Earlier this year, President Barack Obama called for an end to state laws that prevented cities from creating their own broadband networks.
“High speed broadband is not a luxury, it's a necessity,” Obama said in a speech delivered in Cedar Falls, Iowa -- a city that operates its own Gigabit fiber-optic network. “In some states, it is virtually impossible to create a community network like the one you have here in Cedar Falls. Today I'm saying, we're going to change that.”
The Federal Communications Commission took note. Several months later, the agency invalidated restrictions on muni-broadband in the states of North Carolina and Tennessee. The agency's order was specific to those two states, but observers say the FCC may issue similar orders that would apply to around 20 other states that curb muni-broadband.
Officials in North Carolina and Tennessee are now challenging the FCC's order in court.
"The Commission’s actions usurps fundamental aspects of state sovereignty concerning the core function of state regulation of its political subdivisions," North Carolina Attorney General Roy Cooper argues in papers filed recently with the 6th Circuit Court of Appeals. "North Carolina has absolute discretion over the structure and maintenance of the cities within its borders, and the powers and authorities of such cities may be enlarged, abridged, or withdrawn entirely by the General Assembly."
Likewise, Tennessee authorities argue that the FCC's regulations interfere with the state's right to issue its own regulations.
Lawmakers in both states restricted cities from creating muni-broadband networks only after some towns had already done so.
In North Carolina, lawmakers voted to restrict muni-broadband in 2011 -- several years after the city of Wilson became one of the first in the country to build its own fiberoptic network. At the time, Wilson spent $28 million to create Greenlight, a muni network that allowed consumers to obtain basic cable, Web access at 10 Mpbs and digital phone service, for $99.95 a month. Time Warner reportedly offered something similar -- although with slower broadband speeds -- for an introductory rate of $137.95 a month.
Time Warner quickly urged state legislators to impose crippling regulations that would prevent other cities from following Wilson's lead. In 2011, North Carolina's lawmakers obliged.
In Tennessee, Chattanooga's Electric Power Board decided in 2007 to move forward with a plan to build its own fiber-optic broadband network. Comcast unsuccessfully sued to prevent the buildout, alleging that the utility company was violating a state regulation by subsidizing the network with electric utility funds.
Chattanooga ultimately developed the first 1-GB broadband network in the country. Soon afterward, Tennessee lawmakers passed new restrictions that limit other cities' ability to create similar networks.
If the FCC's decision is upheld, other cities could move forward with badly needed broadband initiatives.
The Commerce Department recently reported that fewer than four in 10 (37%) of U.S. residents have a choice of two or more providers offering 25 Mbps connections -- the FCC's definition of broadband. The majority (53%) of rural Americans don't have any access to service at that speed, the FCC said in its most recent broadband report. What's more, around one in three residents of rural areas can't download material at speeds of at least 10 Mbps.
More muni-broadband networks could go a long way toward changing that.