What’s the definition of “any?”

Two years ago I had an dream. It was laced with those two favorite “disruptive” technologies, voice-over-IP and Wi-Fi (a.k.a. 802.XXX  wireless LANs). It was inspired after several towns in my area had their school budgets defeated based on the promise of higher property taxes.  

“So, how do municipalities raise revenues for schools when raising property taxes becomes infeasible?” is the question of the day across the U.S. And how do school districts insure universal access to broadband services for their students?  This is not trivial given that Montvale, NJ is considering providing all of its high school students laptop computers for free next year--a development that already has retirees and those on fixed incomes in that town howling.

But, I digress. Back to the dream. Why not turn school buildings, already connected to the Internet via fiber optics, into local super points-of-presence hubs for a low-cost, meshed wireless/fiber broadband network that could be used for VoIP as well as data? Toss in other municipal buildings for good measure since they’re fibered, too. In fact, why not go regional? Charge a reasonable fee for service and outsource operation of the network to the local telco or cable company instead of creating a municipal bureaucracy. Communities get something of benefit in two ways: a.) ubiquitous broadband to every home and b.) a revenue stream not tied to property or sales taxes.

What is wrong with this? According to the U.S. Supreme Court on March 24, maybe everything. Or maybe not. 

In an 8-1 vote, the Court stated that the FCC correctly determined a Missouri law preventing local municipalities from providing telecom services should not be pre-empted by the FCC, a real reversal of fortune given the FCC’s track record for being overturned. The message from the FCC, service providers and now the Supreme Court was that despite what the Telecom Act of 1996 says about “any” one competing,  whether you actually can is subject to interpretation. For the moment, municipalities can’t. Municipalities--especially those in rural areas where the same companies tend to own the telco, cable company and dominant wireless service--were not pleased.

I rarely do this, especially since I am not a lawyer and find legalese painful, but the Court’s majority opinion reminded me of  “It depends on what the definition of is, is.” Thus, please indulge me in these delicious excerpts from page 1, Nixon, Attorney General of Missouri v. Missouri Municipal League et al. certiorari to the united states court of appeals for the eighth circuit No. 02-1238. Argued January 12, 2004--Decided March 24, 2004 ^*

Held: The class of entities contemplated by §253 does not include the State's own subdivisions, so as to affect the power of States and localities to restrict their own (or their political inferiors') delivery of telecommunications services. Pp. 4-14.

     (a) Two considerations fall short of supporting the municipal respondents. First, they argue that fencing governmental entities out of the telecommunications business flouts the public interest in promoting competition. It does not follow, however, that preempting state or local barriers to governmental entry into the market would be an effective way to draw municipalities into the business, and in any event the issue here does not turn on the merits of municipal telecommunications services. Second, concentrating on the undefined statutory phrase "any entity" does not produce a persuasive answer here. While an "entity" can be either public or private, there is no convention of omitting the modifiers "public and private" when both are meant to be covered. Nor is coverage of public entities reliably signaled by speaking of "any" entity; "any" can and does mean different things depending upon the setting. To get at Congress's understanding requires a broader frame of reference, and in this litigation it helps to ask how Congress could have envisioned the preemption clause actually working if the FCC applied it at the municipal respondents' urging. See, e.g., New Jersey Realty Title Ins. Co. v. Division of Tax Appeals of N.J., 338 U. S. 665, 673. The strange and indeterminate results of using federal preemption to free public entities from state or local limitations is the key to understanding that Congress used "any entity" with a limited reference to any private entity. Pp. 4-6.

     (b) The municipal respondents' position holds sufficient promise of futility and uncertainty to keep this Court from accepting it. Pp. 6-13.

I have a new dream. I hope some day to be able to utter, in proper context, the words “The position holds sufficient promise of futility and uncertainty to keep this (______) from accepting it.” You have to love the language of the Court.  

Without going into the merits of the arguments made, especially since the Justices were near-unanimous in their decision--which was obviously based on legal and not economic issues--what us common folk need to understand is that the decision merely applies to municipalities offering traditional telecommunications services. There is the rub. 

Since the industry wants broadband services to be considered information services instead of basic telecommunications services, the reality is my dream could still come true. A municipality could offer my broadband vision as an information service, with a little VoIP on the side. Indeed, it is this very prospect that has the FCC on the horns of a dilemma. Does it regulate VoIP? If so, whose service and how? And domestic municipalities are only one source of potential problems. What about getting “infotone” from a feature server from the City of Bangalore, India?      

Personally, I think that if municipalities wish to fatten their coffers by offering competitive broadband communications services at popular prices and to assist in the provisioning of broadband universal service, let the Congress clarify that when they say “any” entity can compete, they truly mean “any.” Citizens have a nice option to cause these entities to cease and desist if they mess up. It is called the voting machine. I also seem to remember that despite all of the “let the industry be the ones to compete…keep government out it!” sentiments, the Tennessee Valley Authority has done a pretty good job of providing rural areas of the south with both flood control and inexpensive energy.  Other public authorities in other realms have done equally reasonable jobs in providing things for the public good like bridges and tunnels, airports, etc. Admittedly, these are things where franchised utility service providers were not present and/or “competing,” but that only makes the point more poignant.

As the policy makers grapple with VoIP, this is all going to become very interesting.  As the old political axiom states, “Where one stands depends on where one sat.”  What’s wrong with a little friendly competition “any” way?

Peter Bernstein is President of Infonautics Consulting Inc. He can be reached at pb111451@optonline.net.