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Business and Economy Featured Liberty and Justice NewsTracker

AG Pressed to File Suit Over FCC Broadband Ruling

A trio of prominent Tennessee House Republicans on Tuesday called for the state’s attorney general to challenge the Federal Communications Commission’s recent decision to strike down state restrictions on municipal broadband expansion.

Last week the FCC ruled in favor of the Electric Power Board of Chattanooga and their request to set aside a 1999 Tennessee law limiting municipal electric providers to offering internet services only within their electric footprint.

House Majority Whip Jeremy Durham and House GOP Caucus Chairman Glen Casada, both of Franklin, as well as Dresden Rep. Andy Holt, vice chairman of the House Agriculture and Natural Resources Committee, are urging state Attorney General Herbert Slatery to fight back against what they term the FCC’s “unconstitutional violation” of Tennessee’s sovereignty.

The three Republicans are accusing the FCC of having “usurped Tennessee law.”

In a press conference at the state Capitol Tuesday, Durham questioned the legality and appropriateness of “an unelected, federal body…overturn(ing) laws that have been made by the duly elected members of the Tennessee General Assembly.”

“I believe it’s another example of federal overreach. It doesn’t have to be the pen of Barack Obama and an executive order, sometimes it’s these unelected bodies like the FCC,” Durham said.

Whether or not the FCC ruling constitutes “good public policy or bad,” isn’t so much the issue as that the subverting of state laws sets “a very dangerous precedent,” said Durham.

According to FCC Chairman Tom Wheeler, the decision was made because “some states” have limited competition by designing “thickets of red tape,” and through its action, the commission is “cutting away that red tape consistent with Congress’s instructions to encourage the deployment of broadband.”

EPB officials, though cautious of possible pending litigation, praised the decision last week.

“Many neighbors have been struggling with the economic and educational disadvantages of not having access to broadband services. We are looking for the quickest path forward to help those neighbors join the 21st century information economy,” said Harold DePriest, EPB’s president and CEO, in a press release.

Gov. Bill Haslam told reporters Tuesday he’s still weighing options and mulling the FCC ruling and hadn’t made a decision on if he supports Tennessee appealing. “Before you decide to appeal something, you have to make certain that there’s a reasonable reason to do that,” Haslam said, adding that he’ll be looking to Slatery for guidance on the issue.

Haslam said he recognizes “value” in people gaining access to high-speed Internet if it is otherwise unavailable, but there are also concerns about “the local government subsidizing something that makes it hard for business to compete.”

The General Assembly’s Democrats issued a press release Tuesday afternoon criticizing the governor and lawmakers for working “to limit consumer choice,” instead of supporting the FCC’s decision to expand the choice for Tennesseans.

According to both chambers minority leaders — Memphis Sen. Lee Harris and Rep. Craig Fitzhugh of Ripley — Tennessee consumers “consider the matter settled” with the FCC ruling, and “don’t care so much about these technicalities,” if it means having access to high speed internet service.

Tullahoma Sen. Janice Bowling, a Republican, is pushing legislation this year to let municipal electric companies offer their services to what she called the “under-served or un-served” areas of the state.

Neither chamber has taken action on the bill.

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Press Releases

TN Senate Dems Criticize Haslam, Lawmakers for Opposition to FCC Municipal Broadband Ruling

Press release from the Tennessee Senate Democratic Caucus; March 3, 2015:

Consumers want choices, not government obstruction to limit Internet options

NASHVILLE – Tennessee lawmakers should embrace competition when it comes to broadband services, not work to limit consumer choice, Democratic leaders said.

“Anyone who has spent hours on the phone with a service provider to dispute a bill or get proper services knows consumers need more choices when it comes to Internet service,” Senate Minority Leader Lee Harris said. “It is disturbing to see lawmakers act so quickly to limit consumer choice when Tennesseans are demanding more.”

Last week the Federal Communications Commission ruled that Chattanooga’s EPB could provide lightning-speed Internet outside the municipal power distributor’s service area. The move would mean new options for consumers in the Chattanooga area and increased broadband speeds, which are a critical tool for economic development outside of major cities.

However, the governor, the attorney general and other lawmakers have stood in opposition to consumer choice, even considering a lawsuit against the federal government at great cost to the taxpayer.

“Communities like mine in rural West Tennessee don’t care so much about these technicalities,” said House Democratic Leader Craig Fitzhugh. “They care less about service areas and more about having access to fast, reliable Internet. If a provider wants to bring that to my constituents, I don’t think I want the state to get in the way.”

The decision whether to sue the FCC on this issue will be a true test of the attorney general’s independence.

“With the FCC ruling, consumers consider this matter settled,” Sen. Harris said. “No one wants to see our attorney general give in to demands from lawmakers who want to play politics rather than do what’s best for consumers and our economy.”

