NIXON, ATTORNEY GENERAL OF MISSOURI v. MISSOURI MUNICIPAL LEAGUE et al.

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125 OCTOBER TERM, 2003
Syllabus
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*
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, peti-
tioned the Federal Communications Commission (FCC) for an order de-
claring the statute unlawful under 47 U. S. C. § 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 telecommu-
nications 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 pre-
empted, 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, that Congress needs to be clear before it con-
strains traditional state authority to order its government. The Eighth
Circuit panel unanimously reversed, explaining that § 253(a)’s word “en-
tity,” especially when modified by “any,” manifested sufficiently clear
congressional attention to governmental entities to get past Gregory.
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 locali-
ties to restrict their own (or their political inferiors’) delivery of telecom-
munications services. Pp. 131–141.
(a) Two considerations fall short of supporting the municipal respond-
ents. First, they argue that fencing governmental entities out of the
telecommunications business flouts the public interest in promoting com-
petition. 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 serv-
*Together with No. 02–1386, Federal Communications Commission
et al. v. Missouri Municipal League et al., and No. 02–1405, Southwestern
Bell Telephone, L. P., fka Southwestern Bell Telephone Co. v. Missouri
Municipal League et al., also on certiorari to the same court.

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126 NIXON v. MISSOURI MUNICIPAL LEAGUE
Syllabus
ices. Second, concentrating on the undefined statutory phrase “any en-
tity” does not produce a persuasive answer here. While an “entity” can
be either public or private, there is no convention of omitting the mod-
ifiers “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 refer-
ence, and in this litigation it helps to ask how Congress could have envi-
sioned 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. 131–133.
(b) The municipal respondents’ position holds sufficient promise of fu-
tility and uncertainty to keep this Court from accepting it. Pp. 133–141.
(1) In familiar instances of regulatory preemption under the Su-
premacy Clause, a federal measure preempting state regulation of eco-
nomic conduct by a private party simply leaves that party free to do
anything it chooses consistent with the prevailing federal law. See,
e. g., Lorillard Tobacco Co. v. Reilly, 533 U. S. 525, 540–553. But no
such simple result would follow from federal preemption meant to un-
shackle local governments from entrepreneurial limitations. Such a
government’s capacity to enter an economic market turns not only on
the effect of straightforward economic regulation below the national
level (including outright bans), but on the authority and potential will
of state or local governments to support entry into the market. Pre-
empting a ban on government utilities would not accomplish much if the
government could not point to some law authorizing it to run a utility
in the first place. And preemption would make no difference to anyone
if the state regulator were left with control over funding needed for any
utility operation and declined to pay for it. In other words, when a
government regulates itself (or the subdivision through which it acts)
there is no clear distinction between the regulator and the entity reg-
ulated. Legal limits on what the government itself (including its sub-
divisions) may do will often be indistinguishable from choices that
express what the government wishes to do with the authority and re-
sources it can command. Thus, preempting state or local governmental
self-regulation (or regulation of political inferiors) would work so differ-
ently from preempting regulation of private players that it is highly
unlikely that Congress intended to set off on such uncertain adven-
tures. Pp. 133–134.

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(2) Several hypothetical examples illustrate the implausibility of
the municipal respondents’ reading that Congress intended § 253 to pre-
empt state or local governmental self-regulation. Whether a law pro-
hibiting an entity’s “ability” to provide telecommunications under § 253
means denying the entity a capacity or authority to act in the first place,
or whether it means limiting or cutting back on some preexisting au-
thority to go into the telecommunications business (under a different
law), the hypotheticals demonstrate that § 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 de-
pending on the formal structures of their laws authorizing municipalities
to function, and it would hold out no promise of a national consistency.
That Congress meant § 253 to start down such a road in the absence of
any clearer signal than the phrase “ability of any entity” is farfetched.
See, e. g., United States v. American Trucking Assns., Inc., 310 U. S.
534, 543. Pp. 134–138.
(3) The practical implication of the dissent’s reading of § 253 to for-
bid States to withdraw municipalities’ preexisting authority expressly
to enter the telecommunications business, but not withdrawals of au-
thority that are competitively neutral in the sense of being couched in
general terms that do not expressly target telecommunications, is to
read out of § 253 the words “or has the effect of prohibiting.” Those
words signal Congress’s willingness to preempt laws that produce the
unwanted effect, even if they do not advertise their prohibitory agenda
on their faces. The dissent’s reading therefore disregards § 253’s plain
language and entails a policy consequence that Congress could not possi-
bly have intended. Pp. 138–140.
(c) A complementary principle would bring the Court to the same
conclusion even on the assumption that preemption might operate
straightforwardly to provide local choice. Section 253(a) is hardly
forthright enough to pass Gregory: “ability of any entity” is not limited
to one reading, and neither statutory structure nor legislative history
points unequivocally to a commitment by Congress to treat governmen-
tal telecommunications providers on par with private firms. The want
of any “unmistakably clear” statement to that effect, 501 U. S., at 460,
would be fatal to respondents’ reading. Pp. 140–141.
299 F. 3d 949, reversed.
Souter, J., delivered the opinion of the Court, in which Rehnquist,
C. J., and O’Connor, Kennedy, Ginsburg, and Breyer, JJ., joined.
Scalia, J., filed an opinion concurring in the judgment, in which Thomas,
J., joined, post, p. 141. Stevens, J., filed a dissenting opinion, post, p. 142.

