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Document State of Tennessee v. FCC View

A U.S. appeals has court struck down the FCC's 2015 order that would have allowed EPB to expand its broadband offerings beyond its traditional service area.

The ruling likely means that EPB won't be able to expand beyond the legal boundaries that define its electric service area unless allowed by Tennessee's legislature.

However, an effort by Tennessee Rep. Kevin Brooks to allow a "demonstration project" of municipal broadband expansion in the Volunteer State was scuttled in March, when it was killed by a the House Business and Utilities Subcommittee on a 5-3 vote.

* In its decision, the court wrote:

"The FCC order essentially serves to re-allocate decision-making power between the states and their municipalities. This is shown by the fact that no federal statute or FCC regulation requires the municipalities to expand or otherwise to act in contravention of the preempted state statutory provisions. This preemption by the FCC of the allocation of power between a state and its subdivisions requires at least a clear statement in the authorizing federal legislation. The FCC relies upon § 706 of the Telecommunications Act of 1996 for the authority to preempt in this case, but that statute falls far short of such a clear statement. The preemption order must accordingly be reversed."

* Tom Wheeler, chairman of the FCC, bemoaned the court's decision:

"While we continue to review the decision, it appears to halt the promise of jobs, investment and opportunity that community broadband has provided in Tennessee and North Carolina. In the end, I believe the Commission's decision to champion municipal efforts highlighted the benefits of competition and the need of communities to take their broadband futures in their own hands."

* Berin Szoka, a spokesman for a group called TechFreedom, cheered the ruling:

"It took enormous chutzpah for the FCC to try to preempt state broadband laws, so this is a well-deserved rebuke for an agency run amuck ... This was federalism 101: the FCC was unconstitutionally interfering with the division of power between state legislatures and municipalities without a 'clear statement' from Congress authorizing it to do so."

* David Wade, President of EPB, said the utility would keep working within the state to change the rules that restrict it from expanding:

"Ultimately, Tennessee's broadband gap is a problem for Tennesseans, and we need a Tennessee solution," said David Wade, president of EPB. "We will continue to work with the growing number of state legislators and grassroots citizens interested in removing the barriers that prevent EPB and other municipal providers from serving our neighbors in surrounding areas who have little or no access to broadband. We are further encouraged by Commissioner Randy Boyd's interest in addressing the lack of broadband in rural areas. As the head of the Tennessee Department of Economic and Community Development, he is especially well positioned to join with state lawmakers in addressing this challenge on behalf of Tennesseans."

This story is developing and will be updated.

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