The US Department of Justice has decided not to support the Federal Communications Commission in its legal fight against state laws that restrict municipal broadband projects.

The FCC voted in February—with public support from President Obama—to preempt state laws in North Carolina and Tennessee that prevent municipal broadband providers from expanding outside their territories. The states sued to preserve their laws, which protect private broadband providers from government competition.

But while Obama supported the FCC's decision, the Justice Department won't help defend it in court. In a very short filing, a DOJ attorney told a federal appeals court last week that "Respondent United States of America takes no position in these cases." (The North Carolina and Tennessee lawsuits were filed against the FCC and the United States of America—the FCC is continuing to defend its decision.)

By contrast, the DOJ is supporting the FCC's other controversial decision from February, which reclassified broadband providers as common carriers and formulated net neutrality rules. Internet service providers are suing to overturn that decision, and the FCC's briefs defending it have been filed jointly with the DOJ.

The net neutrality decision may rest on more solid legal ground. The FCC decided to reclassify broadband providers as common carriers in response to a previous court ruling that said the FCC's net neutrality rules could not be imposed without the reclassification.

The FCC's municipal broadband decision tests the limits of the commission's authority when it comes to intervening in local broadband markets. Section 706 of the Telecommunications Act of 1996 requires the FCC to evaluate whether broadband is being deployed to all Americans "in a reasonable and timely fashion." If the FCC determines that this is not happening, it must encourage deployment by using "measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment."

The ability to remove barriers is what FCC Chairman Tom Wheeler decided to use to preempt the state laws in North Carolina and Tennessee. But as opponents of the decision point out, Section 706 doesn't specifically authorize the FCC to preempt state laws.

The FCC declined comment when contacted by Ars today, but the commission defended its decision in a lengthy brief filed Thursday. "As Congress would have been aware in passing the 1996 statute, the agency had often preempted state laws that thwarted federal communications policy," the FCC wrote, among other things.

The DOJ's decision to stay out of the case was cheered by Randolph May, who was an FCC lawyer between 1978 and 1981. May opposes both the municipal broadband and net neutrality decisions and today runs a "free market-oriented think tank" called The Free State Foundation. He wrote that "the Department of Justice's curt statement advising the court that it takes no position in the appeal of the FCC's preemption of state laws restricting local government broadband networks is very curious. As someone who served as FCC Associate General Counsel, I can tell you this is a very rare occurrence."

The decision is "especially curious" because the FCC was following the wishes of President Obama, May wrote. "We don't know for sure, but my best guess is that the DOJ, quite rightly, is concerned about the lawfulness of the FCC's preemption action. If so, the concern is justified."

The outcome of the case could have far-reaching impacts. Municipal providers in North Carolina and Tennessee are waiting to find out if they can expand to surrounding communities. These cities built their own broadband networks because private ISPs hadn't invested adequately in their communities, while nearby cities and towns are still stuck with slower speeds and little competition.

If the court rules for the FCC, municipalities in other states could also petition the commission for preemption of similar laws. The White House said laws in up to 19 states could be targeted.