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128 NIXON v. MISSOURI MUNICIPAL LEAGUE
Opinion of the Court
Ronald Molteni, Assistant Attorney General of Missouri,
argued the cause for petitioner in No. 02–1238. With him
on the briefs were Jeremiah W. (Jay) Nixon, Attorney Gen-
eral, pro se, and James R. Layton, State Solicitor. James
A. Feldman argued the cause for the federal petitioners in
No. 02–1386. With him on the briefs were Solicitor General
Olson, Assistant Attorney General Pate, Deputy Solicitor
General Hungar, Catherine G. O’Sullivan, Andrea Lim-
mer, John A. Rogovin, and Richard K. Welch. Michael
K. Kellogg, Geoffrey M. Klineberg, and Sean A. Lev filed
briefs for Southwestern Bell Telephone, L. P., petitioner in
No. 02–1405.
David A. Strauss argued the cause for Missouri Municipal
League et al., respondents in all cases. With him on the
brief were James Baller and Richard B. Geltman.†
Justice Souter delivered the opinion of the Court.
Section 101(a) of the Telecommunications Act of 1996, 110
Stat. 70, 47 U. S. C. § 253, authorizes preemption of state and
local laws and regulations expressly or effectively “prohibit-
ing the ability of any entity” to provide telecommunications
services. The question is whether the class of entities in-
†A brief of amici curiae urging reversal was filed for the United States
Telecom Association et al. by Andrew G. McBride, Helgi C. Walker, Mi-
chael E. Glover, Edward H. Shakin, Michael T. McMenamin, Carrick B.
Inabnett, Marc Gary, and Dorian S. Denburg.
Briefs of amici curiae urging affirmance were filed for Congressman
Rick Boucher, for the town of Abingdon, Virginia, et al., and for Educause
by Steven R. Minor; for the City of Abilene, Texas, et al. by Steven A.
Porter; for the Consumer Federation of America by James N. Horwood
and Scott H. Strauss; for the High Tech Broadband Coalition et al. by
Deborah Brand Baum; for Knology, Inc., by David O. Stewart and Thomas
B. Smith; for Lincoln Electric System by Scott Gregory Knudson, Doug-
las L. Curry, and William F. Austin; and for the United Telecom Council
by Jill M. Lyon and Brett Kilbourne.
Briefs of amici curiae were filed for the International Municipal Law-
yers Association et al. by Henry W. Underhill, Jr.; and for Sprint Corp.
by David P. Murray and John G. Short.

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cludes 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 such services. We hold it does not.
I
In 1997, the General Assembly of Missouri enacted the
statute codified as § 392.410(7) of the State’s Revised
Statutes:
“No political subdivision of this state shall provide or
offer for sale, either to the public or to a telecommunica-
tions provider, a telecommunications service or telecom-
munications facility used to provide a telecommunica-
tions service for which a certificate of service authority
is required pursuant to this section.” 1
On July 8, 1998, the municipal respondents, including mu-
nicipalities, municipal organizations, and municipally owned
utilities, petitioned the Federal Communications Commission
(FCC or Commission) for an order declaring the state stat-
ute unlawful and preempted under 47 U. S. C. § 253:
“No State or local statute or regulation, or other State
or local legal requirement, may prohibit or have the ef-
fect of prohibiting the ability of any entity to provide
any interstate or intrastate telecommunications serv-
ice.” § 253(a).
“If, after notice and an opportunity for public comment,
the Commission determines that a State or local govern-
ment has permitted or imposed any statute, regulation,
or legal requirement that violates subsection (a) or (b) of
this section, the Commission shall preempt the enforce-
ment of such statute, regulation, or legal requirement to
1 The provision is subject to some exceptions not pertinent here, and as
originally enacted the law was set to expire in 2002. The assembly later
pushed the expiration date ahead to 2007. Mo. Rev. Stat. § 392.410(7)
(Supp. 2003).

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the extent necessary to correct such violation or incon-
sistency.” § 253(d).
After notice and comment, the FCC refused to declare the
Missouri statute preempted, In re Missouri Municipal
League, 16 FCC Rcd. 1157 (2001), relying on its own earlier
order resolving a challenge to a comparable Texas law, In re
Public Utility Comm’n of Texas, 13 FCC Rcd. 3460 (1997),
as well as the affirming opinion of the United States Court
of Appeals for the District of Columbia Circuit, Abilene v.
FCC, 164 F. 3d 49 (1999). The agency concluded that “the
term ‘any entity’ in section 253(a) . . . was not intended to
include political subdivisions of the state, but rather appears
to prohibit restrictions on market entry that apply to in-
dependent entities subject to state regulation.” 2 16 FCC
Rcd., at 1162. Like the District of Columbia Circuit in Abi-
lene, the FCC also adverted to the principle of Gregory v.
Ashcroft, 501 U. S. 452 (1991), that Congress needs to be
clear before it constrains traditional state authority to order
its government. 16 FCC Rcd., at 1169. But at the same
time the Commission rejected preemption, it also denounced
the policy behind the Missouri statute, id., at 1162–1163, and
the Commission’s order carried two appended statements
(one by Chairman William E. Kennard and Commissioner
Gloria Tristani, id., at 1172, and one by Commissioner Susan
Ness, id., at 1173) to the effect that barring municipalities
2 The line between “political subdivision” and “independent entity” the
FCC located by reference to state law. By its terms, the FCC order
declined to preempt the statute as it applied to municipally owned utilities
not chartered as independent corporations, on the theory that under con-
trolling Missouri law, they were subdivisions of the State. 16 FCC Rcd.,
at 1158. The Commission implied an opposite view, however, regarding
the status, under § 253, of municipal utilities that had been separately char-
tered. Ibid. The question whether § 253 preempts state and municipal
regulation of these types of entities is not before us, and we express no
view as to its proper resolution.

