DISSENTING STATEMENT OF
COMMISSIONER AJIT PAI
Re: City of Wilson, North Carolina Petition for Preemption of North Carolina General Statute 
Sections 160A-340 et seq., WC Docket No. 14-115, The Electric Power Board of Chattanooga, 
Tennessee Petition for Preemption of a Portion of Tennessee Code Annotated Section 7-52-601, 
WC Docket No. 14-116.
In 1999, the State of Tennessee authorized municipal electric systems to provide Internet service 
within the boundaries of their service areas.
1
  The legislation enjoyed widespread support among 
Tennessee’s elected representatives.  It passed the Tennessee General Assembly and the Tennessee Senate
unanimously, each of which was under the control of the Democratic Party.  The votes were 96-0 and 32-
0, respectively.
2
  The Republican Governor of Tennessee then signed the bill into law.
3
Today, however, three unelected officials in Washington, DC, purport to rewrite Tennessee law
on a party-line vote.  Specifically, they attempt to empower Tennessee municipal electric systems to offer 
broadband service outside of their service areas—authority which those systems have never possessed.  
While they do not contest that Tennessee may prohibit municipal electric systems from offering Internet 
service altogether, the Order claims that the Volunteer State may not grant municipalities such authority 
on the condition that they only serve customers within their service areas.  In other words, once the 
people’s elected representatives allow municipalities to offer any Internet service at all, the camel’s nose 
owns the tent.
This decision, along with the decision to preempt a similar North Carolina law,
4
does not make 
any sense.  Even more importantly, it is unlawful.  Supreme Court precedent makes evident that the FCC 
simply does not have the power to do what it claims to be doing.  In taking this step, the FCC usurps
fundamental aspects of state sovereignty. And it disrupts the balance of power between the federal 
government and state governments that lies at the core of our constitutional system of government.  
Whatever the merits of any particular municipal broadband project—and to be clear, on this question I 
take no position, deferring to voters and elected officials—I do not believe this agency has the power to 
preempt.  I therefore dissent.
I.
Let’s begin with the one key point that today’s Order does not dispute:  The Commission cannot 
preempt state laws that flat-out prohibit municipalities from offering broadband service.  Why?  The 
answer begins with Constitutional Law 101.
Our Constitution establishes a system of dual sovereignty between the States and the federal 
government, such that sovereignty rests concurrently with both the federal government and the States.
5
Specifically, the Tenth Amendment reserves all powers not specifically delegated to the federal 
government by the Constitution to the States or to the people.
6
Thus, States are not creations of the 
                                                     
1
Tenn. Code Ann. § 7-52-601.
2
HB 1032, TENN. GEN. ASSEMBLY, http://go.usa.gov/3cQfH (last visited Feb. 24, 2015).
3
Id.
4
N.C. Gen. Stat. §§ 160a-340 through 160a-340.6.
5
Gregory v. Ashcroft, 501 U.S. 452, 457 (1991) (citing Tafflin v. Levitt, 493 U.S. 455, 458 (1990)).
6
See U.S. CONST. Amdt. 10.
2central government.  They are separate sovereigns.  This distribution of sovereignty, otherwise known as 
federalism, is the defining feature of the relationship between the federal and state governments. 
The relationship between a State and its political subdivisions (counties and cities), however, is 
an entirely different animal.  Legally speaking, municipalities exist as arms of the State.  As the Supreme 
Court has explained, municipalities are “created as convenient agencies for exercising such of the 
governmental powers of the State as may be entrusted to them . . . in [its] absolute discretion.”
7
  Because 
a municipality is merely a department of the state, the state may withhold, grant or withdraw powers and 
privileges to a municipality as it sees fit. That is to say, cities and counties are not sovereign.
8
  A 
municipality has “no privileges or immunities under the federal constitution which it may invoke in 
opposition to the will of its creator.”
9
What does all of this mean for purposes of today’s Order?  First, as a result of our system of dual 
sovereignty, the Supreme Court has advised that any “federal legislation threatening to trench on the 
States’ arrangements for conducting their own governments should be treated with great skepticism.”
10
  
Specifically, in Gregory v. Ashcroft, the Court held that if Congress wishes to allow the federal 
government to preempt the States’ historic powers, it must make its intent “unmistakably clear.”
11
  This 
has come to be known as the clear statement rule.
And second, because localities are merely creations of the State, any attempt by the federal 
government to interfere with a State’s governance of its own municipalities necessarily “constrains 
traditional state authority to order its government.”
12
Indeed, the D.C. Circuit has held that “interfering 
with the relationship between a State and its political subdivisions strikes near the heart of State 
sovereignty.”
13
Each of these points applies to this Order.  It should come as no surprise that any attempt by the 
Commission to preempt a state statute prohibiting municipalities from offering broadband service would 
trigger the clear statement rule.  The Supreme Court case of Nixon v. Missouri Municipal League is 
squarely on point.  In that case, the Court confronted the question of whether the FCC could use section 
253 of the Communications Act to preempt a Missouri law that prohibited municipalities from providing 
telecommunications services.  The Court concluded that Missouri’s ability to determine whether its 
municipalities could provide such services was part and parcel of the “traditional state authority to order 
its government.”
14
It therefore decided that the clear statement rule from Gregory applied.
15
                                                     
