The Net Neutrality Fight Moves to the States (Probably)

By Joseph Fawbush, Esq. on October 03, 2019

Internet service providers like Comcast now have the legal authority under federal law to charge businesses and individuals more for faster bandwidth. The end of “net neutrality” came about when the Federal Communications Commission re-classified broadband internet as an information service under Title I of the 1996 Telecommunications Act. Previously, broadband internet was classified as a communications service under Title II of the same Act, under which it was subject to heavier regulations, including preventing ISPs from offering so-called “fast lanes” and “slow lanes”.

The fight for net neutrality raged in 2016, but ultimately the FCC passed the new classification on a 3-2 vote of commissioners. The humbly named Restore Internet Freedom Order went into effect in 2018, revoking broadband internet’s Title II framework.

Mozilla v. FCC

That 2018 re-classification was promptly contested in federal court by Mozilla, dozens of state attorneys general, and a host of other petitioners. The results of that lawsuit are in. The D.C. Circuit Court of Appeals, in a 200-page decision, upheld the FCC’s right to classify broadband internet as an information service.

The panel looked to the Supreme Court’s 2005 decision in National Cable v. Brand X, which upheld the FCC’s right to refuse to classify cable broadband as a communications service. The D.C. Court of Appeals viewed Brand X as binding precedent. As did the Supreme Court 15 years ago, the D.C. Court of Appeals applied Chevron deference to the FCC’s interpretation of the 1996 Telecommunications Act and found the FCC’s reading reasonable.

The panel also found the petitioners’ claims that the FCC’s rule was arbitrary and capricious unconvincing. The FCC reasonably relied on data and appropriate studies in concluding that a Title I classification as an information service “would likely increase ISP investment and output,” which was (and still is) a contested claim. But it’s one that the judges declined to insert their own opinions into.

FCC Does Not Have the Authority to Preempt State Regulations

While the panel generally upheld the FCC’s right to deregulate internet broadband, it did not buy the FCC’s 2018 Order wholesale. The Panel vacated the portion that stated the order preempted “any state or local requirements that are inconsistent with [its] deregulatory approach.” As the panel noted, the FCC would need either “express or ancillary authority to issue [the preemption]. It had neither.” The court characterized the FCC’s position as a “bureaucratic blunderbuss capable of demolishing state laws across the Nation.”

This is significant, as over half the states have introduced legislation promoting net neutrality. California, Washington and Oregon have already passed such measures. As it stands, ISPs may have to contend with a patchwork of state regulations.

Everyone’s a Winner!

Both sides claimed victory, with FCC Chairman Ajit Pai tweeting that the decision was a “big victory for consumers.” Meanwhile, former FCC Chairman Tom Wheeler wrote in a New York Times op-ed that as a result of the decision, California’s tighter regulations will become the de facto standard and that “internet service providers should be quaking in their boots.”

The truth of the matter is that this is unlikely to be the last we hear of this long-running battle. Below are some potential next steps:

  • The FCC has yet to decide if it will appeal the portion of the ruling vacating its preemption of state laws. It may appeal to have the case heard en banc or to the Supreme Court.
  • The FCC could ask Congress to intervene. While unlikely in the near term, should Congress choose to do so it could give the FCC the authority to preempt state laws.
  • The Department of Justice has filed a lawsuit against California over its net neutrality law. California and the DOJ agreed to suspend proceedings until the D.C. Circuit Court of Appeals had issued this decision. The results of the next legal battle could yet impact states’ rights to implement net neutrality.

Stay tuned.

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