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from providing telecommunications substantially disserved
the policy behind the Telecommunications Act.
The municipal respondents appealed to the Eighth Circuit,
where a panel unanimously reversed the agency disposition,
299 F. 3d 949 (2002), with the explanation that the plain-
vanilla “entity,” especially when modified by “any,” mani-
fested sufficiently clear congressional attention to govern-
mental entities to get past Gregory. 299 F. 3d, at 953–955.
The decision put the Eighth Circuit at odds with the District
of Columbia Circuit’s Abilene opinion, and we granted cer-
tiorari to resolve the conflict. 539 U. S. 941 (2003). We
now reverse.
II
At the outset, it is well to put aside two considerations
that appear in this litigation but fall short of supporting the
municipal respondents’ hopes for prevailing on their gener-
ous conception of preemption under § 253. The first is pub-
lic policy, on which the respondents have at the least a re-
spectable position, that fencing governmental entities out of
the telecommunications business flouts the public interest.
There are, of course, arguments on the other side, against
government participation: in a business substantially reg-
ulated at the state level, regulation can turn into a public
provider’s weapon against private competitors, see, e. g.,
Brief for Petitioner Southwestern Bell Telephone, L. P., in
No. 02–1405 et al., pp. 17–18; and (if things turn out bad)
government utilities that fail leave the taxpayers with the
bills. Still, the Chairman of the FCC and Commissioner
Tristani minced no words in saying that participation of mu-
nicipally owned entities in the telecommunications business
would “further the goal of the 1996 Act to bring the benefits
of competition to all Americans, particularly those who live
in small or rural communities in which municipally-owned
utilities have great competitive potential.” 16 FCC Rcd., at
1172. Commissioner Ness said much the same, and a num-
ber of amicus briefs in this litigation argue the competitive

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advantages of letting municipalities furnish telecommunica-
tions services, drawing on the role of government operators
in extending the electric power lines early in the last cen-
tury. Brief for City of Abilene, Texas, et al. as Amici Cu-
riae 14–18; Brief for Consumer Federation of America as
Amicus Curiae 7. As we will try to explain, however,
infra, at 133–138, it does not follow 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.
The second consideration that fails to answer the question
posed in this litigation is the portion of the text that has
received great emphasis. The Eighth Circuit trained its
analysis on the words “any entity,” left undefined by the stat-
ute, with much weight being placed on the modifier “any.”
But concentration on the writing on the page does not
produce a persuasive answer here. While an “entity” can be
either public or private, compare, e. g., 42 U. S. C. § 9604(k)(1)
(2000 ed., Supp. I) (defining “eligible entity” as a state
or local government body or its agent) with 26 U. S. C.
§ 269B(c)(1) (defining “entity” as “any corporation, partner-
ship, trust, association, estate, or other form of carrying on
a business or activity”), there is no convention of omitting
the modifiers “public and private” when both are meant to
be covered. See, e. g., 42 U. S. C. § 2000d–7(a)(2) (exposing
States to remedies in antidiscrimination suits comparable to
those available “against any public or private entity other
than a State”). Nor is coverage of public entities reliably
signaled by speaking of “any” entity; “any” can and does
mean different things depending upon the setting. Com-
pare, e. g., United States v. Gonzales, 520 U. S. 1, 5 (1997)
(suggesting an expansive meaning of the term “ ‘any other
term of imprisonment’ ” to include state as well as federal
sentences), with Raygor v. Regents of Univ. of Minn., 534
U. S. 533, 542–546 (2002) (implying a narrow interpretation

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of the phrase “ ‘any claim asserted’ ” so as to exclude certain
claims dismissed on Eleventh Amendment grounds). To get
at Congress’s understanding, what is needed is a broader
frame of reference, and in this litigation it helps if we ask
how Congress could have envisioned the preemption clause
actually working if the FCC applied it at the municipal re-
spondents’ urging. See, e. g., New Jersey Realty Title Ins.
Co. v. Division of Tax Appeals of N. J., 338 U. S. 665, 673
(1950) (enquiring into “the practical operation and effect” of
a state tax on federal bonds). We think that 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 when it cast the
preemption net.
III
A
In familiar instances of regulatory preemption under the
Supremacy Clause, a federal measure preempting state reg-
ulation in some precinct of economic conduct carried on by
a private person or corporation simply leaves the private
party free to do anything it chooses consistent with the pre-
vailing federal law. If federal law, say, preempts state regu-
lation of cigarette advertising, a cigarette seller is left free
from advertising restrictions imposed by a State, which is
left without the power to control on that matter. See, e. g.,
Lorillard Tobacco Co. v. Reilly, 533 U. S. 525, 540–553 (2001).
On the subject covered, state law just drops out.
But no such simple result would follow from federal pre-
emption meant to unshackle local governments from entre-
preneurial limitations. The trouble is that a local govern-
ment’s capacity to enter an economic market turns not only
on the effect of straightforward economic regulation below
the national level (including outright bans), but on the au-
thority and potential will of governments at the state or local

