Federal Communications Commission Chairman Tom Wheeler is going to have a fight on his hands if he tries to preempt state laws that limit the growth of municipal broadband networks.

Matthew Berry, chief of staff to Republican Commissioner Ajit Pai, argued today that the FCC has no authority to invalidate state laws governing local broadband networks. In a speech in front of the National Conference of State Legislatures, Berry endorsed states' rights when it comes to either banning municipal broadband networks or preventing their growth. He also argued that the current commission, with its Democratic majority, should not do something that future Republican-led commissions might disagree with.

"If the history of American politics teaches us anything, it is that one political party will not remain in power for perpetuity. At some point, to quote Sam Cooke, 'a change is gonna come,'" Berry said. "And that change could come a little more than two years from now. So those who are potential supporters of the current FCC interpreting Section 706 [of the Telecommunications Act] to give the Commission the authority to preempt state laws about municipal broadband should think long and hard about what a future FCC might do with that power."

Arguing that municipal broadband networks could discourage investment by private companies, Berry said, "It’s not hard, then, to imagine a future FCC concluding that taxpayer-funded, municipal broadband projects themselves are barriers to infrastructure investment. So if the current FCC were successful in preempting state and local laws under Section 706, what would stop a future FCC from using Section 706 to forbid states and localities from constructing any future broadband projects? Nothing that I can see."

Twenty states place at least some limits on the ability of cities and towns to offer Internet service to residents through laws passed as favors to cable companies and other ISPs. Wheeler argues that because Section 706 gives the FCC authority to promote competition in local telecommunications markets by removing barriers to investment, the commission can preempt laws that prevent cities and towns from creating their own broadband networks that compete against private companies. The Electric Power Board of Chattanooga, Tennessee, and the city of Wilson, North Carolina, which both say local laws prevent them from expanding Internet service to surrounding areas, have filed petitions asking the commission to do just that.

Berry, who previously served as the FCC's general counsel, argued that states are within their rights to restrict municipal broadband and that the federal government cannot interfere unless given a more specific mandate to do so by Congress.

"Section 706 does not condone preemption of state laws either explicitly or implicitly, and so it hardly offers up the clear statement one would expect if Congress intended the FCC to 'interpos[e] federal authority between a State and its municipal subdivisions,'" a copy of his speech said.

"Sovereignty does not rest with American cities, towns, or counties," Berry also said. "Rather, the Supreme Court has stated that local subdivisions merely 'are created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them in their absolute discretion.' In short, under our constitutional framework, states are free to grant or take away powers from municipalities as they see fit. So the basic concept is this: city governments are appendages of state government, but state governments most definitely are not appendages of the national government."

Berry cited a 2004 case in which Missouri municipalities unsuccessfully challenged a state law preventing them from providing telecommunications services. In that case, the Supreme Court upheld an FCC decision that went against the municipalities. But Wheeler has legal ammunition, too. The federal appeals court ruling that overturned the FCC's net neutrality rules earlier this year included an opinion by Judge Laurence Silberman that the FCC can use its Section 706 authority to remove "state laws that prohibit municipalities from creating their own broadband infrastructure to compete against private companies." Wheeler's staff argues that the Missouri case isn't directly relevant because in that instance the FCC declined to support the municipalities. If the commission supported municipalities in the current cases, courts could rule differently, the thinking goes.

No vote has been scheduled yet, but Wheeler reiterated his support for municipal broadband last week. In a letter to US Rep. Mike Doyle (D-PA), Wheeler wrote that "many states have enacted laws that place a range of restrictions on communities' ability to invest in their own future. There is reason to believe that these laws have the effect of limiting competition in those areas, contrary to almost two decades of bipartisan federal communications policy that is focused on encouraging competition."

The FCC will take action "only after a full opportunity for comment by all interested parties in an open proceeding and a careful analysis of the specific factual, policy, and legal issues involved," Wheeler wrote. "I respect the important role of state governments in our federal system, but I know that state laws that directly conflict with critical federal laws and policy may be subject to preemption in appropriate circumstances. I recognize that federal preemption is not a step to be taken lightly without a careful consideration of all relevant legal and policy issues."