FCC considers overriding state laws that hamper spread of city-owned broadband services

Industries Associated Press

The Federal Communications Commission could override state laws blocking city-owned broadband companies from expanding and competing with commercial Internet providers.

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The FCC meets Thursday in Washington to consider pre-empting laws in two states that limit broadband operations municipalities started after telecommunications companies elected not to expand fast service.

Broadband services built by Wilson, North Carolina, and Chattanooga, Tennessee, offer super-fast gigabyte speeds at low cost. They're barred by state laws from readily expanding to neighboring towns.

President Barack Obama supports FCC action to break down such laws in 19 states. The White House says the laws stifle competition and economic development.

Guggenheim Securities telecom analyst Paul Gallant says the FCC action won't have an enormous effect. He notes that even in the 31 states without restrictions, cities and towns aren't big competitors for broadband companies.