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level to support entry into the market. Preemption of the
state advertising restriction freed a seller who otherwise
had the legal authority to advertise and the money to do
it if that made economic sense. But preempting a ban on
government utilities would not accomplish much if the gov-
ernment could not point to some law authorizing it to run a
utility in the first place. And preemption would make no
difference to anyone if the state regulator were left with
control over funding needed for any utility operation and de-
clined to pay for it. In other words, when a government
regulates itself (or the subdivision through which it acts)
there is no clear distinction between the regulator and the
entity regulated. Legal limits on what may be done by the
government itself (including its subdivisions) will often be
indistinguishable from choices that express what the govern-
ment wishes to do with the authority and resources it can
command. That is why preempting state or local govern-
mental self-regulation (or regulation of political inferiors)
would work so differently from preempting regulation of pri-
vate players that we think it highly unlikely that Congress
intended to set off on such uncertain adventures. A few
hypotheticals may bring the point home.
B
Hypotheticals have to rest on some understanding of what
§ 253 means when it describes subjects of its preemption as
laws or regulations that prohibit, expressly or in effect, “the
ability of any entity” to provide telecommunications. The
reference to “ability” complicates things. In customary
usage, we speak simply of prohibiting a natural or legal per-
son from doing something. To speak in terms of prohibiting
their ability to provide a service may mean something differ-
ent: it may mean denying the entity a capacity or authority
to act in the first place. But this is not clear, and it is possi-
ble that a law prohibiting the ability to provide telecommuni-
cations means a law that limits or cuts back on some pre-

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existing authority (under a different law) to go into the
telecommunications business.
If the scope of law subject to preemption under § 253 has
the former, broader, meaning, consider how preemption
would apply to a state statute authorizing municipalities to
operate specified utilities, to provide water and electricity
but nothing else.3 The enumeration would certainly have
the effect of prohibiting a municipally owned and operated
electric utility from entering the telecommunications busi-
ness (as Congress clearly meant private electric companies
to be able to do, see S. Rep. No. 103–367, p. 55 (1994)), and
its implicit prohibition would thus be open to FCC preemp-
tion. But what if the FCC did preempt the restriction?
The municipality would be free of the statute, but freedom is
not authority, and in the absence of some further, authorizing
legislation the municipality would still be powerless to enter
the telecommunications business. There is, after all, no ar-
gument that the Telecommunications Act of 1996 is itself
a source of federal authority granting municipalities local
power that state law does not.
Now assume that § 253 has the narrower construction (pre-
empting only laws that restrict authority derived from a dif-
ferent legal source). Consider a State with plenary author-
ity itself, under its constitution, to operate any variety of
utility.4 Assume that its statutes authorized a state-run
3 The hypothetical city, in other words, is “general law” rather than
“home rule.” See City of Lockhart v. United States, 460 U. S. 125, 127
(1983) (In contrast to a general law city, a home rule city has state consti-
tutional authority to do whatever is not specifically prohibited by state
legislation).
4 The Court granted certiorari solely to consider whether municipalities
are subsumed under the rubric “any entity,” and our holding reaches only
that question. There is, nevertheless, a logical affinity between the ques-
tion presented and the hypothetical situation in which a State were to
decide, directly or effectively, against its own delivery of telecommunica-
tions services.

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utility to deliver electric and water services, but drew the
line at telecommunications. The restrictive element of that
limited authorization would run afoul of § 253 as respondents
would construe it. But if, owing to preemption, the state
operating utility authority were suddenly free to provide
telecommunications and its administrators were raring to
enter this new field, where would the necessary capital come
from? Surely there is no contention that the Telecommuni-
cations Act of 1996 by its own force entails a state agency’s
entitlement to unappropriated funds from the state treasury,
or to the exercise of state bonding authority.
Or take the application of § 253 preemption to municipali-
ties empowered by state law to furnish services generally,
but forbidden by a special statute to exercise that power for
the purpose of providing telecommunications services. If
the special statute were preempted, a municipality in that
State would have a real option to enter the telecommunica-
tions business if its own legislative arm so chose and funded
the venture. But in a State next door where municipalities
lacked such general authority, a local authority would not be
able to, and the result would be a national crazy quilt. We
will presumably get a crazy quilt, of course, as a consequence
of state and local political choices arrived at in the absence
of any preemption under § 253, but the crazy quilt of this
hypothetical would result not from free political choices but
from the fortuitous interaction of a federal preemption law
with the forms of municipal authorization law.
Finally, consider the result if a State that previously au-
thorized municipalities to operate a number of utilities in-
cluding telecommunications changed its law by narrowing
the range of authorization. Assume that a State once au-
thorized municipalities to furnish water, electric, and com-
munications services, but sometime after the passage of § 253
narrowed the authorization so as to leave municipalities au-
thorized to enter only the water business. The repealing
statute would have a prohibitory effect on the prior ability

