January 30, 2004—In January, the US Supreme Court heard oral argument in Nixon vs. Missouri Municipal League—a case in which municipalities and municipally owned utilities are attempting to remove barriers that prevent them from entering the telecommunications marketplace.
The root of the case is Section 253(a) of the Telecommunications Act of 1996, which states: “No state or local statute or regulation, or other state or local requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate telecommunications service.”
Through a series of lower court decisions, the Federal Communications Commission has argued that “any entity” does not include municipalities and public utilities. According to a brief given by the American Public Power Association (APPA) at the January hearing, “Municipalities and municipally-owned utilities are unquestionably entities in the ordinary meaning of that term. Moreover, any entity is precisely the phrase Congress would have chosen if it was seeking to be as inclusive as possible: if it meant to foreclose any possibility that a State might exclude a potential entrant from providing telecommunications services.”
“We believe that a Supreme Court victory will require the Federal Communications Commission to pre-empt all state barriers to municipal entry in the telecommunications marketplace,” said APPA General Counsel Richard Geltman. More than 550 public power systems currently offer some kind of broadband services to their communities for internal or external purposes. Twelve states have created anti-competitive barriers to entry for public power utilities.
A Supreme Court decision is expected in the spring.