7
Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 607-08 (1991) (alteration in original) (internal quotation 
marks and citations omitted) (quoting Sailors v. Board of Ed. of Kent Cty., 387 U.S. 105, 108 (1967)).
8
Reynolds v. Sims, 377 U.S. 533, 575 (1964) (“Political subdivisions of States—counties, cities, or whatever—
never were and never have been considered as sovereign entities”).  Indeed, nothing in the U.S. Constitution 
prevents a State from abolishing municipalities altogether.
9
Ysursa v. Pocatello Educ. Ass’n, 555 U.S. 353, 362 (2009) (citing Williams v. Mayor of Balt., 289 U.S. 36, 40 
(1933)).
10
Nixon v. Missouri Mun. League, 541 U.S. 125, 140 (2004).
11
Gregory, 501 U.S. at 460 (quoting Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242 (1985)).
12
Nixon, 541 U.S. at 130.
13
City of Abilene v. FCC, 164 F.3d 49, 52 (D.C. Cir. 1999).
14
Nixon, 541 U.S. at 130. 
15
Id.  Of course, the fact that this Order deals with broadband services while Nixon addressed telecommunications 
services is of no constitutional moment.  The federalism implications are exactly the same.  In any event, today the 
Commission in another item reclassifies broadband service as a telecommunications service.  Protecting and 
(continued…)
3It is also apparent that any attempt by the Commission to preempt state prohibitions on 
municipalities offering broadband service would not satisfy the clear statement rule.  The Court’s decision 
in Nixon is again instructive.  There, Missouri municipalities argued that section 253 of the 
Communications Act gave the Commission the authority to preempt the Missouri statute at issue.
16
  Here 
is what section 253 had to say in relevant part:
(a) In general
No state or local statute or regulation, or other State or local legal requirement, may 
prohibit or have the effect of prohibiting the ability of any entity to provide any interstate 
or intrastate telecommunications service.
. . .
(d) Preemption
If, after notice and an opportunity for public comment, the Commission determines that a 
State or local government has permitted or imposed any statute, regulation, or legal 
requirement that violates subsection (a) or (b) of this section, the Commission shall 
preempt the enforcement of such statute, regulation, or legal requirement to the extent 
necessary to correct such violation or inconsistency.
17
But despite the fact that section 253(a) specifically contemplates the preemption of state laws and 
section 253(d) specifically directs the Commission to preempt state laws that have the effect of 
prohibiting the offering of telecommunications services, the Supreme Court still concluded that section 
253 did not contain the requisite clear statement necessary for the Commission to preempt. As Justice 
Souter explained in his opinion for the Court, it was ambiguous whether Congress intended the phrase 
“any entity” in section 253(a) to include state and municipal entities. The Court thus held that section 253 
was insufficiently clear to satisfy Gregory’s clear statement rule.
18
Here, the Commission relies on section 706 of the Telecommunications Act of 1996, not section 
253 of the Communications Act, for its authority to preempt state laws governing municipal broadband.  
But if section 253 could not clear the high hurdle presented by Gregory, section 706 falls even further 
short of the mark.
For starters, while section 253 at least expressly mentions preemption, the text of section 706 
makes no reference to it whatsoever.  Section 706(a) urges the Commission to encourage broadband 
deployment using an enumerated list of tools that includes “price cap regulation, regulatory forbearance, 
measures that promote competition in the local telecommunications market, or other regulating methods 
that remove barriers to entry.
19
Preemption is nowhere discussed.  Similarly, section 706(b) tasks the 
Commission with evaluating the current state of broadband deployment and, if necessary, “tak[ing]
immediate action to accelerate deployment of such capability by removing barriers to infrastructure 
(Continued from previous page)                                                           
Promoting the Open Internet, GN Docket No. 14-28, Report and Order on Remand, Declaratory Ruling, and Order, 
FCC 15-XXX (2015) (reclassifying broadband Internet access service as a telecommunications service).
16
Nixon, 541 U.S. at 128.
17
Telecommunications Act of 1996, Pub. L. No. 104-104, § 253, 110 Stat. 56 (codified at 47 U.S.C. § 253)) 
(emphasis added).
18
Nixon, 541 U.S. at 140–41.
19
Telecommunications Act § 706(a) (codified at 47 U.S.C. § 1302(a)).
4investment and by promoting competition in the telecommunications market.”
20
  Again, there’s no 
mention of preemption.
21
In short, section 706 does not “point unequivocally to a commitment by Congress”
22
to permit the 
FCC to preempt state laws governing their own municipalities.  Section 706 therefore does not satisfy the 
clear statement rule and does not permit the Commission to preempt state prohibitions on municipal 
broadband projects.  Indeed, it’s far from certain that section 706 even gives the Commission the ability 
to preempt state laws regulating private actors—but more on that later.
23
II.
Notwithstanding all of this, the Commission nonetheless maintains that it can preempt the 
Tennessee and North Carolina laws at issue here.  Why?  According to the Order, the clear statement rule 
does not apply because Tennessee and North Carolina have not prohibited municipalities from offering 
broadband service altogether.  They have only imposed restrictions on their ability to do so.
24
The Order claims that the relevant Tennessee and North Carolina laws do not implicate “core 
attributes of state sovereignty.”
25
  Instead, it asserts that when States impose restrictions on municipal 
broadband less onerous than a flat-out ban, such restrictions are magically transformed into an 
effectuation of a “state’s preferred communications policy objectives”—and therefore subject to federal 
preemption if they conflict with federal policy objectives.
26
What difference does any of this make?  A state is not stripped of its core sovereign power to
govern its political subdivisions, which are arms of the state, merely because it grants them certain 
powers. Rather, “[t]he number, nature, and duration of the powers conferred upon [municipal] 
corporations and the territory over which they shall be exercised rest[] in the absolute discretion of the 
state.”
27
And a state does not relinquish that “absolute discretion” simply by affording a municipality 
some, rather than plenary, authority to offer broadband service.  Unfortunately for the Commission, all 
the lipstick in the world cannot disguise this pig.
A.
Take, for example, the geographic restrictions set forth in the Tennessee and North Carolina laws
at issue here.  In Tennessee, a municipal electric system is authorized to offer broadband service within its 
                                                     
