Wednesday, March 24, 2004 - The Progress & Freedom Foundation Blog

Defeat for Government-Owned Telecoms

Just quickly scanned the Supreme Court's decision this morning in Nixon v. Missouri Municipal League holding (8 to 1) that the FCC lacks authority to preempt municipalities from providing telecom services. The court held that Section 253 of the 1996 Telecommunications Act, which grants the FCC the authority to preempt state laws which have the effect of "prohibiting the ability of any entity" to provide telecom services, does not extend to preemption of state laws precluding munis from entering the telecom business.

Apart from the intricacies of the statutory interpretation question, the bottom-line result is a good one from a policy perspective. As PFF has documented, more and more municipalities are entering the telecom business. This is not good for consumers, taxpayers, private sector providers, or a competitive free marketplace for telecom. See our two recent studies here and here.

And don't miss this truism from the Court, which bears repeating often enough to sink in: '[W]hen government regulates itself (or the subdivision through which it acts) there is no clear disctinction between the regulator and the entity regulated." Amen and amen.

posted by Randolph May @ 12:26 PM | General