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Nixon v. Mo. Mun. League - 541 U.S. 125, 124 S. Ct. 1555 (2004)

Rule:

Section 101(a) (110 Stat. 70, 47 U.S.C.S. § 253) of the Telecommunications Act of 1996 authorizes preemption of state and local laws and regulations expressly or effectively prohibiting the ability of any entity to provide telecommunications services. The class of entities does not include the State's own subdivisions. 

Facts:

After Missouri enacted a statute forbidding its "political subdivision[s to] provide or offer for sale . . . a telecommunications service or . . . facility," the municipal respondents, including municipally owned utilities, petitioned the Federal Communications Commission (FCC) for an order declaring the statute unlawful under 47 U.S.C.S. § 253, which authorizes preemption of state and local laws and regulations "that prohibit or have the effect of prohibiting the ability of any entity" to provide telecommunications services. Relying on its earlier order resolving a challenge to a comparable Texas law and the affirming opinion of the District of Columbia Circuit, the FCC refused to declare the Missouri statute preempted, concluding that "any entity" in § 253(a) does not include state political subdivisions, but applies only to independent entities subject to state regulation. The FCC also adverted to the principle of Gregory v. Ashcroft, 501 U.S. 452, 115 L. Ed. 2d 410, 111 S. Ct. 2395, that Congress needs to be clear before it constrains traditional state authority to order its government. The Eighth Circuit panel unanimously reversed, explaining that § 253(a)'s word "entity," especially when modified by "any," manifested sufficiently clear congressional attention to governmental entities to get past Gregory. Further appellate review was sought.

Issue:

Were the class of entities contemplated by § 253 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?

Answer:

No

Conclusion:

The United States Supreme Court determined that, under § 253, the class of entities did not include the State's own subdivisions. Congress used "any entity" with a limited reference to any private entity when it cast the preemption net. Section 253 would not work like a normal preemptive statute if it applied to a governmental unit; it would often accomplish nothing, it would treat States differently depending on the formal structures of their laws authorizing municipalities to function, and it would hold out no promise of a national consistency.

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