FCC ruling to allow cities like Chattanooga to expand broadband service could face legal snags

The Federal Communication Commission ruled last week that cities like Chattanooga may expand their municipal broadband service, but Tennessee officials who oppose the decision are lining up to block the move.

On Tuesday Republican state lawmakers led by Rep. Jeremy Durham of Franklin urged state Attorney General Herbert Slatery to file a lawsuit challenging the decision as "a violation of state sovereignty."

Slatery said no decision has been made about the state's next step.

"We are disappointed the FCC would assert authority over a local governmental body, which is an area of responsibility resting exclusively with the state in which the local governmental body exists," the attorney general said in an emailed statement.

Slatery was among several prominent Republicans who had urged the FCC not to override a state law blocking Chattanooga's electric utility from expanding its super-fast Internet network beyond its current service area. Other letter writers included Gov. Bill Haslam and the speakers of the state House and Senate.

The FCC nevertheless voted 3-2 last week in favor of the utilities in Chattanooga and Wilson, North Carolina.

Slatery on Tuesday repeated an argument from his letter that "even with purported authorization from the FCC, a local governmental power board would still need state legislative authority to expand its service area."

Haslam told reporters after an appearance at Lipscomb University on Tuesday morning that he is still consulting with his advisers about whether a legal challenge would be "reasonable."

The governor said he's concerned about whether broadband subsidized by local governments would make it more difficult for private businesses to compete. Yet he also acknowledged that private telecommunications companies haven't offered super-fast Internet service to smaller cities like Chattanooga, Jackson, Clarksville and Tullahoma.

"Our job is to create a level playing field and then to do everything we can to make it be a net gain to the state," he said.

Google earlier this year announced it had selected Nashville, Atlanta and Raleigh-Durham and Charlotte in North Carolina to receive its fiber optic Internet service. AT&T has also said it plans to bring gigabit-speed service to Nashville, but has not said when.

In a telephone interview, Chattanooga Mayor Andy Berke hailed the FCC decision as a "a big step forward for our region," but acknowledged that legal challenges could delay an expansion. He said lawmakers should concentrate on passing long-thwarted legislation to remove barriers to municipal broadband rather than mounting legal challenges.

"What I care more about is hearing from the people who live in these areas, that they are going without broadband right now and they are excited about the future," Berke said. "Their response is a lot more powerful than those of politicians."

While big telecom companies like AT&T and Comcast have fought each other over issues like cable television service, both have been wary of municipalities encroaching on their turf with TV and Internet service. And the companies are big contributors to political campaign funds.

The telecommunications industry gave $643,000 to state and federal candidates and committees in Tennessee during the 2014 election cycle, according to the National Institute on Money in State Politics. That includes $211,400 from AT&T and $137,700 from Comcast.

"They do a good job in their lobbying efforts, and they have good, simple story to tell — which is always easier than a complicated story," said House Republican leader Gerald McCormick of Chattanooga. "So it will be tough to overcome that."