In a speech delivered Wednesday at Cedar Falls, Iowa, President Obama pronounced his administration’s support for municipal broadband networks, informing his audience that “a community has the right to make its own choice and to provide its own broadband if it wants to.” Obama delivered his remarks as the FCC continues to consider petitions, filed last year by the cities of Chattanooga, Tennessee and Wilson, North Carolina, requesting the FCC to preempt state laws that limit or bar deployment of municipal broadband networks. Earlier this week, lawmakers in the state of Missouri introduced a bill to limit usage of municipal revenues for broadband network construction, and a February report published by Ars Technica shows that 20 states have enacted laws restricting municipal broadband deployment.
During his speech, Obama highlighted the success of the municipal broadband network operating in Cedar Falls, which boasts gigabit download speeds that surpass those offered by many private sector providers. Charging that some private sector ISPs are “doing everything they can to keep out new competitors,” Obama vowed, “we’re going to clear away red tape” and “help communities connect, and help communities succeed in our digital economy.” To that end, Obama called for the FCC’s help in “addressing barriers inhibiting local communities from responding to the broadband needs of their citizens.” Obama also outlined the following executive-level initiatives to foster municipal broadband deployment: (1) establishment of a new interagency council that would work toward removal of regulatory barriers, (2) vesting the Commerce Department with authority to offer support and technical assistance to cities that propose deployment of gigabit-speed networks, (3) ordering the Rural Utilities Service to develop new funding and loan programs for rural broadband providers, and (4) a June summit of mayors and commissioners of communities that already have municipal broadband networks.
The president’s speech elicited mixed reviews from the FCC’s commissioners, members of Congress, and industry players. FCC Commissioner Jessica Rosenworcel predicted that Obama’s recommendations “will put us on a course to grow broadband opportunity in more communities.” Commissioner Ajit Pai meanwhile warned: “U.S. Supreme Court precedent makes clear that the Commission has no authority to preempt state restrictions on municipal broadband projects.”
Taking issue with Obama’s remarks, House Energy and Commerce Committee Chairman Fred Upton (R-MI) asserted that, “state and local officials know better than beltway bureaucrats what’s best for their communities.” House Communications and Technology Subcommittee member Doris Matsui (D-CA) replied that Obama’s initiatives “will spur competition and provide communities with more choices in the broadband economy.” While acknowledging that municipal networks “may be appropriate in rare cases,” National Cable & Telecommunications Association President Michael Powell cautioned that “many such enterprises have ended up in failure, saddling taxpayers with significant long- term financial liabilities.” As such, Powell called for “sensible government policies that will build on our successes and convince even more Americans to take advantage of the broadband opportunity.”