The FCC has found that it has the authority to remove aspects of Tennessee and North Carolina law that limit local authority to build or expand Internet networks. In short, states seem to retain the authority to restrict municipalities from offering service at all. However, if states allow local governments to offer services, then the FCC has the power to determine whether any limitations on how they do it are a barrier to the deployment of advanced telecommunications services per its authority in section 706 of the Telecommunications Act.

The FCC has removed a restriction in Tennessee law that prevented municipalities with fiber networks from expanding to serve their neighbors, per a petition from Chattanooga.

In North Carolina, the FCC has removed multiple aspects of a 2011 law, HB 129, that effectively outlawed municipal networks by presenting local governments with a thicket of red tape, including territorial restrictions on existing networks. The city of Wilson had petitioned the FCC for this intervention. 

Listen to our podcast with Jim Baller about this decision.

See the Institute for Local Self-Reliance Press Release on the Opinion and Order for more. If you don't want to read the full order, we pulled out some key paragraphs and sorted them for your benefit!

Key Paragraphs in the FCC Decision

We selected some of the most important passages with references to the original Memorandum Opinion and Order. Look for these passages as you read the original FCC doc [PDF].

Communities Around Chattanooga and Wilson Need Better Connectivity:

43. Numerous commenters favor preemption because they wish to obtain service from EPB or Wilson but are unable to do so, and the maps and data discussed above illustrate that communities surrounding EPB’s and Wilson’s current areas of broadband service have far fewer choices for advanced telecommunications capability than the national average. This suggests that further expansion could generate improved levels of investment and competition in these locations. (pp 23-24)

As the time approached for FCC Commissioners to choose to allow Wilson and Chattanooga to serve surrounding communities, leaders from municipalities with publicly owned networks shared their experiences. Jill Boudreau, Mayor of Mount Vernon, Washington, published her community's experience with their muni in GoSkagit.com. 

As in the recent testimonial from Opelika Mayor Gary Fuller, Mayor Boudreau described how Mount Vernon's network has created a quality of life where high-tech has enhanced local medicine, encouraged new businesses, and created and environment rich with competition.

Mount Vernon's open access network provides infrastructure for nine service providers. Some of these providers offer services only to businesses, while others also serve government, retail providers, and specific industries such as the medical community. Hundreds of public and private customers receive fast, affordable, reliable connectivity through these providers and the city's publicly owned network.

We first introduced you to Mount Vernon in 2013. The community began deployment in 1995 and have added incrementally to the network to serve nearby Burlington and the Port of Skagit. Government facilities, schools, hospitals, and businesses save millions while utilizing top-notch technology. Businesses have relocated to the area to take advantage of the network and enjoy the high quality of life in the relatively affordable area with its abundance of outdoor recreation.

Mayor Boudreau recognizes that Mount Vernon's success may not be easy to come by for every community but believes each should have the ability to decide that for themselves. She writes:

As the FCC works to update current policy to encourage ubiquitous Internet access and adoption, community networks are also taking an active role. Earlier this month, customers of iTV-3 received a boost in speed with no increase in price. iTV-3, a community minded local provider, chose to make the change in order to ensure all its customers were well within the new broadband speeds as redefined by the FCC in January 2015.

Early last year, UC2B and iTV-3 announced their new partnership. The company, which has provided services to residents and businesses to Illinois communities since 2009, is leasing UC2B infrastructure and equipment and will own any infrastructure it builds as part of expansion. 

iTV-3 increased customers' speeds by 10 Mbps, according to a press release on the change:

20/20 Mbps increased to 30/30 Mbps

40/40 Mbps increased to 50/50 Mbps

50/50 Mbps increased to 60/60 Mbps 

“We are increasing the speed tier of all existing Champaign and Urbana iTV-3 customers by 10 Mbps at no additional charge to ensure that every user will exceed the new FCC definition of broadband speed,” said Dinkla. “New areas will be constructed beginning this Spring, bringing gigabit Internet speeds to businesses and neighborhoods throughout the community.  iTV-3 gigabit Internet is yet another reason for people to be excited to live, work, and do business in Champaign and Urbana.”

The Tennessee Farm Bureau Association recently put its support behind state legislation from Senator Janice Bowling and Rep. Kevin Brooks reports the Times Free Press. 

