Consistently Inconsistent: How Very Large ICT Ventures Cannot Maintain a Consistent Legal/Regulatory Posture

            Technological and marketplace convergence makes it increasingly difficult for large, integrated firms, like AT&T, to maintain a single, consistent position on legal and regulatory issues.  This results in rich, irony. 

            Consider AT&T’s recent Kentucky law suit to prevent Google Fiber from using federal pole attachment law to secure access to AT&T-owned telephone poles, at relatively attractive rates, using a congressionally created formula.  See, e.g., http://www.bizjournals.com/louisville/news/2016/05/25/where-at-ts-lawsuit-against-the-citystands.html. 

            This litigation reeks of irony, because AT&T, in its capacity as an Internet Service Provider, would qualify under federal law to attach lines to poles owned by electric, telephone and cable television companies.  Federal pole attachment law prevents companies from refusing to provide pole access, or to allow access, but only at extortionate rates.  AT&T surely would benefit in cities where it does not own telephone poles and needs to install lines using the poles of another, potentially competing company.  But of course AT&T does not make it a practice of trying to compete in localities where it does not also happen to owe telephone poles.

            Adding to the irony—make that disingenuousness and other D words—is AT&T’s consistent legal and regulatory position on state and municipal laws and ordinances affecting access to cellphone towers.  When it comes to that technology, which AT&T considers a functional equivalent and competing option, the company vigorously asserts that federal law preempts state and municipal laws.

            Clearly both wireline and wireless access to the Internet qualifies as interstate telecommunications.  A long body of case precedent supports a “contamination” standard that favors federal preemption, and in turn FCC jurisdiction, whenever a line carriers both interstate and intrastate traffic that cannot be separated.  AT&T regularly seeks federal preemption of state and municipal laws that impose any sort of cost, delay, environmental impact assessment, etc. Federal preemption renders the state and municipal law invalid and inapplicable. 

             The FCC recently failed to convince an appellate federal court that the Commission should be able to preempt any and all state laws that limit or prohibit municipalities from offering Wi-Fi service. See http://docs.techfreedom.org/Tennessee_v_FCC.pdf.

This means there are some instances where federalism prevails, i.e., the national legislature did not clearly and unconditionally prevent states from enacting laws and some argument can be made that the law does not affect interstate commerce.  But when it comes to still lawful state and municipal laws affecting tower locations, etc. AT&T speaks clearly and unconditionally: that federal law severely restricts what states and municipalities can do, despite the intense local nature of tower siting issues.

            Ironically, AT&T’s absolute certainty that federal law trumps states and cities in terms of wireless Internet access, does not extend to functionally equivalent wireline Internet access.  This has nothing to do with respecting the “Rule of Law” and everything to do with stifling Goggle and the innovation and price competition it would offer. 

             The same conclusion applies to those incumbent carriers opposing municipal Wi-Fi networks and coverage expansion.  These carriers invoke law to short-circuit competition, but in other forums invoke the same laws, policies and precedent to justify their lawful right to ignore state and municipal law.  Consider this strategy rent seeking and not some lofty respect for the Constitution.