The Case for Local Control in Internet Regulation

Font Size:

Scholars advocate an expansive role for local decision-making in internet governance.

Font Size:

In late February, a federal court allowed California’s network neutrality law to take effect. State lawmakers had passed the law to revive “net neutrality” policy—which prevents unreasonable discrimination by providers of internet content—after the Federal Communications Commission (FCC) repealed nationwide neutrality rules.

At the state level, experts anticipate lawmakers to respond to the court’s ruling by enacting laws of their own, even as the Biden Administration reportedly seeks to restore the federal rules of net neutrality.

Professors Tejas N. Narechania and Erik Stallman of the University of California, Berkeley School of Law welcome local engagement on internet regulation in a recent paper. They advocate a role for local control in net neutrality, universal access, and municipal broadband. Narechania and Stallman contend that local authorities have enhanced competence and legitimacy in regulating aspects of the internet. Such advantages, they say, arise from the local nature of internet infrastructure and a long track-record on similar communications issues.

Contributing to the debate over net neutrality, Narechania and Stallman highlight the importance of local expertise and knowledge of access networks, which contain the wires and other infrastructure that deliver internet service consumers’ computers and other devices.

Narechania and Stallman explain that risks of carriers throttling internet traffic—either by slowing or prioritizing certain content—are highest in access networks, which are closest to consumers. In access networks, carriers can block or allow traffic at will, due to their complete control over the physical delivery infrastructure.

Narechania and Stallman argue that, without net neutrality rules, the control of carriers over access networks can create harm by reducing the competition over and deployment of infrastructure. Where a carrier possesses a monopoly over a local access network, it can leverage its position to prioritize specific content—say a particular streaming service. That prioritization reduces consumer choice and could lead to lower demand for broadband access, thereby slowing deployment of network infrastructure.

According to Narechania and Stallman, local authorities are well-positioned to prevent these harms by their proximity to local access networks and their understanding of local competition dynamics.

Narechania and Stallman also point to key precedents for state and local action on competition issues. Where local broadband carriers are treated as state utilities, local officials have regulated competition by approving mergers between local providers. In addition, the 1996 Telecommunications Act grants special rate-setting power for local entities when local markets have insufficient competition.

Narechania and Stallman advocate greater local control beyond just net neutrality. Another pressing issue in internet regulation is that of ensuring universal access to broadband.

The current regulatory scheme for universal access creates cooperation between federal and state officials under the Telecommunications Act. Universal access initiatives are funded by special taxes on telecom carriers, which are placed in universal service funds. Federal authorities decide how funds may be used, and states serve as the gatekeeper for who can receive funds.

Narechania and Stallman approve of this role for state and local authorities, as these governments are well positioned to evaluate a carrier’s eligibility to provide service. Local authorities have relevant knowledge about actual service coverage and are accountable to the consumers impacted by service gaps.

Currently, the distribution of responsibilities under telecommunications law is imperfect, argue Narechania and Stallman. The federal government determines which areas are underserved, but Narechania and Stallman support placing this responsibility more locally. They argue that federal maps often contain errors, and state and local regulators can develop more reliable local indicators of coverage and accessibility.

Narechania and Stallman also argue that, in addition to the expanded role for local control in net neutrality and universal access, local decision-making should do more to govern access to municipal broadband. They critique decisions that allow states to prevent local governments from establishing municipal broadband providers. In 2015, for example, the FCC issued an order seeking to override state limits on municipally owned broadband networks. The Sixth Circuit struck down this order.

The circuit court’s decision relied on a detailed interpretation of the Telecommunications Act, but Narechania and Stallman reason that this court decision can result in the wrong policy outcome if states use their authority to take away local decision-making power. Narechania and Stallman argue that decision-making power should remain local, reasoning that “because municipalities internalize the costs and benefits of deploying broadband networks, it makes sense to grant them the autonomy to determine whether and how to deploy such networks.”

Although states still have the legal power to preempt local participation in communications efforts, Narechania and Stallman contend they should “take care” in wielding this power.

Narechania and Stallman point to the recent case of a particular municipal broadband network in Tennessee that state lawmakers tried to impede. During the COVID-19 pandemic, the municipal network had the flexibility to respond by providing free broadband access to local children who qualified for other forms of assistance—a prime example showing the importance of local involvement in provision and regulation of the internet.