20
Id. § 706(b) (codified at 47 U.S.C. § 1302(b)).
21
For purposes of Sections I, II, and III of this statement, I will assume arguendo that section 706 provides the 
Commission with some measure of independent authority.  However, in Section IV, I will explain why I do not 
believe that section 706 delegates to the Commission any additional authority.
22
Nixon, 541 U.S. at 141.
23
See infra Section III.
24
Order at para. 162.
25
Id. at para. 157.
26
Id. at para. 147.
27
Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60, 71 (1978) (emphasis added) (quoting Hunter v. Pittsburgh, 207 
U.S. 161, 178 (1907)).
5service area, but not outside of those boundaries.
28
  In North Carolina, a city may only provide broadband 
services within its city limits.
29
These geographic restrictions go to the heart of a state’s “traditional [] authority to order its 
government.”
30
  Indeed, the Commission’s claim to the contrary is absurd.  A critical component of a
state’s ability to order its government is the ability to organize its own municipal subdivisions.  And a 
critical component of organizing municipalities is the power to define each subdivision’s geographic 
reach. For inherent in the concept of a subdivision is the idea that a locality will exercise authority over a 
limited geographic area within a State.  For example, the definition of a “city” under North Carolina law 
is “a municipal corporation organized under the laws of this State for the better government of the people 
within its jurisdiction.”
31
  Indeed, if a State could not confine a municipality’s activities to a specified 
geographic area, then there would be little point in maintaining local governments at all; it would be more 
efficient to do everything at the state level.
This is why the U.S. Supreme Court has made clear: “[T]he territory over which [a 
municipality’s powers] shall be exercised rests in the absolute discretion of the state.”
32
  Thus, when the 
Commission tries to preempt provisions of Tennessee and North Carolina law that impose geographic 
restrictions on municipalities’ activities with respect to broadband, it is directly interfering with a core 
aspect of state sovereignty—namely the ability of Tennessee and North Carolina to make “arrangements 
for conducting their own governments”
33
and to determine “the territory over which [their municipalities’ 
powers] shall be exercised.”
34
The implausibility of the Commission’s claim to the contrary is perhaps best illustrated by a 
couple of hypotheticals.  Suppose, for example, that the federal government attempted to tell Tennessee 
that it could not limit the City of Chattanooga’s Police Department to enforcing the law in Chattanooga.  
Instead, once the State of Tennessee authorized the City of Chattanooga to have a police department, it 
was required to let Chattanooga’s police officers have free rein to patrol from Memphis to Knoxville.  
Would anyone seriously contend that such an edict from the federal government wouldn’t interfere with 
Tennessee’s ability to order its political subdivisions?  Of course not.  
Or suppose that the federal government tried to forbid North Carolina from limiting the City of 
Wilson’s Parks and Recreation Department to operating parks only within Wilson.  Instead, if North 
Carolina wanted to allow Wilson to have a Parks and Recreation Department, it would have to permit the 
Department to operate parks from Asheville to the Outer Banks.  Again, such a mandate from the federal 
government would obviously interfere with North Carolina’s ability to order its political subdivisions as it 
sees fit.
B.
There are other problems with the Commission’s contention that it can preempt state restrictions 
on municipal broadband projects.  To begin with, such a claim leads to an exceptionally strange result.  
While a state would be free to ban municipal broadband projects outright, it would be forbidden from 
                                                     
28
Tenn. Code Ann. § 7-52-601.
29
N.C. Gen. Stat. §§ 160a-340.1(a)(3).
30
Nixon, 541 U.S. at 130.
31
N.C. Gen. Stat. § 160A-1(3).
32
Holt Civic Club, 439 U.S. at 71.
33
Nixon, 541 U.S. at 140.
34
Holt Civic Club, 439 U.S. at 71.
6imposing more modest restrictions on such projects.  Or, in other words, the most severe state law
restrictions on municipal broadband projects (prohibitions) could not be preempted, whereas less stringent 
restrictions (those that purportedly do not amount to prohibitions) could be preempted.
I highly doubt that Congress adopted, much less intended, such a convoluted framework when it 
enacted the Telecommunications Act of 1996, in part because this would lead to perverse consequences.  
For example, if a state is denied the power to authorize municipalities to offer broadband service with 
conditions, it will be less likely to authorize them to do so at all.  And if, as the Commission suggests, 
municipal broadband projects truly advance section 706’s aim of enhancing broadband deployment and 
competition, it would seem odd to interpret the statute in a manner that would push states toward 
prohibiting municipal broadband projects altogether.
35
C.
Moreover, the line the Commission draws between state prohibitions of municipal broadband 
projects (which it claims present “a different question”
36
) and state restrictions on such projects is 
artificial and thus untenable.  This is because all conditions on the provision of services are effectively 
prohibitions when those specified conditions are not satisfied.
Consider, for example, a state law stating that a municipality may not offer broadband service so 
long as at least one private broadband provider is offering service to all residents of that municipality.  
The Commission likely would claim that such a law would be a restriction on municipal broadband 
projects subject to preemption under section 706 because it does not forbid a municipality from providing 
broadband service in all circumstances.  But in reality, the state law functions as a prohibition as applied 
to any municipality where all residents are being offered broadband service by a private provider.
Or consider a state law providing that municipalities were authorized to operate municipal 
broadband projects beginning January 1, 2020.  Would that condition as to timing be a restriction that 
could be preempted using section 706?  Or would it be a prohibition on municipal broadband projects 
through the end of 2019 that could not be preempted?
In short, the heart of the Commission’s analysis rests not on a principled distinction but 
semantics.  And no matter what wordplay the Commission employs, it cannot escape one basic fact:  
Through preemption, the Commission is attempting to provide municipalities in Tennessee and North 
Carolina with authority that their state governments have not given them.  
                                                     
