FCC, States Could Clash Over Net Neutrality

Did the FCC exceed its authority by trying to preempt states from imposing more stringent net neutrality rules?

October 7, 2019

7 Min Read
Net neutrality

By Josh Long

A federal appeals court this month largely upheld a 2018 decision by the Federal Communications Commission to dismantle ‘net neutrality’ regulations issued under the Obama administration.

But the FCC exceeded its authority by attempting to preempt states from imposing more stringent requirements than the 2018 rules, according to a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit).

The FCC “has not shown legal authority to issue its preemption directive, which would have barred states from imposing any rule or requirement that the Commission ‘repealed or decided to refrain from imposing’ in the order or that is ‘more stringent’ than the order,” the D.C. Circuit held.

The Oct. 1 ruling likely set ups a potential showdown for more court clashes over states’ regulation of the internet in a manner that would arguably conflict with – and undermine – a national framework.

“The court’s decision leaves states with a clear path forward to enact state net neutrality laws to protect internet users and provide certainty for participants in the digital economy,” said John Bergmayer, legal director at Public Knowledge, a public interest group in Washington, D.C. “States should move expeditiously to protect consumers where the FCC has refused to do so.”

A bill in California – signed into law in 2018 – restored net neutrality rules aimed to protect consumers that the FCC disseminated in 2015. In filing a 2018 lawsuit against the state of California, the U.S. Department of Justice argued the state was attempting to impose onerous state regulations, and in the words of then-Attorney General Jeff Sessions, “frustrate federal policy.”

California last year agreed to put its law on hold, the Los Angeles Times reported, pending a decision by the D.C. Circuit on whether the FCC acted lawfully when it ended its prior internet rules.

The fate of California’s law remains uncertain. While a spokesperson for the office of California Attorney General Xavier Becerra said the law “appears to be on pretty solid ground,” Doug Brake with the Information Technology and Innovation Foundation – a think tank in Washington, D.C. – predicted the law and a similar one in Vermont “will fall pretty quickly,” the San Francisco Chronicle reported.

In a separate statement, Brake suggested the recent appeals court decision paves the way for states to promulgate their own Internet rules, “creating more confusion and potential conflict.”

“Broadband networks – the fundamental communications platform of our day – deserve uniform, nationwide, expert agency oversight at the FCC,” he added.

But states haven’t been pleased with the FCC’s policies. In 2018, nearly two dozen state attorneys general – including New York – sued to block the FCC’s repeal of Internet regulations adopted in 2015 during the Obama administration.

“We stand committed to protecting our residents by treating all internet traffic equally, defending access, innovation and competition,” New York Attorney General Letitia James said, commenting on the D.C. Circuit’s ruling. “It’s unfortunate that the court has sanctioned the federal government’s abandonment of those principles.”

The state of Vermont in 2018 adopted a net neutrality law that was challenged in court and officials have yet to enforce, but the D.C. Circuit’s decision isn’t expected to …

… change anything immediately, according to local news media.

“While the ruling on preemption gives us some hope, there is still a long way to go in the legal process and therefore there is no immediate impact from the decisions,” Rebecca Kelley, a spokesperson for Vermont Gov. Phil Scott, said in an email to VTDigger.org, a statewide news website.

Tom Giovanetti, president of the Institute for Policy Innovation (IPI), a think tank in Irving, Texas, disagreed with the D.C. Circuit that the FCC lacked adequate authority to preempt state regulations over the internet. He suggested attempts by states to regulate the internet would trigger a court challenge based on a provision in the U.S. Constitution that grants Congress the power to regulate interstate commerce.

“If states try to regulate broadband with net neutrality-style regulations, we don’t expect them to survive a Commerce Clause challenge,” Giovanetti said.

In 2015, the FCC under then-Commissioner Tom Wheeler adopted rules to promote open access to the internet, including reclassifying broadband Internet access as a telecommunications service. The FCC barred internet service providers from blocking lawful content, throttling or degrading web traffic, or creating “fast lanes” by prioritizing content in exchange for money.

“These enforceable, bright-line rules assure the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone’s permission,” Wheeler said at the time in a statement.

The Republican-led FCC in early 2018 largely dismantled the internet rules, replacing what the agency described as “heavy-handed utility-style regulation.”

Ajit Pai, chairman of the FCC who led the charge to take a lighter approach to regulation of the internet, suggested consumers have benefited from his actions.

“Since we adopted the Restoring Internet Freedom Order, consumers have seen 40% faster speeds and millions more Americans have gained access to the internet,” he said in a statement. “A free and open internet is what we have today and what we’ll continue to have moving forward.”

Jonathan Spalter, president and CEO of USTelecom, a trade association in Washington, D.C., hailed the D.C. Circuit’s ruling.

“The court got it right and affirmed what anyone who has been paying attention to Washington’s net neutrality saga knows to be true,” he said in a statement. “[T]he internet is open, ISPs are investing to bring internet users the content they want, and we remain absolutely opposed to anti-consumer practices like blocking, throttling and anticompetitive paid-prioritization.”

FCC Commissioner Jessica Rosenworcel, a Democrat, highlighted parts of the court’s order that overturned certain FCC regulations, including its attempt to preempt the states.

The “decision vacates the FCC’s unlawful effort to block states and localities from protecting an open internet for their citizens,” she said. “From small towns to big cities, from state houses to governors’ executive actions, states and localities have been stepping in because the FCC shirked its duties.”

According to the D.C. Circuit, the FCC also neglected to examine the implications of …

… its decision for public safety and failed to explain how its decision would affect regulation of pole attachments. The court also held the FCC failed to sufficiently address concerns about the effects of broadband reclassification on the Lifeline program, which makes communications services available to low-income Americans.

Reactions to the D.C. Circuit’s ruling highlighted Congress is likely to remain a key player in the years-long fight over how the Internet should be regulated.

“Unless Congress codifies nationwide open internet rules, including the designation of broadband as an information service, we will very likely see continuation of the ping-pong at the FCC between classifications of broadband as an information service and as a telecommunications service,” the Internet Innovation Alliance, a Washington, D.C.-based coalition of business and nonprofit organizations, said. “And open internet rules that lack uniformity will only impede innovation, as the internet does not stop at any state line.”

The House of Representatives in April voted to restore the FCC’s 2015 regulations through legislation (“Save the Internet Act of 2019”) introduced by Rep. Michael Doyle, a Democrat from Pennsylvania and member of the House Committee on Energy and Commerce.

Senate Majority Leader Mitch McConnell (R-Kentucky) told reporters the legislation would be “dead on arrival in the Senate,” the Hill reported.

But the fight over net neutrality is far from dead in Congress. Sen. Maria Cantwell, a Democrat from Washington and ranking member of the Senate Committee on Commerce, Science and Transportation, said she was “deeply disappointed in the” D.C.’s Circuit ruling.

“An overwhelming majority of Americans understand the importance of a free and open internet to our innovation economy,” she said. “I am relieved that the court rejected the FCC’s attempt to stop states – like Washington state – from protecting their citizens online.  But I will keep fighting for a strong federal net neutrality law and urge my colleagues to join me in fighting to put consumers and innovators ahead of profits for big cable companies.”

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