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to deliver telecommunications service and would be subject
to preemption. But that would mean that a State that once
chose to provide broad municipal authority could not reverse
course. A State next door, however, starting with a legal
system devoid of any authorization for municipal utility oper-
ation, would at the least be free to change its own course by
authorizing its municipalities to venture forth. The result,
in other words, would be the federal creation of a one-way
ratchet. A State or municipality could give the power, but
it could not take it away later. Private counterparts could
come and go from the market at will, for after any federal
preemption they would have a free choice to compete or not
to compete in telecommunications; governmental providers
could never leave (or, at least, could not leave by a forthright
choice to change policy), for the law expressing the govern-
ment’s decision to get out would be preempted.
The municipal respondents’ answer to the one-way ratchet,
and indeed to a host of the incongruities that would follow
from preempting governmental restriction on the exercise of
its own power, is to rely on § 253(b), which insulates certain
state actions taken “on a competitively neutral basis.” Re-
spondents contend that a State or municipality would be able
to make a competitively neutral change of mind to leave the
telecommunications market after deciding earlier to enter it
or authorize entry. Tr. of Oral Arg. 32–33.
But we think this is not much of an answer. The FCC
has understood § 253(b) neutrality to require a statute or reg-
ulation affecting all types of utilities in like fashion, as a law
removing only governmental entities from telecommunica-
tions could not be. See, e. g., In re Federal-State Joint
Board on Universal Service, 15 FCC Rcd. 15168, 15175–
15178, ¶¶ 19–24 (2000) (declaratory ruling). An even more
fundamental weakness in respondents’ answer is shown in
briefs filed by amici City of Abilene and Consumer Federa-
tion of America. We have no reason to doubt them when
they explain how highly unlikely it is that a state decision to

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withdraw would be “neutral” in any sense of the word.
There is every reason to expect just the contrary, that legis-
lative choices in this arena would reflect the intent behind
the intense lobbying directed to those choices, manifestly
intended to impede, not enhance, competition. See, e. g.,
Chen, Legal Process and Political Economy of Telecommu-
nications Reform, 97 Colum. L. Rev. 835, 866–868 (1997).
After all, the notion that the legislative process addressing
governmental utility authority is susceptible to capture by
competition-averse private utilities is fully consistent with
(and one reason for) the FCC’s position that statutes like
Missouri’s disserve the policy objects of the Telecommunica-
tions Act of 1996. Given the unlikely application of § 253(b)
to state or local choices driven by policy, not business failure,
the fair conclusion is that § 253(a), if read respondents’ way,
would allow governments to move solely toward authorizing
telecommunications operation, with no alternative to reverse
course deliberately later on.
In sum, § 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 depend-
ing on the formal structures of their laws authorizing munici-
palities to function, and it would hold out no promise of a
national consistency. We think it farfetched that Congress
meant § 253 to start down such a road in the absence of any
clearer signal than the phrase “ability of any entity.” See,
e. g., United States v. American Trucking Assns., Inc., 310
U. S. 534, 543 (1940) (Court will not construe a statute in a
manner that leads to absurd or futile results).
C
Justice Stevens contends that in our use of the hypo-
thetical examples to illustrate the implausibility of the mu-
nicipal respondents’ reading of § 253, we read the statute
in a way that produces anomalous results unnecessarily,
whereas a simpler interpretation carrying fewer unhappy

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139 Cite as: 541 U. S. 125 (2004)
Opinion of the Court
consequences is available. The dissent emphasizes the word
“ability” in the phrase “prohibit or has the effect of prohibit-
ing the ability of any entity” to furnish telecommunications.
With its focus on this word, the dissent concludes that Ҥ 253
prohibits States from withdrawing municipalities’ pre-
existing authority to enter the telecommunications business,
but does not command that States affirmatively grant either
that authority or the means with which to carry it out.”
Post, at 145. Thus, if a State leaves an earlier grant of au-
thority on the books while limiting it with a legislative ban
on telecommunications, the new statute would be preempted,
and presumably preemption would also defeat a State’s at-
tempted withdrawal of municipalities’ authority by repealing
the preexisting authorization itself.
But on the very next page, Justice Stevens allows (in
the course of disagreeing about the one-way ratchet) that “[a]
State may withdraw comprehensive authorization in favor of
enumerating specific municipal powers . . . .” Post, at 146.
It turns out, in other words, that withdrawals of preexisting
authority are not (or not inevitably, at any rate) subject to
preemption. The dissent goes on to clarify that it means to
distinguish between withdrawals of authority that are com-
petitively neutral in the sense of being couched in general
terms (and therefore not properly the subject of preemp-
tion), and those in which the repealing law expressly targets
telecommunications (and therefore properly preempted).
“[T]he one thing a State may not do,” the dissent explains,
“is enact a statute or regulation specifically aimed at pre-
venting municipalities or other entities from providing tele-
communications services.” Ibid. But the practical implica-
tion of that interpretation is to read out of § 253 the words
“or ha[s] the effect of prohibiting,” by which Congress sig-
naled its willingness to preempt laws that produce the un-
wanted effect, even if they do not advertise their prohibitory
agenda on their faces. Even if § 253 permitted such a for-
malistic distinction between implicit and explicit repeals of

