North Carolina has sued the Federal Communications Commission so it can continue enforcing a state law that prevents municipal broadband networks from expanding.

Three months ago, the FCC preempted such laws in both North Carolina and Tennessee. Tennessee filed a lawsuit to save its municipal broadband restrictions in March, and North Carolina has now done the same in a petition filed last week to the US Court of Appeals for the Fourth Circuit.

"Despite recognition that the State of North Carolina creates and retains control over municipal governments, the FCC unlawfully inserted itself between the State and the State’s political subdivisions," North Carolina Attorney General Roy Cooper wrote to the court. Cooper claimed the FCC's action violates the US Constitution; exceeds the commission's authority; "is arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act; and is otherwise contrary to law."

The FCC's North Carolina decision came in response to a petition filed by the City of Wilson, which provides electric service in six counties in eastern North Carolina and broadband service in Wilson County, but is unable to expand its broadband network due to the state law. Wilson's network is "an island of competition surrounded by a sea of little to no options for world-class competitive broadband services," an FCC official said when the commission decided to preempt the state law.

Will Aycock, operations manager of the Wilson municipal broadband system, told WRAL TechWire that "[w]e are aware of the suit," and that "we knew that this would be an ongoing process."

The FCC claims authority to preempt state laws that restrict municipal broadband from Section 706 of the Telecommunications Act of 1996, which requires the FCC to encourage the deployment of broadband to all Americans by using "measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment."

About 20 states have laws that protect private Internet service providers from local competition, so court decisions in favor of the FCC could have consequences beyond North Carolina and Tennessee.

“We are confident that our decision to pre-empt laws in two states that prevented community broadband providers from meeting the needs and demands of local consumers will withstand judicial scrutiny," an FCC official told Ars after the Tennessee lawsuit.

Wilson created its broadband network in 2008, three years before North Carolina issued its restrictions.

"North Carolina imposes numerous requirements that collectively have the practical effect of prohibiting public communications initiatives," wrote attorney James Baller, who has been fighting attempts to restrict municipal broadband for years. "For example, public entities must comply with unspecified legal requirements, impute phantom costs into their rates, conduct a referendum before providing service, forego popular financing mechanisms, refrain from using typical industry pricing mechanisms, and make their commercially sensitive information available to their incumbent competitors. Some, but not, all existing public providers are partially grandfathered."