In Nixon v. Missouri Municipal League, No. 02-1238, the Supreme Court holds that 47 U.S.C. § 253 does not bar states from restricting their own subdivisions' delivery of telecommunications services. The Associated Press reports here:
The Supreme Court said Wednesday that states may block cities and other local governments from setting up shop as phone service providers.
The court ruled 8-1 that while Congress intended to broaden competition in the telecommunications field, it did not mean to set up messy confrontations among states, private phone companies and local governments.
See also the Reuters story here.