35
Indeed, it is worth nothing that in 1997, the Commission explicitly encouraged states to impose restrictions on 
municipal entry into the telecommunications market that would fall short of a total prohibition.
[W]e encourage states to avoid enacting absolute prohibitions on municipal entry into 
telecommunications . . . . Municipal entry can bring significant benefits by making additional 
facilities available for the provision of competitive services. At the same time, we recognize that 
entry by municipalities into telecommunications may raise issues regarding taxpayer protection 
from the economic risks of entry, as well as questions concerning possible regulatory bias when 
separate arms of a municipality act as both a regulator and a competitor. We believe, however, 
that these issues can be dealt with successfully through measures that are much less restrictive 
than an outright ban on entry, permitting consumers to reap the benefits of increased competition.
Pub. Util. Comm’n of Tex. et al., CCB Pols. 96-13, 96-14, 96-16, 96-19, Memorandum Opinion and Order, 
13 FCC Rcd 3460, 3549, para. 190 (1997).
36
Order at para. 147.
7Such action would interfere with “States’ arrangements for conducting their own governments”
37
because it would be inconsistent with the fundamental principle that a State has “absolute discretion” to 
determine the “number, nature, and duration” of the powers it wishes to entrust to its municipalities.
38
  As 
a result, there must be a clear statement that Congress intended to give the Commission the authority to 
infringe upon the sovereignty of Tennessee and North Carolina in this manner—a clear statement that is 
nowhere found in section 706.
III.
But it even gets worse for the Commission’s position.  For not only does section 706 lack any 
clear statement necessary to preempt “States’ arrangements for conducting their own governments,” I also 
very much doubt that it even gives the Commission the authority to preempt any state laws, even those 
governing private actors.
For example, section 601(c)(1) of the Telecommunications Act of 1996 states: “NO IMPLIED 
EFFECT- This Act and the amendments made by this Act shall not be construed to modify, impair, or 
supersede Federal, State, or local law unless expressly so provided in such Act or amendments.”
39
The 
Commission acknowledges that “[b]y its terms, section 601(c) prevents ‘implied’ preemption”
40
and 
nowhere claims that section 706 expressly refers to the preemption or impairment of state law.
Nonetheless, the Commission tries to circumvent this prohibition by claiming that section 601(c) 
only prevents the Act itself from being read to preempt state law by implication.  Section 601(c), 
according to the Commission, does not prevent the Act from being read to implicitly give such 
preemptive powers to the Commission.
41
  Nowhere does the Order contain any explanation for why 
Congress would have intended such an odd result.  It is difficult to believe that Congress would have been 
concerned about implicitly superseding state law in the text of the Act yet would implicitly give the 
Commission the authority to do the exact same thing.  No, section 601(c) “counsel[s] against any broad 
construction” of the 1996 Act “that would create an implicit conflict with state [] law.”
42
Here, that 
principle suggests not reading section 706 of the Telecommunications Act so broadly as to give the 
Commission the power to manufacture conflicts with state law.  Hence, it counsels against interpreting 
section 706 to give the Commission the power to preempt state law.
There’s an additional problem with the Commission’s approach: Section 706(a) extends beyond 
the FCC.  Remember that the text of that subsection gives the FCC “and each State commission with 
regulatory jurisdiction over telecommunications services” the same direction: to “encourage the 
deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans 
(including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner 
consistent with the public interest, convenience, and necessity, price cap regulation, regulatory 
forbearance, measures that promote competition in the local telecommunications market, or other 
regulating methods that remove barriers to infrastructure investment.”
43
                                                     
37
Nixon, 541 U.S. at 140.
38
Wisconsin Pub. Intervenor, 501 U.S. at 607–08 (citations omitted); Holt Civic Club, 439 U.S. at 71 (quoting 
Hunter v. Pittsburgh, 207 U.S. 161, 178 (1907)).
39
Telecommunications Act of 1996, Pub. L. No. 104-104, § 601(c), 110 Stat. 56 (codified at 47 U.S.C. § 152).
40
Order at para. 153.
41
Id.
42
Pinney v. Nokia, Inc., 402 F.3d 430, 458 (4th Cir. 2005).
43
Telecommunications Act of 1996 § 706(a) (codified at 47 U.S.C. § 1302(a)).
8Therefore, if section 706(a) authorizes the FCC to preempt state law, it would appear to empower 
State commissions to do the same.  Recognizing the absurdity of this result (and perhaps how problematic 
it is from a federalism standpoint), the Order contends that the phrase “other regulating methods” in 
section 706(a) means one thing when applied to the FCC and another when applied to State 
commissions.
44
  But nothing in the text of the statute supports that argument. Only by rewriting section 
706(a), rather than interpreting it, can the Commission reach this result.
45
As support for its position, the Order looks to the D.C. Circuit’s decision in Verizon v. FCC.
46
  