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140 NIXON v. MISSOURI MUNICIPAL LEAGUE
Opinion of the Court
authority, the result would be incoherence of policy; whether
the issue is viewed through the lens of preventing anticom-
petitive action or the lens of state autonomy from federal
interference, there is no justification for preempting only
those laws that self-consciously interfere with the delivery
of telecommunications services. In short, instead of supply-
ing a more straightforward interpretation of § 253, the dis-
sent ends up reading it in a way that disregards its plain
language and entails a policy consequence that Congress
could not possibly have intended.
IV
The municipal respondents’ position holds sufficient prom-
ise of futility and uncertainty to keep us from accepting it,
but a complementary principle would bring us to the same
conclusion even on the assumption that preemption could op-
erate straightforwardly to provide local choice, as in some
instances it might. Preemption would, for example, leave a
municipality with a genuine choice to enter the telecommuni-
cations business when state law provided general authority
and a newly unfettered municipality wished to fund the ef-
fort. But the liberating preemption would come only by in-
terposing federal authority between a State and its munici-
pal subdivisions, which our precedents teach, “are created as
convenient agencies for exercising such of the governmental
powers of the State as may be entrusted to them in its abso-
lute discretion.” Wisconsin Public Intervenor v. Mortier,
501 U. S. 597, 607–608 (1991) (internal quotation marks, cita-
tions, and alterations omitted); Columbus v. Ours Garage &
Wrecker Service, Inc., 536 U. S. 424, 433 (2002). Hence the
need to invoke our working assumption that federal legisla-
tion threatening to trench on the States’ arrangements for
conducting their own governments should be treated with
great skepticism, and read in a way that preserves a State’s
chosen disposition of its own power, in the absence of the
plain statement Gregory requires. What we have said al-

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141 Cite as: 541 U. S. 125 (2004)
Scalia, J., concurring in judgment
ready is enough to show that § 253(a) is hardly forthright
enough to pass Gregory: “ability of any entity” is not limited
to one reading, and neither statutory structure nor legisla-
tive history points unequivocally to a commitment by Con-
gress to treat governmental telecommunications providers
on par with private firms. The want of any “unmistakably
clear” statement to that effect, 501 U. S., at 460, would be
fatal to respondents’ reading.
The judgment of the Court of Appeals for the Eighth Cir-
cuit is, accordingly, reversed.
It is so ordered.
Justice Scalia, with whom Justice Thomas joins, con-
curring in the judgment.
I agree with much of the Court’s analysis in Parts II and
III of its opinion, which demonstrates that reading “any en-
tity” in 47 U. S. C. § 253(a) to include political subdivisions of
States would have several unhappy consequences. I do not
think, however, that the avoidance of unhappy consequences
is adequate basis for interpreting a text. Cf. ante, at 140
(“The municipal respondents’ position holds sufficient prom-
ise of futility and uncertainty to keep us from accepting it”).
I would instead reverse the Court of Appeals on the ground
discussed in Part IV of the Court’s opinion: Section 253(a)
simply does not provide the clear statement which would be
required by Gregory v. Ashcroft, 501 U. S. 452 (1991), for a
statute to limit the power of States to restrict the delivery of
telecommunications services by their political subdivisions.
I would not address the additional question whether the
statute affects the “power of . . . localities to restrict their
own (or their political inferiors’) delivery” of telecommunica-
tions services, ante, at 129 (emphasis added), an issue consid-
ered and apparently answered negatively by the Court.
That question is neither presented by this litigation nor con-
tained within the question on which we granted certiorari.

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142 NIXON v. MISSOURI MUNICIPAL LEAGUE
Stevens, J., dissenting
Justice Stevens, dissenting.
In the Telecommunications Act of 1996 (1996 Act), Con-
gress created “a new telecommunications regime designed
to foster competition in local telephone markets.” Verizon
Md. Inc. v. Public Serv. Comm’n of Md., 535 U. S. 635,
638 (2002). Reasonable minds have differed as to whether
municipalities’ participation in telecommunications markets
serves or disserves the statute’s procompetitive goals. On
the one hand, some have argued that municipally owned util-
ities enjoy unfair competitive advantages that will deter
entry by private firms and impair the normal development
of healthy, competitive markets.1 On the other hand, mem-
bers of the Federal Communications Commission (FCC), the
regulatory agency charged with implementation of the 1996
Act, have taken the view that municipal entry “would fur-
ther the goal of the 1996 Act to bring the benefits of competi-
tion to all Americans, particularly those who live in small or
rural communities in which municipally-owned utilities have
great competitive potential.” 2 The answer to the question
presented in these cases does not, of course, turn on which
side has the better view in this policy debate. It turns on
whether Congress itself intended to take sides when it
passed the 1996 Act.
In § 253 of the Communications Act of 1934, as added by
§ 101 of the 1996 Act, Congress provided that “[n]o State or
1 See, e. g., Note, Municipal Entry into the Broadband Cable Market:
Recognizing the Inequities Inherent in Allowing Publicly Owned Cable
Systems to Compete Directly against Private Providers, 95 Nw. U. L. Rev.
1099 (2001).
2 In re Missouri Municipal League, 16 FCC Rcd. 1157, 1172 (2001).
Three Commissioners wrote separately to underscore this point. Ibid.
(statement of Chairman Kennard and Commissioner Tristani) (describing
municipally owned utilities as a “promising class of local telecommunica-
tions competitors”); id., at 1173 (statement of Commissioner Ness) (noting
that “municipal utilities can serve as key players in the effort to bring
competition to communities across the country, especially those in rural
areas”).

