Netflix has called on US regulators to free up cities and local governments to build out their own high-speed internet services. The move is the latest in a series of challenges Netflix has made to policies being championed by the telecom and cable companies.



In a filing made public on Tuesday, Netflix told the Federal Communications Commission (FCC) that it should step in to block state laws in Tennessee and North Carolina that prevent cities from expanding their own services to compete with companies such as Comcast, Cox or Time Warner Cable.



Last week, USTelecom, the trade association backed by AT&T, Verizon and others, made its own submission to the FCC, saying the regulator did not have the authority to overturn state laws banning the expansion of two popular municipally owned high speed internet networks, one in Chattanooga, Tennessee, and the other in Wilson, North Carolina.

In its submission Netflix argued the expansion was a public good. “When municipalities harness that technology to extend new opportunities to new communities, federal and state laws should encourage that initiative, or at the very least, get out of the way,” it said.

“The important thing for the commission to keep in mind in this proceeding is this: neither the Tennessee nor the North Carolina law at issue moves the country any closer to a policy of bandwidth abundance,” Netflix wrote. “Both represent retrenchment and a move away from a pro-consumer policy of limitless bandwidth.”

In January this year the FCC issued the “Gigabit City Challenge”, calling on providers to offer internet at speeds as fast as 1 gigabit per second – about 50 times faster than the US average – in at least one community in each state by 2015.

Chattanooga and Wilson already offer high-speed internet services and have called on the regulator to overturn state laws, championed by cable and telecom lobbyists, that block them from expanding their service.

Opponents of the expansion argue not only that the FCC does not have the authority to overturn the bans but also that public-owned systems have a poor record of success,

In its filing with the FCC USTelecom pointed to financial difficulties and delays experienced by other publicly-owned networks including St Cloud, Florida, Groton City, Connecticut and the Utah Telecommunications Open Infrastructure Agency (Utopia).

“With state taxpayers on the financial hook when a municipal broadband network goes under, it is entirely reasonable for state legislatures to be cautious in limiting or even prohibiting that activity.”

The schemes in Chattanooga and Wilson appear to be a success and have sparked a tech boom in the Tennessee town that is attracting investment and national and international interest from other cities keen to follow its example.

Netflix’s objection is the latest in a series of challenges it has made to the cable and telecoms industry. Netflix is also opposing Comcast’s merger with Time Warner and pushing for the FCC to protect “net neutrality” – rules that would ban internet service providers from creating fast lanes (and therefore slow lanes) on the internet.