But there, the D.C. Circuit simply said that it was not implausible to believe that Congress would have 
granted authority to State commissions in section 706(a).  The court nowhere stated that a single phrase in 
section 706(a)—“other regulating methods”—could mean two different things in the same provision.
Turning to section 706(b), the case for interpreting the statute to permit the Commission to 
preempt state law is similarly unavailing.  Under the Commission’s own interpretation of section 706(b), 
the provision only gives the Commission authority when the FCC determines that advanced 
telecommunications capability is not being deployed to all Americans in a reasonable and timely fashion.  
And the Commission asserts that it currently possesses the power to use section 706(b) to preempt state 
laws because it has made such a negative determination.
47
  But that argument presents a pickle: What 
happens if the Commission finds at a later date that broadband is being deployed to all Americans in a 
reasonable and timely fashion?  Once the Commission’s supposed section 706(b) authority evaporates, 
would any state laws that were preempted under section 706(b) cease to be preempted?  That would seem 
to be the case since the Commission’s authority to preempt such laws would no longer exist.  But this 
would be an odd result to say the least (notice the recurring theme here).  Indeed, I am unaware of any 
similar statutory scheme involving preemption, which again suggests that Congress did not intend to give 
the Commission the power to preempt state law under section 706(b).
48
Furthermore, the statutory history underlying section 706(b) also points in the same direction.
When the Senate in 1995 passed the bill that became the Telecommunications Act of 1996, that 
legislation contained a precursor to section 706(b) that authorized the FCC, if it determined that 
broadband was not being deployed in a reasonable and timely fashion, to “preempt State commissions 
that fail to act to ensure [the] availability [of advanced telecommunications capability to all 
Americans].”
49
  But Congress ultimately decided not to grant this preemptory power to the Commission 
and eliminated that language from the final version of the bill.  
                                                     
44
Order at para. 151.
45
Cf. Clark v. Martinez, 543 U.S. 371, 378 (2005) (“To give these same words a different meaning for each 
category would be to invent a statute rather than interpret one.”).
46
Id. (citing Verizon v. FCC, 740 F.3d 623, 638 (D.C. Cir. 2014)).
47
Order at para. 137.
48
Relying on a statement contained in a dissenting opinion by a U.S. Supreme Court Justice, the Order speculates 
that “Commission actions adopted pursuant to a negative section 706(b) determination would not simply be swept 
away by a future positive section 706(b) finding.” Order at note 374.  But what authority would the Commission 
have to maintain the preemption of state law under section 706(b) without section 706(b) authority? Indeed, if 
Congress gave the Federal Emergency Management Agency (FEMA) authority to preempt state law during a 
hurricane, would anyone think that FEMA could continue to preempt that state law once the storm had passed, 
sunny skies had returned, and recovery efforts were over?  Of course not.  So too here.  But more to the point, even 
asking this question is sure to trap the agency in the labyrinth of section 706(b)’s on-off authority; the only way to 
escape is not to enter in the first place.  Here, that means not interpreting section 706 to provide the Commission 
with the authority to preempt state law.  
49
See S. 652 § 304(b) (104
th
Cong. 1995) (contained in “Title III—An End to Regulation”).
9The fact that Congress expressly contemplated providing the Commission with the power to 
preempt in section 706 but removed such language from the legislation strongly counsels against 
interpreting the provision to allow the Commission to preempt state law.  As the Supreme Court 
explained in a similar case involving a Conference Committee removing language from a House bill, 
Congress’s “action strongly militates against a judgment that Congress intended a result that it expressly 
declined to enact.”
50
  Accordingly, there can be no doubt that neither the text of the statute nor its 
legislative history provides support for the argument that section 706(b) gives the Commission the power 
to preempt state law.
One more point regarding the statutory history merits mention.  The discussion of preemption in 
both the Senate’s version of the Act only involved Commission authority to preempt State commissions.  
This Order, however, involves the preemption of statutes passed by the Tennessee and North Carolina 
State legislatures. Although the Order claims that this is helpful to the Commission’s case,
51
it actually 
cuts the other way.  For if Congress was unwilling to give the Commission the authority to preempt State 
commissions, it strains credulity to believe that it intended to empower the Commission to take the far 
more serious step of displacing the will of a State’s democratically-elected legislators.  
Finally, at the very least, section 601(c) and the text and statutory history of section 706 add 
substantial weight to the argument that section 706 does not give the Commission the authority to 
preempt state restrictions on municipal broadband.  That is because they make it even more obvious that 
section 706 does not contain the “unmistakably clear” statement required by Gregory.  Any interpretation 
that suggests otherwise requires one to grasp at statutory straws.
IV.
There is one last reason why section 706 doesn’t give the Commission authority to preempt 
Tennessee or North Carolina laws pertaining to municipal broadband projects.  Up until this point, I have 
accepted for the sake of argument the premise that section 706 gives the FCC some measure of 
independent authority.  But it doesn’t.  The text, statutory structure, and its legislative history all make 
clear that Congress intended section 706 to be hortatory—not delegatory—in nature.
Although each of its subsections suggests a call to action (“shall encourage,” “shall take 
immediate action”), neither reads like nor is a delegation of authority.  For one, neither subsection 
expressly authorizes the FCC to engage in rulemaking.  Congress knows how to confer such authority on 
the FCC and has done so repeatedly:  It has delegated rulemaking authority to the FCC over both specific 
provisions of the Communications Act (e.g., “[t]he Commission shall prescribe regulations to implement 
the requirements of this subsection”
52
or “the Commission shall complete all actions necessary to 
establish regulations to implement the requirements of this section”
53
), and it has done so more generally 
(e.g., “[t]he Commission[] may prescribe such rules and regulations as may be necessary in the public 
                                                     