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143 Cite as: 541 U. S. 125 (2004)
Stevens, J., dissenting
local statute or regulation, or other State or local legal re-
quirement, may prohibit or have the effect of prohibiting the
ability of any entity to provide any interstate or intrastate
telecommunications service,” unless the State or local law is
“competitively neutral” and “necessary to . . . protect the
public safety and welfare, ensure the continued quality of
telecommunications services, and safeguard the rights of
consumers.” 47 U. S. C. §§ 253(a), (b). It is common ground
among the parties that Congress intended to include utilities
in the category of “entities” protected by § 253. See, e. g.,
Reply Brief for Federal Petitioners in No. 02–1238 et al.,
p. 16 (“Congress clearly did intend to preempt state laws
that closed the telecommunications market, including those
that closed the market to electric or other utilities”). The
legislative history of § 253 confirms the point: Congress
clearly meant for § 253 to pre-empt “explicit prohibitions on
entry by a utility into telecommunications.” S. Rep. No.
104–230, p. 127 (1996).
But while petitioners acknowledge the unmistakable clar-
ity of Congress’ intent to protect utilities’ ability to enter
local telephone markets, they contend that Congress’ intent
to protect the subset of utilities that are owned and operated
by municipalities is somehow less than clear. The assertion
that Congress could have used the term “any entity” to in-
clude utilities generally, but not municipally owned utilities,
must rest on one of two assumptions: Either Congress was
unaware that such utilities exist, or it deliberately ignored
their existence when drafting § 253. Both propositions are
manifestly implausible, given the sheer number of public util-
ities in the United States.3 Indeed, elsewhere in the 1996
Act, Congress narrowed the definition of the word “utility,”
as used in the Pole Attachments Act, 47 U. S. C. § 224, to
3 For example, as of 2001, there were more than 2,000 publicly owned
electric utilities in the United States, compared to just over 230 investor-
owned utilities. Am. Public Power Assn., 2003 Annual Directory & Sta-
tistical Report 13.

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144 NIXON v. MISSOURI MUNICIPAL LEAGUE
Stevens, J., dissenting
exclude utilities “owned by . . . any State,” including its po-
litical subdivisions—a clear indication that Congress was
aware that many utilities are in fact owned by States and
their political subdivisions. §§ 224(a)(1), (a)(3). Moreover,
the question of municipal participation in local telephone
markets was clearly brought to Congress’ attention. In
hearings on a predecessor bill, Congress heard from a rep-
resentative of the American Public Power Association who
described public utilities’ unique potential to promote compe-
tition, particularly in small cities, towns, and rural communi-
ties underserved by private companies. Hearings on S. 1822
before the Senate Committee on Commerce, Science, and
Transportation, 103d Cong., 2d Sess., 351–360 (1994) (state-
ment of William J. Ray, General Manager, Glasgow Electric
Plant Board).4 In short, there is every reason to suppose
that Congress meant precisely what it said: No State or local
law shall prohibit or have the effect of prohibiting the ability
of any entity, public or private, from entering the telecom-
munications market.
The question that remains is whether reading the statute
to give effect to Congress’ intent necessarily will produce
the absurd results that the Court suggests. Ante, at 134–
138. “As in all cases[,] our task is to interpret the words of
[the statute] in light of the purposes Congress sought to
serve.” Chapman v. Houston Welfare Rights Organiza-
tion, 441 U. S. 600, 608 (1979). Before nullifying Congress’
evident purpose in an effort to avoid hypothetical absurd re-
sults, I would first decide whether the statute can reasonably
be read so as to avoid such absurdities, without casting aside
congressional intent.
4 This testimony prompted the Senate manager of the bill to remark:
“I think the rural electric associations, the municipalities, and the
investor-owned utilities, are all positioned to make a real contribution in
this telecommunications area, and I do think it is important that we make
sure we have got the right language to accomplish what we wish accom-
plished here.” Hearings, at 379 (statement of Sen. Lott).

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145 Cite as: 541 U. S. 125 (2004)
Stevens, J., dissenting
The Court begins its analysis by asking us to imagine how
§ 253 might apply to “a state statute authorizing municipali-
ties to operate specified utilities, to provide water and elec-
tricity but nothing else,” or to a State’s failure to provide
the necessary capital to a state-run utility “raring” to enter
the telecommunications market. Ante, at 135. Certainly
one might plausibly interpret § 253, as the Court does, to
forbid States’ refusals to provide broader authorization or to
provide necessary capital as impermissible prohibitions on
entry. And as the Court observes, such an interpretation
would undeniably produce absurd results; it would leave cov-
ered entities in a kind of legal limbo, armed with a federal-
law freedom to enter the market but lacking the state-law
power to do so. But we need not—and in my opinion, should
not—interpret § 253 in this fashion. We should instead read
the statute’s reference to state and local laws that “prohibit
or have the effect of prohibiting the ability of any entity,”
§ 253(a), to enter the telecommunications business to embody
an implicit understanding that the only “entities” covered by
§ 253 are entities otherwise able to enter the business—i. e.,
entities both authorized to provide telecommunications serv-
ices and capable of providing such services without the
State’s direct assistance. In other words, § 253 prohibits
States from withdrawing municipalities’ pre-existing author-
ity to enter the telecommunications business, but does not
command that States affirmatively grant either that author-
ity or the means with which to carry it out.
Of course, the Court asserts that still other absurd results
would follow from application of § 253 pre-emption to state
laws that withdraw a municipality’s pre-existing authority to
enter the telecommunications business. But these results
are, on closer examination, perhaps not so absurd after all.
The Court first contends that reading § 253 in this manner
will produce a “national crazy quilt” of public telecommunica-
tions authority, where the possibility of municipal participa-
tion in the telecommunications market turns on the scope of

