The Principle of Reverse Preemption

When our federal government approved the 1996 Telecommunications Act it approved that portion of the Act that gave states the right to elect to regulate intrastate telecommunications themselves, so long as those regulations were within the spirit and letter of the Act. This is called “reverse preemption” because the states can preempt the federal government rather than the other way around. (This is not novel. Our water rights have the same structure, wherein states have sovereign power over the federal government.) Twenty states so elected, including Connecticut.

The exact operations of reverse preemption vary with the issue involved. For example, the 1996 Act requires a combined federal-state board to decide the distribution of universal service fees attached to every telephone bill, which fees support the Connect America fund designed to augment rural telecommunications. Such a committee clearly blurs the distinction. There is also a joint federal-state board designed to administer section 706 of the Act relative to equitable access to broadband services. And states now must oblige the federal sense of “light touch” regulations for broadband services to maximize investment and competition in that area of communications. This last issue rides on the central question of what constitutes “intrastate” versus “interstate” telecommunications, and how one in the end distinguishes “broadband” from “telecommunications,” distinctions the 1996 Act and subsequent FCC and court rulings have don’t little to clarify and much to confuse.

However, pole attachment generally walks under the banner of reverse preemption (poles themselves are clearly “intrastate”) even for broadband (which of course almost always operates over a telecommunications network from a telephone company or cable tv company). The FCC made this explicit in its 2018 ruling that returned broadband to light touch regulation after two years under full telecommunications regulation. So the FCC’s ruling on pole attachment only applies to the 30 states that did not opt in for reverse preemption.

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