50
Gulf Oil Corp. v. Copp Paving Co., Inc., 419 U.S. 186, 200 (1974).  See INS v. Cardoza-Fonseca, 480 U.S. 421, 
442 (1987) (“‘Few principles of statutory construction are more compelling than the proposition that Congress does 
not intend sub silentio to enact statutory language that it has earlier discarded in favor of other language.’”) (quoting 
Nachman Corp. v. Pension Benefit Guaranty Corp., 446 U.S. 359, 392-93 (1980) (Stewart, J., dissenting)); 
International Broth. of Elec. Workers v. NLRB, 814 F.2d 697, 711 (D.C. Cir. 1987) (“Congress, however, decided 
against the modification of section 9 proposed by Senator Taft. This fact alone, we believe, ‘strongly militates 
against a judgment that Congress intended a result that it expressly declined to enact.’”) (quoting Gulf Oil Corp., 
419 U.S. at 200).  
51
Order at para. 152.  
52
Communications Act of 1934, as amended, § 227(b)(2).
53
Communications Act of 1934, as amended, § 251(d)(1).
10
interest to carry out the provisions of th[e Communications] Act”
54
).  Congress did not do either in section 
706.
For another, neither subsection expressly authorizes the FCC to prescribe or proscribe the 
conduct of any party.  Again, Congress knows how to empower the Commission to prescribe conduct 
(e.g., “the Commission is authorized and empowered to determine and prescribe what will be the just and 
reasonable charge”
55
) and to proscribe conduct (e.g., “the Commission is authorized and empowered . . . 
to make an order  that the carrier or carriers shall cease and desist”
56
).  And again, Congress has 
repeatedly empowered the FCC to direct the conduct of particular parties (e.g., “[t]he Commission may at 
any time require any such carrier to file with the Commission an inventory of all or of any part of the 
property owned or used by said carrier,”
57
or “the Commission shall have the power to require by 
subpoena the attendance and testimony of witnesses”
58
).  Congress did not do any of this in section 706.
For yet another, neither subsection expressly authorizes the FCC to enforce compliance by 
ordering payment for noncompliance.  Where Congress has authorized the Commission to impose 
liability it has always done so clearly:  For forfeitures, the Communications Act directs that “[a]ny person 
who is determined by the Commission . . . shall be liable to the United States for a forfeiture penalty”
59
and “[t]he amount of such forfeiture penalty shall be assessed by the Commission . . . by written notice.”
60
  
And for other liabilities, the Communications Act directs that “the Commission shall make an order 
directing the carrier to pay to the complainant the sum to which he is entitled.”
61
The lack of express authority to issue rules, order conduct, or enforce compliance should be 
unsurprising, however, since section 706’s subsections lay out precisely how Congress expected the FCC 
to “encourage . . . deployment” and “take action”:  Congress expected the FCC to use the authority it had 
given the agency elsewhere.  The FCC already had the authority to adopt “price cap regulation” since it 
had started converting carriers from rate-of-return regulation to price-cap regulation in the early 1990s.
62
  
The Telecommunications Act established the FCC’s “regulatory forbearance” authority.
63
  The 
Telecommunications Act also authorized the FCC to “remove barriers to infrastructure investment,” 
                                                     
54
Communications Act of 1934, as amended, § 201(b) (“The Commissioner [sic] may prescribe such rules and 
regulations as may be necessary in the public interest to carry out the provisions of this Act.”); see also
Communications Act of 1934, as amended, § 303(r) (“Except as otherwise provided in this Act, the Commission 
from time to time, as public convenience, interest, or necessity requires shall— . . . [m]ake such rules and 
regulations and prescribe such restrictions, not inconsistent with law, as may be necessary to carry out the provisions 
of this Act . . . .”).
55
Communications Act of 1934, as amended, § 205(a).
56
Communications Act of 1934, as amended, § 205(a).
57
Communications Act of 1934, as amended, § 213(b).
58
Communications Act of 1934, as amended, § 409(e).
59
Communications Act of 1934, as amended, § 503(b)(1).
60
Communications Act of 1934, as amended, § 503(b)(2)(E).
61
Communications Act of 1934, as amended, § 209.
62
Policy and Rules Concerning Rates for Dominant Carriers, CC Docket No. 87-313, Second Report and Order, 5 
FCC Rcd 6786 (1990).
63
Communications Act of 1934, as amended, § 10 (“[T]he Commission shall forbear from applying any regulation 
or any provision of this Act to a telecommunications carrier or telecommunications service, or class of 
telecommunications carriers or telecommunications services . . . .”).
11
specifically barriers to entry created by state or local laws,
64
and instructed it to identify and eliminate
market entry barriers.
65
  And as for “promoting competition in the telecommunications market,” the 
Telecommunications Act added a whole second part to Title II of the Communications Act, titling it 
“Development of Competitive Markets.”
66
  In other words, Congress did in fact “invest[] the Commission 
with the statutory authority to carry out those acts” described in section 706
67
—it just did so through 
provisions other than section 706.
The structure of federal law confirms this reading.  Although Congress directed that many 
provisions of the Telecommunications Act be inserted into the Communications Act,
68
section 706 was 
not one of them.  Instead, it was left as a freestanding provision of federal law.
69
  As such, the provisions 
of the Communications Act that grant rulemaking authority “under this Act” (like section 201(b)), that 
grant prescription-and-proscription authority “[f]or purposes of this Act” (like section 409(e)), and that 
grant enforcement authority for violations of “this Act” (like section 503) simply do not apply to section 
706 of the Telecommunications Act.  Indeed, the so-called subject-matter jurisdiction of the FCC under 
section 2 applies, by its own terms, only to “provisions of this Act”
70
—and so the “most important[]” 
limit the D.C. Circuit in Verizon thought applied to section 706 does not in fact exist.
71
  In other words, 
the statutory superstructure that normally undergirds Commission action just does not exist for section 
706 of the Telecommunications Act.
What is more, reading section 706 as a grant of authority outside the bounds of the 
Communications Act yields absurd results.  As the Commission recognized in the Advanced Services 
Order with respect to “regulatory forbearance,” reading section 706 as an “independent grant of 
authority . . . would allow us to forbear from applying” certain provisions in the Act even when section 10 
would not let us do so.
72
  That same logic applies to every “regulating method” specified in section 706.  
If Congress had intended to grant the FCC almost limitless authority for “price cap regulation,” 
“removing barriers,” or “promoting competition,” what was the point of specifying limited authority in 
the Telecommunications Act’s actual amendments to the Communications Act?
73
                                                     
