Federal and State Authority for Broadband Regulation

Abstract

Verizon’s challenge to the Federal Communications Commission’s 2010 Open Internet Order voided the substance of those rules. But even as the Commission lost the authority to enforce those rules, it gained substantial new regulatory powers. The D.C. Circuit expressly affirmed the Commission’s interpretation of section 706 of the Telecommunications Act of 1996, granting it general regulatory authority to promote the deployment of broadband infrastructure. The significance of this power can hardly be understated. The Commission has relied on this authority to preempt state statutes, to subsidize broadband deployment, and even to support, together with Title II of the Communications Act, new network neutrality rules. And the reach of section 706 extends beyond the federal commission and into state regulatory bodies: The statute explicitly vests state commissions with the authority to encourage the deployment of broadband to all Americans. Like the FCC, the states have pounced on this authority, using it to engage in substantive merger reviews, and to impose regulatory requirements on telecommunications companies.This concurrent grant of jurisdiction to the FCC and to state commissions thus has important implications for the unique brand of federalism that has dominated telecommunications regulation. Section 706’s dual grant of authority to federal and state regulators embraces an experimentalist approach to telecommunications regulation, allowing states to serve as laboratories of regulatory experiments, while empowering the FCC to generalize their successes.