Assessing the FCC’s loss in the municipal broadband case

[Commentary] Much of the Federal Communications Commission municipal broadband order focused on the benefits of municipal broadband as a policy matter. The agency stressed the value of facilities-based competition and the effects of municipal entry on prices and service levels of incumbent private broadband providers. But legally, this was little more than smoke and mirrors. The key question before the court was not whether municipal broadband was good policy. Rather, the key question was who should decide whether municipal broadband is good policy and what restrictions, if any, should be placed upon municipal broadband providers. More specifically, the case represented a classic power struggle between the FCC and the states. Can a federal agency in Washington tell the sovereign states what they can and cannot do with regard to the cities they operate?

Unfortunately for the FCC, the contours of its authority to preempt state law were settled long ago. The broader lesson to be learned is that agencies should pay more than mere lip service to the legal restrictions on their authority. It is not enough to be right on policy; there are (and should be) limits on the ability of agencies to finesse the law to achieve narrow policy objectives. These legal restrictions often indicate broader, more fundamental principles at stake than the outcome of a particular policy dispute — in this case, state sovereignty. It seems an important lesson to remember as the telecommunications community struggles with the effects of reclassifying broadband as a public utility in order to secure a per se ban on paid prioritization.

[Lyons is an associate professor at Boston College Law School]