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August 12th, 2016 3:43 pm
Appellate Court Rejects FCC’s Government Broadband Effort
Posted by Print

In this week’s Liberty Update, we highlight a humiliating new legal defeat for the Obama Administration in its continuing effort to evade legal reckoning for political persecution by the IRS.  Now, there’s yet another major court loss to report, this time against Obama’s overactive Federal Communications Commission (FCC).

Specifically, the Sixth Circuit Court of Appeals this week rejected FCC attempts to preempt individual state laws aimed at fostering private broadband innovation and growth.  For years, the Obama Administration has sought to encourage cities across the country to enter the broadband marketplace, thereby undermining private enterprises in the same business.  As CFIF has explained in our ongoing efforts to fight that effort, municipal broadband networks (otherwise known as government-owned networks or “GONs”) end up costing much more to build out and maintain than government officials expect or admit.  Moreover, consumers often pay 20% to 50% higher monthly bills than they would with private broadband providers.  It’s therefore no surprise that approximately 75% of GONs fail to realize a profit, causing many cities to fall even deeper into debt and end up selling their GONs at enormous losses.  The unfortunate experience in Provo, Utah provides a textbook illustration. Municipalities across America have better ways to spend taxpayer dollars than entering into competition against private broadband providers, not least because those private enterprises have invested $1.5 trillion in broadband infrastructure and continue to do so.

In order to shoehorn publicly-owned broadband through, Obama’s FCC resorted to infringing on individual state sovereignty by attempting to preempt state and local laws prohibiting these municipal boondoggles.  In other words, it attempted to govern how states could legislate within their own borders.  But the Sixth Circuit was having none of it.  The FCC order, it held, “essentially serves to reallocate decisionmaking power between the states and their municipalities.”

So mark down another embarrassing court defeat for the Obama Administration as it attempts to occupy as many sectors of the private economy as it can before time runs out in five months.

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