In both cases, cities petitioned the FCC for permission to build their own networks, in an attempt to increase competition with internet providers in their area. Unfortunately for those cities, state laws prevented the creation of municipal networks, a law in a total of 19 states.
According to the FCC, it was within its power to remove barriers preventing the creation of new broadband networks to create competition. However, the commission had not explicitly been granted permission to overrule state laws in this way, at least according to the court. The court says that in order for the FCC to be granted that power it needs to be clearly stated in federal law, which is not currently the case.
Of course, the ruling is a loss for the FCC and its plan to create municipal broadband networks and more competition among broadband providers. The FCC could appeal to the Supreme Court, but the commission has not yet indicated its next steps and its future plans considering the ruling.
“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,” FCC chairman Tom Wheeler said in a statement.
Beyond being a loss for the FCC (and for the general public), the ruling is a major win for internet service providers, who will continue to have little to no competition and somewhat of a monopoly in their areas.