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146 NIXON v. MISSOURI MUNICIPAL LEAGUE
Stevens, J., dissenting
the authority each State has already granted to its subdivi-
sions. Ante, at 136. But as the Court acknowledges, per-
mitting States such as Missouri to prohibit municipalities
from providing telecommunications services hardly will help
the cause of national consistency. Ibid. That the “crazy
quilt” the Court describes is the product of political choices
made by Congress rather than state legislatures, see ibid.,
renders it no more absurd than the “crazy quilt” that will
result from leaving the matter of municipal entry entirely to
individual States’ discretion.
The Court also contends that applying § 253 pre-emption
to bar withdrawal of authority to enter the telecommunica-
tions market will result in “the federal creation of a one-way
ratchet”: “A State or municipality could give the power, but
it could not take it away later.” Ante, at 137. But nothing
in § 253 prohibits States from scaling back municipalities’ au-
thority in a general way. A State may withdraw compre-
hensive authorization in favor of enumerating specific munic-
ipal powers, or even abolish municipalities altogether. Such
general withdrawals of authority may very well “have the
effect of prohibiting” municipalities’ ability to enter the tele-
communications market, see ante, at 139, just as enforcement
of corporate governance and tax laws might “have the ef-
fect of prohibiting” other entities’ ability to enter. § 253(a).
But § 253 clearly does not pre-empt every state law that “has
the effect” of restraining entry. It pre-empts only those
that constitute nonneutral restraints on entry. § 253(b). A
general redefinition of municipal authority no more consti-
tutes a prohibited nonneutral restraint on entry than en-
forcement of other laws of general applicability that, practi-
cally speaking, may make it more difficult for certain entities
to enter the telecommunications business.
As I read the statute, the one thing a State may not do is
enact a statute or regulation specifically aimed at preventing
municipalities or other entities from providing telecommuni-
cations services. This prohibition would certainly apply to

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147 Cite as: 541 U. S. 125 (2004)
Stevens, J., dissenting
a law like Missouri’s, which “advertise[s] [its] prohibitory
agenda on [its] fac[e].” Ante, at 139. But it would also
apply to a law that accomplished a similar result by other
means—for example, a law that permitted only private tele-
communications carriers to receive federal universal service
support or access to unbundled network elements.5 As the
Court notes, there is little reason to think that legislation
that targets municipalities’ ability to provide telecommunica-
tions services is “ ‘neutral’ in any sense of the word,” or that
it is designed to do anything other than impede competition,
rather than enhance it. Ante, at 138. To the extent that
reading § 253 to forbid such protectionist legislation creates
a “one-way ratchet,” it is one perfectly consistent with the
goal of promoting competition in the telecommunications
market, while otherwise preserving States’ ability to define
the scope of authority held by their political subdivisions.6
The Court’s concern about hypothetical absurd results is
particularly inappropriate because the pre-emptive effect of
§ 253 is not automatic, but requires the FCC’s intervention.
§ 253(d). Rather than assume that the FCC will apply the
5 The operative distinction for § 253 purposes is thus not between im-
plicit and explicit repeals of authority. See ante, at 139–140. It is,
rather, the distinction between laws that generally redefine the scope of
municipal authority and laws that specifically target municipal authority
to enter the telecommunications business, whether by direct prohibition
or indirect barriers to entry.
6 The goal of striking a balance between promoting competition and pre-
serving States’ general regulatory authority surely supplies a sufficient
justification for “preempting only those laws that self-consciously interfere
with the delivery of telecommunications services,” rather than all gener-
ally applicable laws that might have the practical effect of restraining
entry. Ante, at 140. But even if, as the Court asserts, there were “no
justification” for drawing the line at laws that “self-consciously” interfere
with entities’ ability to provide telecommunications services, ibid., that
surely would not be a valid reason for refusing to allow the FCC to pre-
empt those that do create such an interference. We generally do not re-
fuse to give effect to a statute simply because it “might have gone farther
than it did.” Roschen v. Ward, 279 U. S. 337, 339 (1929).

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148 NIXON v. MISSOURI MUNICIPAL LEAGUE
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statute improperly, and rather than stretch our imaginations
to identify possible problems in cases not before the Court,
we should confront the problem presented by the cases at
hand and endorse the most reasonable interpretation of the
statute that both fulfills Congress’ purpose and avoids unnec-
essary infringement on state prerogatives. I would accord-
ingly affirm the judgment of the Court of Appeals.