In an effort to develop competitive markets for telecommunications, Congress enacted into law a statute to remove barriers to entry, containing the following language:

47 USC §253: “No state or local statute or regulation, or other state or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.”
(Emphasis added.)

This language would seem to make it clear that local governments have the right to be in the telecommunications business. However, there is disagreement over the question of whether “any entity”, as used here includes local governments. That issue is pending before the Federal Communications Commission upon a petition from Missouri. A decision on that petition should be forthcoming, but may be challenged in court.