64
Communications Act of 1934, as amended, § 253.
65
Communications Act of 1934, as amended, § 257.
66
Communications Act of 1934, as amended, Title II, Part II, §§ 251–60.
67
Verizon v. FCC, 740 F.3d 623, 638 (D.C. Cir. 2014) (quoting Open Internet Order, 25 FCC Rcd at 17969 ¶ 120).
68
Telecommunications Act of 1996, as amended, § 1(b) (“[W]henever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered 
to be made to a section or other provision of the Communications Act of 1934 (47 U.S.C. 151 et seq.).”); see also
Telecommunications Act of 1996, as amended, § 101 (“Establishment of Part II of Title II. (a) Amendment.—Title 
II is amended by inserting after section 229 (47 U.S.C. 229) the following new part: . . . .”).  Notably, all of the 
provisions at issue in AT&T v. Iowa Utils. Bd. were in fact inserted into the Communications Act, and thus the Court 
could plausibly claim that “Congress expressly directed that the 1996 Act . . . be inserted into the Communications 
Act.”  525 U.S. 366, 377 (1999).
69
For other examples, see Telecommunications Act of 1996, as amended, §§ 202(h), 704(c).
70
Communications Act of 1934, as amended, § 2(a).
71
Verizon v. FCC, 740 F.3d 623, 640 (D.C. Cir. 2014).
72
Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket No. 98-147, 
Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13 FCC Rcd 24012, 24046, para. 73 (1998) 
(Advanced Services Order).
73
The Verizon court asked the wrong question when it noted that it “might well hesitate to conclude that Congress 
intended to grant the Commission substantive authority in section 706(a) if that authority would have no limiting 
(continued…)
12
Lastly, the history of section 706 confirms its hortatory nature.  For years after 1998’s Advanced 
Services Order, the Commission consistently interpreted the section to direct the agency to “use, among 
other authority, our forbearance authority under section 10(a) to encourage the deployment of advanced 
services.”
74
  And so the Commission has consulted section 706 in resolving one forbearance petition
75
after another
76
after another.
77
  And the Commission has looked to section 706 when employing its 
authorities under the Communications Act to promote local competition
78
and to remove barriers to 
infrastructure investment (such as the Commission’s authority over pole attachments).
79
  In other words, 
our own history shows that we can meet section 706’s goals without relying on it as an independent grant 
of authority.
And the actual legislative history clinches the point.  Recall that the Verizon court looked to the 
Senate Report’s description of section 706 as a “necessary fail-safe to ensure that the bill achieves its 
intended infrastructure objective.”
80
  That was a mistake because the provision described in the Senate 
Report was not the section 706 that Congress enacted.  As reviewed above, when the Senate passed in 
1995 the bill that became the Telecommunications Act of 1996, that legislation contained a precursor to 
section 706(b) that authorized the FCC to “preempt State commissions that fail to act to ensure [the] 
availability [of advanced telecommunications capability to all Americans].”
81
  In other words, the Senate 
(Continued from previous page)                                                           
principle.”  Verizon, 740 F.3d at 639.  But the question is not whether section 706 of the Telecommunications Act 
contains some “intelligible principle” and thus does not violate the non-delegation doctrine, see Whitman v. 
American Trucking Associations, 531 U.S. 457, 472 (2001).  Instead, the question is one of congressional intent:  
Did Congress really intend to put specific limits on the Commission’s forbearance authority in one place (section 10 
of the Communications Act) only to largely eliminate them in another (section 706 of the Telecommunications 
Act)?  Such an interpretation doesn’t make sense.
74
Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket No. 98-147, 
Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13 FCC Rcd 24012, 24047, para. 77 (1998) 
(Advanced Services Order).
75
Petition of Qwest Corporation for Forbearance Pursuant to 47 U.S.C. § 160(c) in the Omaha Metropolitan 
Statistical Area, WC Docket No. 04-223, Memorandum Opinion and Order, 20 FCC Rcd 19415, 19469, para. 107 
(2005), aff’d by Qwest Corp. v. FCC, 482 F.3d 471 (D.C. Cir. 2007).
76
Petition of ACS of Anchorage, WC Docket No. 06-109, Memorandum Opinion and Order, 22 FCC Rcd 16304, 
16356, para. 118 (2007).
77
Petition of the Embarq Local Operating Companies For Forbearance et al., WC Docket No. 06-147, 
Memorandum Opinion and Order, 22 FCC Rcd 19478, 19503–04, para. 46 (2007), aff’d by Ad Hoc 
Telecommunications Users Committee v. FCC, 572 F.3d 903 (D.C. Cir. 2009).
78
Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, CC Docket No. 96-
98, Third Report and Order and Fourth Further Notice of Proposed Rulemaking, 15 FCC Rcd 3696, 3840, para. 317 
(1999) (“Our overriding objective, consistent with the congressional directive in section 706, is to ensure that 
advanced services are deployed on a timely basis to all Americans so that consumers across America have the full 
benefits of the ‘Information Age.’”); Vonage Holdings Corporation Petition for Declaratory Ruling Concerning an 
Order of the Minnesota Public Utilities Commission, WC Docket No. 03-211, Memorandum Opinion and Order, 19 
FCC Rcd 22404, 22426–27, paras. 36–37 (2004).
79
Implementation of Section 224 of the Act; A National Broadband Plan for Our Future, WC Docket No. 07-245, 
GN Docket No. 09-51, Report and Order and Order on Reconsideration, 26 FCC Rcd 5240, 5317, 5330, paras. 173, 
208 (2011); Implementation of Section 224 of the Act; Amendment of the Commission’s Rules and Policies 
Governing Pole Attachments, WC Docket No. 07-245, RM-11293, RM-11303, Notice of Proposed Rulemaking, 22 
FCC Rcd 20195, 20209, para. 36 (2007).
80
S. Rep. No. 104-23 at 50–51 (1995); see Verizon, 740 F.3d at 639.
81
See S. 652 § 304(b) (104th Cong. 1995) (contained in “Title III—An End to Regulation”).
13
version would have let the FCC step into the shoes of the state commissions and exercise their authority 
under federal law if they failed to act.  That’s a “fail-safe.”  But the enacted version contained, as the 
Conference Report dryly put it, “a modification” to that section:  This preemptory language was excised.
82
  
