FCC’s Other ’Net-Regulation Defense

Insists Section 706 empowers it to pre-empt state broadband laws
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WASHINGTON — The Federal Communications Commission is affirmatively defending its power to regulate the Internet on two fronts.

The most high-profile maneuver was last week’s court defense of its Open Internet order in the U.S. Court of Appeals for the D.C. Circuit. But the FCC is also talking up its regulatory powers in a brief defending its municipal broadband pre-emption decision.

In a brief to the 6th U.S. Circuit Court of Appeals, the agency defended its decision to preempt state laws limiting cities from building out broadband.

Led by general counsel Jonathan Sallet, the FCC legal team told the court that the its mandate under Section 706 of the Telecommunications Act of 1996 to ensure advanced telecom is deployed in a reasonable and timely manner to all Americans justified the pre-emption of state laws limiting broadband deployment.

If the FCC’s pre-emption is not overturned by the courts, commercial Internet-service providers could face municipal overbuilds with an FCC protecting cities from state laws attempting to block or limit such activity.

The FCC has used the same Section 706 mandate to justify its Open Internet rules, though it also added the backstop of reclassifying broadband Internet access as a telecommunications service under the Communications Act of 1934. The agency noted that the D.C. Circuit, in which it is arguing for network-neutrality rules, has said Section 706 is an affirmative grant of authority.

The 1996 Telecom Act rewrite, which created Section 706, told the FCC to study the state of broadband deployment and, if it was found to not be reasonable and timely, empowered it to apply various regulatory levers.

For years, under Republican FCC chairmen, deployment was found to be reasonable and timely. But under the Democrats in 2010, that changed, based essentially on the fact that not everyone in the U.S. had broadband, so the levers could be triggered.

The FCC has said pre-empting municipal broadband laws, which chairman Tom Wheeler brands as an anti-competitive effort by incumbent ISPs, is acceptable and even required under Section 706, if the agency finds broadband deployment inadequate. That has been the blanket finding of recent reports.

ISPs have argued that gives the FCC something of a blank check to regulate.

“Only the FCC would imagine that its Section 706 authority could supersede the 10th Amendment of the U.S. Constitution, and relegate a sovereign State of the United States to a mere barrier to broadband deployment,” said Scott Cleland, chairman of NetCompetition, an e-forum on broadband competition supported by ISPs.

The FCC said it can only pre-empt laws attempting to affect communications policy by limiting expansion of already approved broadband buildouts, but not state laws prohibiting buildouts altogether.

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