President Obama spoke in Cedar Falls, Iowa, in January about the need to improve America’s access to high-speed Internet. He didn’t choose this location by accident: Cedar Falls, home to the University of Northern Iowa, is one of a growing number of American communities that built its own gigabit fiber network. One reason Cedar Falls was able to build this network is that, while 19 states have laws that make it difficult or even illegal to build municipal networks, Iowa isn’t one of them.
As part of his plan, the president wants to use the FCC to strike down these state laws, giving more freedom to municipalities. Naturally, many state governments that have passed these laws won’t be happy. In general, these states passed these laws not because they themselves want to control Internet access; they’d prefer government stay out of the network-building business altogether, and leave it to the private sector.
Thus, the president’s proposal pits the cities and federal government against the states. As the debate unfolds, how will each side argue its case?
Even the FCC isn’t sure they have the power to overturn these state laws. Commission Chairman Tom Wheeler believes it does, while FCC Commissioner Ajit Pai said, “US Supreme Court precedent makes clear that the commission has no authority to pre-empt state restrictions on municipal broadband projects.”
Preemption refers to the Supremacy Clause in Article VI of the Constitution, which makes that document the supreme law of the land. The idea behind preemption is that there’s not much point to preventing the federal government from quartering troops in your house if the states can. And just as federal laws preempt state laws, state laws preempt municipal laws.
The big “but” regarding federal preemption is the Tenth Amendment to the Constitution, which says powers not granted to the federal government are reserved to the states. The states with laws against municipal networks are likely to argue that it’s the 10th Amendment that gives them the power to enact these laws.
The Commerce Clause
Article One, Section 8, Clause 3 of the Constitution is commonly called the “Commerce Clause” because it grants the federal government the right to regulate interstate commerce. The Communications Act of 1934 established the FCC to oversee interstate radio, phone, and later TV broadcasts. The Telecommunications act of 1996 added the Internet to the FCC’s purview. So there’s no question that the federal government has the right to oversee and regulate the Internet as it relates to interstate commerce.
President Obama has urged the FCC to treat the Internet as any other utility it has the power to regulate, and it looks as if the commission may do just that. Chattanooga’s Electric Power Board, creator of that city’s municipal gigabit network, and the city of Wilson, NC, have already petitioned the FCC to strike down state laws prohibiting municipal networks. If the FCC does so, there’s a chance those states will attempt to defend their laws by suing the FCC.
It’s All About Interpretation
The states that argue against federal preemption will claim that while the FCC does have the power to regulate the Internet, it doesn’t have the power to regulate this particular issue. Even states without laws against municipal networks may side with states that do, filing “friend of the court” briefs that support the general concept of preserving states’ rights.
A big part of the debate will be whether creation of a municipal network is interstate or intrastate commerce. At first glance, it might sound like intrastate, but because constitutional law is complicated, commerce that takes place purely within one state may still be considered interstate commerce if it affects overall supply and demand of the interstate market. In other words, if you buy your Internet plan from a municipal provider, you won’t buy it from a corporation operating across state lines.
Which Side Will Win?
Predicting the future is a lot harder than looking at past precedent. What’s your guess? Based on the law, should states have the right to prevent municipal governments from competing with the private sector, or should those municipalities be able to provide Internet access the same way they provide access to existing public utilities?
Whether or not your city builds its own network, you still have a choice when it comes to finding the connection plan that suits you best. So while the cities, states, and federal government fight it out, take matters into your own hands and see what’s available to you.Or view all providers
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