Bloomberg News

City Seeks U.S. Override to Expand Internet on AT&T Turf

July 24, 2014

Chattanooga, Tennessee, asked federal regulators to overrule a state law preventing the sale of the city’s high-speed Internet service in neighboring areas served by AT&T Inc. (T:US) and Charter Communications Inc. (CHTR:US)

Chattanooga’s Electric Power Board, which sells residents broadband Internet in addition to electricity, told the U.S. Federal Communications Commission in a petition today it can’t serve surrounding areas -- described as “a digital desert” -- where residents have “very limited speeds” for Internet.

There is growing political divide in Washington over Internet services provided by local governments, at times for lower prices than companies charge, or to connect areas that weren’t being served. Democrats have said municipal broadband networks should be free of state restrictions and Republicans have opposed overriding state laws.

FCC Chairman Tom Wheeler, a Democrat, has told Congress he has the power to override state laws as part of the agency’s mission to promote broadband, or high-speed Internet service. Wheeler in an e-mailed statement today said the agency would “carefully review” Chattanooga’s petition and a similar request from Wilson, North Carolina.

“We don’t need unelected bureaucrats in Washington telling our states what they can and can’t do,” Representative Marsha Blackburn, a Tennessee Republican who is pushing Congress to bar the FCC from preempting state municipal broadband laws, said in an e-mailed statement. “This is an issue that should be left to our states.”

Comcast Competition

Twenty states now prohibit or restrict municipal Internet service “at the behest of large cable and telecom interests,” Representative Mike Doyle, a Pennsylvania Democrat, told colleagues in a June 15 letter distributed by e-mail.

Chattanooga’s Electric Power Board told the FCC in its filing that after it began service, Comcast Corp. (CMCSA:US) halted annual price increases and reduced its rates.

The power board now serves 60,000 video customers, it told the FCC.

Chattanooga’s Chamber of Commerce has identified 1,000 jobs created since 2010 that have a direct connection to the fiber network, the power board said in its petition.

The power board has been asked to extend service by nearby communities that today have service from AT&T and Charter, “just not very high-speed choices,” Danna Bailey, a spokeswoman for the agency, said in an interview.

“True broadband infrastructure provides access to information, jobs, and education,” Harold DePriest, the power board’s president, said in an e-mailed statement. “Communities should have the right, at the local level, to determine their broadband futures.”

The city of Wilson, North Carolina, also submitted a petition to the FCC today asking the agency to preempt a state law it said prevents it from expanding its high-speed network.

Wilson’s network offers business and residential customers lower prices, and the competition it poses has forced established providers including Time Warner Cable Inc. to offer better service and rates, the city told the FCC.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editors responsible for this story: Romaine Bostick at rbostick@bloomberg.net Elizabeth Wasserman


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Companies Mentioned

  • T
    (AT&T Inc)
    • $33.87 USD
    • 0.21
    • 0.62%
  • CHTR
    (Charter Communications Inc)
    • $157.81 USD
    • 1.77
    • 1.12%
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