The Bureau told the Times Free Press:

"Our members are hungry to have broadband," said Rhedonna Rose, executive vice president of the 600,000-member Tennessee Farm Bureau Federation. "We represent a lot of Tennesseans in very rural areas of the state who are frustrated that they don't have high-speed Internet."

SB 1134 and its companion HB 1303 are brief and direct, allowing municipal power distributors the right to extend Internet access beyond current geographic boundaries established by state barriers. Bradley County, one of EPB's neighbors, would like to have EPB expand service to them but state laws, backed by large corporate incumbents not interested in serving Bradley, forbid expansion.

According to a Chattanoogan article, EPB and Bradley County are planning for the expansion which will serve about 1,000 people; about 800 of those people rely on dial-up for Internet access. From the Chattanoogan article:

“We have people who live within half a mile of our service territory … who have nothing but dial-up, and that doesn’t make any sense” [EPB CEO Harold] DePriest said. “In a lot of cases we can get to those areas fairly easily.”

The recent FCC decision changed the landscape in Tennessee and North Carolina for now but policy advocates, telecommunications attorneys, and community leaders are braced for legal challenges. In a Times Free Press article from last week, Tennessee Republican Governor Bill Haslam stated that his office would consider appealing the FCC decision. 

In light of the recent FCC decision to restore some local telecommunications authority in Tennessee and North Carolina, it is time to examine the details. Join leading telecom attorneys Jim Baller and Marty Stern as they host a live BroadbandUS.TV webcast on March 13th to discuss Title II, network neutrality, and new possibilities for munis.

The event begins at 1 p.m. ET and is titled FCC Takes Charge - Net Neutrality and Muni Broadband: New Title II Rules for Broadband Access and Preempting State Limits on Municipal Networks. Registration is available at the BroadbandUS.TV website. More info about the event:

In this special edition of Broadband US TV we examine two historic decisions from the FCC: The decision to classify broadband access as a Title II service, and the preemption of state laws in North Carolina and Tennessee that placed limits on municipal broadband networks.  We’ll dive into these issues with two panels of prominent players and experts on both sides of these white hot issues.  Hear details about the rulings, predictions on implementation and court challenges, and what these rulings are likely to portend for broadband in America over the next year and beyond.  On the muni broadband panel, our own Jim Baller, lead counsel to Chattanooga and Wilson before the FCC, will go from host to panelist and mix it up with our other guests.  We’ll be sure not to cut him any slack.

Guests will be:

Title II and Broadband  -- Pipedream or New Reality                                     

• Craig Aaron, President, Free Press 
• Chris Lewis, VP, Government Affairs, Public Knowledge
• Sarah Morris, Senior Policy Counsel, New America Foundation, Open Technology Initiative 
• Hank Hultquist, VP, Federal Regulatory, AT&T
• Barbara Esbin, Outside Counsel, American Cable Association
• Jonathan Banks, Senior VP, Law and Policy, US Telecom Association 

Stacy Mitchell, Co-Director of ILSR and Director of the Community-Scaled Economy Initiative, took a few moments to look back over the work of David Carr. Carr's work included investigating monopolies in the telecommunications space. Stacy's story, re-posted here, originally ran on ILSR.org.

What will we do without David Carr, the brilliant media columnist at the New York Times who died last week? At ILSR, we will especially miss his writing on monopoly power, Amazon, and the book business. Below we’ve excerpted and linked to a few of his best recent pieces on those subjects.

In Modern Media Realm, Big Mergers Are a Bulwark Against Rivals — July 16, 2014

Comcast’s bold strategy of acquisition kicked off a wave of defensive consolidation, fueled by a combination of fear and abundant capital in the media realm.

I talked to the head of one company that creates television and movies, who expressed a common sentiment. “When Comcast decided to get bigger,” he said, “we all had to ask ourselves, Are we big enough? We all have to think about getting bigger.”

And why not? No one is stopping them.

With big data, a Big Brother government and now big media, size creates its own prerogatives. When Amazon used its market dominance to limit access to Hachette books over a price dispute, regulators yawned. When AT&T and DirecTV propose a tie-up in response to Comcast, the market issues are just another deal point. Cable companies slowed down content from clients (which are also competitors) like Netflix, and it was treated as a business dispute.

