While the Federal Communications Commission and President Trump herald a federal appeals court decision to uphold their 2017 repeal of net neutrality regulations as a victory, the ruling gives hope to proponents that new state laws could circumvent the FCC’s decision.
The D.C. Circuit Court of Appeals heavily criticized the FCC’s use of “statement of policy” throughout the ruling, saying that a statement of policy does not replace authority conferred by Congress. It also said states could put into law their forms of highly contentious net neutrality regulations. The ruling may set up legal battles between states and the federal government when such rules run afoul of the “impossibility exception.” The exception applies to instances where it is legally determined that it is not possible to separate interstate and intrastate components of asserted regulation.
“Specifically, if the matter involves interstate communications or a mix of state and federal matters and it falls within the impossibility exception, then the Commission may regulate to the extent of its statutory authority,” the court ruled.
The FCC’s December 2017 repeal of the Obama-era net neutrality regulations went into effect in June 2018, but the move has been fought every step of the way. FCC Commissioner Brendan Carr insisted that the “light-touch approach” of regulating internet service providers would benefit from “conflict preemption,” when federal law trumps state law, in the event of states broadly implementing regulations themselves.
“The same people that are saying that the D.C. Circuit has blessed state net neutrality rules are the same people that told us in 2017 that it was the end of the internet,” Carr said. “The reality, as told by the black and white lettering of the D.C. Circuit’s decision, is if a state passes a net neutrality law that conflicts with the light-touch approach that the FCC has put in place, then conflict preemption would apply. The court did not say states can pass any ‘net neutrality’ laws or laws they want under the rubric of net neutrality.”
On the flip side, proponents of net neutrality are reveling in the court’s decision, saying that states can implement their own rules instead of federal regulations, effectively making the FCC’s move moot. Many states are expected to do just that as 22 state attorneys general joined the suit against the FCC to try to reverse the repeal. Ernesto Falcon, senior legislative counsel for the Electronic Frontier Foundation, didn’t think the ruling was a setback by any means.
“What the FCC has lost on — this is a pretty big loss for them — is that they cannot stop states from simply just filling in their shoes,” Falcon said. “State legislators simply can just pick up the baton on protecting users and internet policy. I suspect most, if not all, of states will start doing more of that in the coming years.”
Falcon said that the FCC, through its reclassification push, “made a mess” of the process through which companies can access the rights of way, or how the wires connect from point A to point B. He argues the FCC is allowing “legacy companies” to have exclusive rights and access to infrastructure due to their history as telecommunications operators. Net neutrality regulations classified ISPs as “common carriers,” which would have “treated everyone the same” when it came to accessing the infrastructure because the internet would be a utility.
“The Governmental Petitioners express substantial concern that, in reclassifying broadband Internet as an information service, the Commission, without reasoned consideration, took broadband outside the current statutory scheme governing pole attachments,” the court ruled. “We agree.”
Carr, however, argues that treating the internet in such a way strangles investment by companies, saying that smaller providers notified the FCC, under penalty of perjury, that it was pulling infrastructure investment due to the regulations. Carr says that, by reverting to Title I regulations, companies will be incentivized to continue investing in advancing internet services. He argues that it’s done just that. He says since the repeal, speeds have increased, and more fiber, which is integral for the availability of next-generation broadband, has been laid than ever before.
The FCC also says the Title I classification puts the internet back under the jurisdiction of the Federal Trade Commission, which Carr says is more capable of keeping ISPs honest due to its antitrust prosecution and customer protection. Under Title II, Carr says there would be too much “regulation overhang.”
The court did rule that the FCC would be remanded to answer the repeal’s effects on public safety, the Lifeline program, and the regulation of pole attachments.
