News: CJ Exclusives

Expert: Federal Appeals Court May Uphold N.C. Broadband Law

Lawsuit challenged FCC's authority to overturn state limits on municipal broadband service

A high-tech analyst suggests that a Federal Communications Commission rule pre-empting state laws limiting municipal broadband — including North Carolina’s — could be in trouble.

Berin Szoka, president of Tech Freedom, a Washington, D.C.-based nonpartisan technology think tank, said that while it’s difficult to predict the outcome of a lawsuit solely from the oral arguments made last month to a three-judge federal appellate panel, it appeared that at two of the three judges were considering rejecting the FCC’s rationale for adopting the rule.

North Carolina is one of roughly 20 states with laws regulating how cities and towns can get into the broadband business. Two cities, Wilson, N.C., and Chattanooga, Tenn., asked the FCC to pre-empt state laws and allow the municipal broadband operations to expand outside their geographical areas. Tennessee and North Carolina state officials appealed the FCC pre-emption in federal court, and the two cases were joined in a lawsuit before the 6th U.S. Circuit Court of Appeals.

Lawyers for the FCC argued that the agency has a mandate to promote the expansion of broadband services, so it can overrule the state laws in North Carolina and Tennessee. Attorneys for the states responded that a federal agency can’t overrule a state law unless it has the explicit authority of Congress to do so, and in this instance the FCC doesn’t have it.

Will Aycock, general manager of Wilson’s Greenlight broadband operation, did not respond to a request for a comment.

Last summer, Aycock told Carolina Journal that the city petitioned the FCC to pre-empt North Carolina law so it could provide broadband service outside Wilson’s city limits.

“Our primary goal with the petition was being able to expand out to all of our electric customers that wanted access to the network,” Aycock said. Roughly 5,000 of the city’s electricity customers live outside the corporate limits, some in adjacent counties, he said.

Szoka said that if the three-judge panel does rule that the FCC overstepped its bounds, the FCC could appeal either to the entire circuit court or directly to the U.S. Supreme Court.

“My sense is most of the time, parties will want to go straight to the Supreme Court,” Szoka said. However, with a vacancy created by Justice Antonin Scalia’s death leaving the nation’s highest court with four Republicans and four Democrats, a tie vote would mean that the lower court’s decision would prevail.

So instead of a direct appeal to the Supreme Court, the FCC might consider an “en banc” appeal to the full 6th Circuit, Szoka said.

President Obama has nominated federal Judge Merrick Garland to the Supreme Court. However, Republican Senate leader Mitch McConnell says he doesn’t plan to hold hearings on the nomination, adding that the next president should pick Scalia’s replacement.

“It might just buy them time to wait until the Supreme Court has a full deck,” Szoka said. “Garland might get confirmed and sit on the court by January at the earliest.”

Szoka noted that the 6th Circuit is heavily Republican, suggesting it’s less likely to favor the FCC’s position than a more Democratic-dominated circuit.

There’s another reason might want to appeal to the full 6th Circuit instead of going immediately to the Supreme Court, Szoka said. Going to the 6th Circuit would avoid potentially placing the U.S. solicitor general in an awkward position.

“Normally in that situation, the solicitor general of the United States is the one that files that petition [to the Supreme Court],” Szoka said. “It is by no means clear what the solicitor general would say.”

Matt Wood, policy director at Free Press, which supports increased government oversight of Internet service providers and “net neutrality,” said the organization hasn’t followed the legal case closely.

“We’re very supportive of giving localities and communities the ability to make those decisions themselves,” Wood said. “We support the federal government stepping in saying states shouldn’t be stepping in and taking away the choice from the local level.”