In other words, Congress contemplated giving the FCC fail-safe authority in section 706, but then 
expressly decided not to do so.
In short, whether one looks at the statute’s text, structure, or history, only one conclusion is 
possible:  Congress did not delegate substantive authority to the FCC in section 706 of the 
Telecommunications Act.
But even if one agrees with the D.C. Circuit’s Verizon decision to the contrary, the court’s 
reasoning bolsters the argument that section 706 does not contain the “unmistakably clear” statement
required by Gregory.  Under Chevron, an agency’s reasonable interpretation of a statute is entitled to 
deference “if the statutory language does not reveal the ‘unambiguously expressed intent of Congress.’”
83
In its Verizon brief, the Commission argued that its interpretation of section 706 was entitled to such
deference.
84
The court ultimately agreed, concluding that the Commission’s asserted authority under 
section 706 was a “reasonable interpretation of an ambiguous statute.”
85
The D.C. Circuit contended that 
“Congress ha[d] not ‘directly spoken’ to the question of whether section 706(a) is a grant of regulatory 
authority” at all
86
—much less whether it grants the Commission authority to preempt state laws. 
Accepting, for the sake of argument, the Commission’s and court’s arguments as true, I find it difficult to 
see how section 706 could be at the same time both “ambiguous” as to whether it gives the FCC any 
authority at all and “unmistakably clear” as to Congress’ intent to allow the FCC to preempt state 
restrictions on municipal broadband projects.
87
* * *
The elected representatives of the people of Tennessee and North Carolina have chosen to grant 
limited authorizations to municipalities in their respective states to offer broadband services.  Most 
notably, they have allowed municipalities to provide service only within a specified geographic area.  
Reasonable people can disagree about the wisdom of such policies.  Some believe that the conditions 
imposed by Tennessee and North Carolina are too restrictive.  Others believe that municipal governments 
shouldn’t be in the broadband business at all.  As I said earlier, I will leave that debate to others.
What is clear, however, is that the FCC does not have the legal authority to override the decisions 
made by Tennessee and North Carolina.  Under the law, it is up to the people of those two states and their 
elected representatives—not the Commission—to decide whether and to what extent to allow 
municipalities to operate broadband projects.  Today’s Order is therefore unlawful.
During the Clinton Administration, the City of Abilene asked the FCC to preempt a Texas law 
prohibiting Abilene and other Texas municipalities from entering the telecommunications business. The 
FCC described the city’s request as follows: “Abilene asked the FCC to take the extraordinary step of 
                                                     
82
S. Rep. No. 104-230 at 210 (1996).
83
Brief for Appellee/Respondents at 23, Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014) (11-1355) (citing Chevron 
USA, Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842–43 (1984)).
84
Id. at 25–30.
85
Verizon, 740 F.3d at 637.
86
Id. at 638.
87
US Telecom notes that “[i]f the underlying grant of authority in Section 706 is ‘ambiguous,’ the statute by 
definition does not contain a ‘plain statement’ of Congressional intent.” Comments of US Telecom at 15, WCB 
Docket No. 14-115 (filed Aug. 29, 2014). 
14
preempting a State’s sovereign power to regulate its own municipalities.”
88
  In 1997, the Commission 
stayed within its legal bounds and refused to take that “extraordinary step.”  Unfortunately, the agency 
does not exhibit the same restraint today.
This decision violates the constitutional principles that lie at the heart of our system of 
government.  The FCC is treating Tennessee and North Carolina as mere appendages of the federal 
government rather than the separate sovereigns that they are.  For all of these reasons, I dissent.  
                                                     
88
Brief for Respondents at 11, City of Abilene v. FCC, 164 F.3d 49 (D.C. Cir. 1999) (97-1633, 97-1634).