Nebraska Muni Ban Overturned

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The Nebraska Supreme Court has invalidated a state law barring municipalities
from using their dark fiber for commercial broadband applications.

The state ban, passed in 2001, was pre-empted by federal policy, the court
ruled Jan. 10.

The ruling arose from an appeal by the Lincoln, Neb., electrical system.

In 2000, the municipal electrical utility announced that it would use part of
its 190-mile fiber-optic plant to carry digital traffic. When it sought a permit
from the state Public Service Commission, the state's telephone lobby, the
Nebraska Telecommunications Association, persuaded the PSC that the city didn't
have the authority to do broadband.

While that refusal was under appeal, the state legislature banned municipal
broadband operations -- the action that the state Supreme Court has declared
unconstitutional.

The Cable Act prevents laws barring entry into telecommunications by "any
entity." Various court challenges have attempted to define that phrase, and the
Nebraska court sided with the U.S. Court of Appeals for the Eighth Circuit,
which embraces the widest possible interpretation of the word 'entity.'

Ironically, the Supreme Court did not pave the way for the utility to act on
its broadband plans, stating that the city of Lincoln had not specifically
transferred its municipal powers to the utility to allow the power company to
move into nonutility businesses.

The city can rectify that flaw now that the statewide ban has been thrown
out.

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