Wilson, N.C., and Chattanooga, Tenn., asked the FCC to override state laws that have prevented them from expanding their super-fast Internet networks. They were built when companies didn’t move into their city.
President Barack Obama pushed for the FCC’s decision, saying the state laws stifled competition and economic development. U.S. Sen. Thom Tillis of North Carolina and U.S. Rep. Marsha Blackburn of Tennessee, both Republicans, quickly introduced legislation to block the FCC move.
Local governments that offer broadband contend they were at risk of being left behind economically. More than 450 communities nationwide have municipal broadband offerings, according to the Institute for Local Self-Reliance.
In Colorado, a law passed in 2005 to keep local governments from building their own broadband networks. But it contains an escape hatch allowing a voters override. So far, voters in Boulder, Centennial, Cherry Hills Village, Longmont, Montrose, Red Cliff, Yuma and Wray and in Rio Blanco and Yuma counties have done so.
Those who want to limit municipal broadband say the laws protect taxpayers from government bureaucrats botching business decisions.
The vote was 3-2, with both Republican commissioners voting against it, arguing it was outside the commission’s authority, violated states’ rights and undermines private enterprise.
“It is not the government’s role to offer services instead of or in competition with private actors,” said Commissioner Michael O’Rielly.
The decision affects only the two cities in North Carolina and Tennessee but could set a precedent for others. Still, telecom analyst Paul Gallant of Guggenheim Securities said the city-owned providers aren’t big enough to upset the market, and will need separate FCC action for each case.
