by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor, John Locke Foundation
At issue is whether the Federal Communications Commission under the Obama administration acted properly by overturning state laws limiting municipal subsidies to city-owned broadband services. North Carolina’s lawsuit against the FCC is before the Sixth Circuit Court of Appeals.
The FCC ruling preempts North Carolina’s Level Playing Field law governing how municipalities — which under the N.C. Constitution are creations of the legislature — may provide broadband services to citizens. As I explained in my comment to the FCC:
The Level Playing Field law was instituted under the General Assembly’s constitutional authority over municipalities with sobering examples from Wilson, Salisbury, Morganton, and Mooresville and Davidson calling their attention to the need to prevent these kinds of problems. It was also, by dint of its provisions, aimed at protecting competition when future municipalities embark on such endeavors.
Among other provisions, it therefore requires future municipal broadband systems to comply with all federal, state, and local laws to which private providers are subject; prevents them from requiring subscribership from individuals or developments; limits their sources of revenue to those generated by the service, not from other services’ funds; forbids them from pricing services below cost; disallows municipalities from using non-voter-approved bonds to fund the service; and requires payments in lieu of taxes to counties and the state equivalent to what a private company so situated would be required to pay.
The Furchtgott-Roth and WLF brief argues that well-established state sovereignty principles absolutely prohibit the federal government from, as here, interfering with the relationship between a State and its political subdivisions. At the very least, it argues, FCC may not preempt state laws that set forth how various organs of government are to operate, in the absence of unmistakably clear language from Congress authorizing preemption. Federal law provides no such “clear statement,” Furchtgott-Roth and WLF demonstrate.
Upon filing the brief, WLF issued the following statement by Chief Counsel Richard Samp: “The Constitution protects the right of States to decide whether to engage in commercial activities. FCC overstepped its bounds when it snatched the reins of government from North Carolina and Tennessee and ordered them to permit their municipalities to offer expanded broadband Internet services. Congress is empowered to regulate people, not the several States.”