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Business and Economy Featured NewsTracker

Bowling Looking to Ease Expansion Limits on Government-Owned ISPs

Calling high-speed internet “an essential utility for the 21st Century,” Sen. Janice Bowling wants to ensure rural Tennesseans have access to it.

Sponsored by Bowling and Rep. Kevin Brooks, R-Cleveland, SB1134/HB1303 would allow municipal broadband providers to expand if they “obtain the written consent” of electric co-ops serving the affected areas.

A Republican from Tullahoma, Bowling is pushing to repeal a 1999 state law that restricts municipal electric providers from offering Internet service beyond their designated boundaries.

The Federal Communications Commission also voted Thursday to override those state laws.

However, Bowling told TNReport she wasn’t sure when the ruling would take effect, and would prefer to “go ahead and do what we need to do in Tennessee.”

According to FCC Chairman Tom Wheeler, the federal body’s action cuts away the “bureaucratic red tape” put on municipal broadband networks by states, and fulfills their congressional mandate to expand broadband service. “It is a well established principle that state laws that inhibit the exercise of federal policy may be subject to preemption in appropriate circumstances,” Wheeler said.

Wheeler called the decision “pro-competition,” and said consumers shouldn’t be restricted to “second-rate broadband.”

The Electric Power Board of Chattanooga and other municipal providers want the leeway to provide their government-funded high-speed broadband to areas beyond their electric system’s borders.

However, Tennessee’s private sector broadband providers argue many rural residents do have access to broadband, and the high speeds touted by municipal providers, while fashionable, are unnecessary and shouldn’t be subsidized by local tax dollars.

Tennessee Telecommunications Association Executive Director Levoy Knowles told TNReport Thursday his organization is opposed to the federal government “taking that authority away from the states.” TTA opposes Bowling’s legislation as well.

“We don’t feel like it’s fair to be competing against government-owned facilities in these same areas that we’ve spent millions of dollars in to put forth a modern network and provide our customers high speed internet service,” Knowles said.

TTA is composed of 21 small Tennessee telephone and broadband companies that serve “approximately 30 percent” of rural Tennessee. Nearly all their customers “already have broadband capability available to them” and the Internet service packages they offer often include “the same speeds and services and products that you can get in the metropolitan areas,” said Knowles.

Bowling argues, however, that her measure removes “the regulatory restriction” government has imposed. She believes consumers should have choices of providers “so that the people, locally, can be self-determined.” Those choices should include the opportunity for a publicly funded “municipal electric provider to come in and negotiate a deal,” she said.

While she understands businesses have “a bottom line” to meet, Bowling posits that rural communities shouldn’t be “held hostage” by limited private-market choices. Furthermore, even if the Internet services that are currently available are sufficient, they often aren’t for commercial uses. “It doesn’t work for doctors and it doesn’t work for bankers, it doesn’t work for a lot of the commercial uses of fiber,” she said.

High-speed internet “is to the 21st century what electricity was to the 20th century,” Bowling said. She compared providing broadband service to rural communities to “what the 1937 Rural Electric Administration bill did nationally, to allow these co-operatives.”

“So essentially what I’m asking for is the ability to form these high-speed broadband cooperatives in areas that are under-served or un-served,” Bowling said.

The Tennessee Municipal Electric Power Association, which represents the state’s 60 municipal electric providers, favors Bowling’s bill.

In a recent press release, Jeremy Elrod, TMEPA’s director of government relations likened the issue to a city’s decision on how to best provide power and water and called Internet service “the next utility of the 21st century.”

“Municipal electric broadband should be allowed to be an option for more communities across Tennessee,” Elrod said.

But opponents of Bowling’s legislation contend if the goal is high-speed internet blanketing the state, government officials should get out of the way and facilitate free-market competition between existing providers by reducing regulations.

In December, Knowles said while he understands the desire to extend service to unserved areas, his organization is “opposed to allowing the expansion when there is already service available.”

“Because when my members compete with the municipals, then we’re also on their pole attachments and we’re paying taxes — ad valorem taxes and sales tax and other local taxes — and governmental agencies many times are exempt from those type of taxes,” Knowles said.

However, Bowling called that a “strawman” argument.

“There’s no advantage to being in the same utility group that owns the pole, because their business plan that is approved and checked by the comptroller has to show that that has been paid for,” Bowling said.

But while state-level Republicans seek to strike down the restriction, Rep. Marsha Blackburn, R-Tenn. 07, has introduced legislation to block the FCC decision at the federal level. Blackburn also criticized the FCC’s vote in support of regulating the internet as a “1930s era public utility” under “net neutrality.”