For the most part, the current government has passed on regulating potential monopolies, and as citizens, we have become inured to the consequences of bigness.

When the FCC announced its intention last week to neutralize the negative impacts of Tennessee and North Carolina anti-muni laws, celebrating reached far beyond Chattanooga and Wilson. In Lafayette, home to LUS Fiber, City-Parish President Joey Durel took time to write a supportive letter to Wilson's Mayor Bruce Rose.

We reproduce the text of that letter below. As Durel points out, the two communities have strong similarities and the victory in Wilson has also reached Lafayette. Durel notes that a community's decision to better its connectivity should always be a local choice, that partisanship is not a natural part of the equation, and he encouraged Rose to "stay strong."

Dear Mayor Rose:

As Mayor of Lafayette, LA, a city that proudly provides electric and communications services to our businesses and residents, I want to congratulate you, your colleagues, and your constituents on your achievement in delivering world-class Internet services to the residents and businesses of Wilson - and on the strong endorsement you received last week from the Federal Communications Commission.

As in Wilson, the Lafayette community has been united in our support for high-capacity broadband connectivity to the Internet as an essential tool of economic development and as a means of securing our community's economic future. While some will use any means possible to distract you from achieving your goals for your community, our deeply conservative electorate has consistently supported our electric utility's great achievement in building a future-proof broadband Internet infrastructure, and this support has been consistently bi-partisan. My Democrat colleagues have joined me and my fellow Republicans in insisting that we in Lafayette should have the right to choose our broadband Internet future. We here in Lafayette will determine how our community engages this essential economic development tool, and we will not have our economic future dictated to us by others.

Last week, the FCC made history when it chose to restore local telecommunications authority by nullifying state barriers in Tennessee and North Carolina. Waiting in the wings were Rep. Marsha Blackburn and Senator Thom Tillis from Tennessee and North Carolina respectively, with their legislation to cut off the FCC at the knees. [A PDF of the draft legislation is available online.]

Readers will remember Blackburn from last year. She introduced a similar measure in the form of an amendment to an appropriations bill. Blackburn has repeatedly attributed her attempts to block local authority to her mission to preserve the rights of states. A Broadcasting and Cable article quoted her:

“The FCC’s decision to grant the petitions of Chattanooga, Tennessee and Wilson, North Carolina is a troubling power grab,” Blackburn said. “States are sovereign entities that have Constitutional rights, which should be respected rather than trampled upon. They know best how to manage their limited taxpayer dollars and financial ventures."

Thom Tillis, the other half of this Dystopian Duo, released a statement just hours after the FCC decision:

“Representative Blackburn and I recognize the need for Congress to step in and take action to keep unelected bureaucrats from acting contrary to the expressed will of the American people through their state legislatures.”

For Immediate Release: February 26, 2015

Contact: Christina DiPasquale, 202.716.1953, Christina@fitzgibbonmedia.com

BREAKING: Cable Companies Lose Big at FCC, Barriers to Community Broadband Struck Down

Two southern cities today persuaded the Federal Communications Commission to recognize their right to build their own publicly owned Internet networks where existing providers had refused to invest in modern connections. The 3-2 FCC vote removes barriers for municipal networks in Chattanooga, Tennessee and Wilson, North Carolina, to extend their high-quality Internet service to nearby areas.  

Said Christopher Mitchell, Director of Community Broadband Networks at the Institute for Local Self-Reliance:

“Cable companies lost their bet that millions spent on lobbying to stifle competition was a wiser investment than extending high-quality Internet to our nation’s entrepreneurs, students and rural families. 

“Preventing big Internet Service Providers from unfairly discriminating against content online is a victory, but allowing communities to be the owners and stewards of their own broadband networks is a watershed moment that will serve as a check against the worst abuses of the cable monopoly for decades to come.”

The FCC decision sets an historic precedent for towns working to offer municipal broadband networks in twenty states that have enacted limits or bans on local governments building, owning, or even partnering to give local businesses and residents a choice in high speed Internet access. Three-quarters of Americans currently have either no broadband or no choice of their Internet provider.