Government-run Internet service could set off flurry of lawsuits

Regulators will likely run into a host of lawsuits if they make an expected move to override state laws limiting local governments from building out their own broadband Internet services, state legislators and officials predicted on Monday.

“Short-term, I can see a lot of litigation over this municipal broadband, a lot of taxpayer dollars wasted litigating this municipal broadband,” Brad Ramsay, the general counsel for the National Association of Regulatory Utility Commissioners, told reporters.


“I do really see that that’s where this goes,” echoed Minnesota state Rep. Joe Atkins (D), “and that’s terrifically unfortunate because you’re talking about all of the dollars that get invested ... are just somebody’s tax dollars, and that’s really, really tragic.”

The Federal Communications Commission (FCC) is expected to act next month on requests to preempt state laws in North Carolina and Tennessee that limit local towns from expanding government-run Internet service providers.

The towns say that the municipal services provide valuable competition in the market for broadband service, which is otherwise often dominated by just a few companies. President Obama has backed up the call for the FCC to act, and a number of congressional Democrats introduced legislation last week to ban states from restricting municipal broadband networks.

But state officials have pushed back.

Allowing the federal government to block state laws on broadband, they say, could empower the government to run roughshod over any laws it pleases.

“I’m concerned obviously about this preemption, but I’m really concerned about the precedent it sets for other preemption as well,” South Carolina state Sen. Thomas Alexander (R) said. “I really think that we need to do everything we can to put our stake in the ground here to make sure that we have all the forces that we can to move forward.”

“At the end of the day,” he added, “I think it’s going to end up in court.”