832 F.3d 597
6th Cir.2016Background
- Tennessee and North Carolina enacted statutes restricting municipal broadband expansion beyond municipal/service-area boundaries and imposing financial, procedural, and operational limits on municipal providers.
- Chattanooga’s EPB and Wilson, NC (Greenlight) operate municipal gigabit networks and petitioned the FCC to preempt their states’ restrictions to allow expansion into underserved neighboring areas.
- The FCC, invoking 47 U.S.C. § 1302 (§ 706 of the Telecom Act), concluded many of the state provisions were "barriers" to broadband deployment and competition and preempted most challenged provisions.
- Tennessee and North Carolina separately sought judicial review; the petitions were consolidated in the Sixth Circuit; states, NARUC, municipal petitioners, and the U.S. participated.
- The Sixth Circuit considered whether the FCC may preempt state laws that allocate decisionmaking between states and their political subdivisions absent a clear statement from Congress.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FCC may preempt state laws regulating municipal broadband under § 706 | TN/NC: FCC lacks clear congressional authorization to interpose federal authority between states and their municipalities | FCC: § 706’s broad command to remove barriers and promote competition authorizes preemption of state laws that impede broadband deployment | Clear-statement rule applies; § 706 does not contain the required clear statement; FCC order reversed |
| Applicability of the clear-statement rule when preemption affects state–municipal relations | TN/NC: Nixon requires a clear statement before federal law reallocates state/subdivision authority | FCC: distinctions from Nixon and prior practice permit preemption without an express clear statement | Court applies Nixon/Gregory clear-statement rule to preemption of state control over municipalities |
| Whether § 706 unambiguously authorizes preemption of state allocation-of-power choices | TN/NC: § 706’s language (remove barriers, promote competition) is too general and ambiguous to authorize intrusions on state sovereignty | FCC: § 706’s objectives and historical FCC practice support preemption authority | § 706 lacks the required clear statement to authorize the FCC to preempt these state laws |
| Scope of review / deference to FCC (Chevron) | TN/NC: clear-statement issue makes Chevron inapplicable to authorize agency preemption over state–municipal structure | FCC: agency interpretation of its statutory authority merits deference | Court declines to resolve Chevron deference broadly but holds clear-statement analysis controls; preemption not sustained |
Key Cases Cited
- Nixon v. Missouri Mun. League, 541 U.S. 125 (2004) (clear-statement rule required before preempting state law that governs municipalities)
- Gregory v. Ashcroft, 501 U.S. 452 (1991) (clear statement required when federal statute affects traditional state functions)
- Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (framework for judicial deference to agency statutory interpretations)
- Wis. Pub. Intervenor v. Mortier, 501 U.S. 597 (1991) (states’ arrangements with political subdivisions warrant protection from implied federal preemption)
- City of Abilene v. F.C.C., 164 F.3d 49 (D.C. Cir. 1999) (agency preemption authority in communications contexts discussed)