Net Neutrality Focus Shifts to States, Hill

WASHINGTON — Call it legal ping-pong, regulatory pinball or judicial rinse and repeat — it was called all of those and more — but a new decision out of a federal court here on the FCC’s latest set of net neutrality rules has ISPs and virtually everyone else calling for Congress to finally step in and clarify just what authority the agency has and should use over internet access.

The court decision upholds the move of principal ’net oversight from Ajit Pai (l.) and the FCC to Joseph Simons and the FTC, but the field may be shifting further to the states and the Hill.  

The court decision upholds the move of principal ’net oversight from Ajit Pai (l.) and the FCC to Joseph Simons and the FTC, but the field may be shifting further to the states and the Hill.  

Good luck with that.

Such was the fallout over the court’s decision to uphold the Federal Communications Commission’s reclassification of internet access service as a Title I information service, rather than a Title II telecommunications service subject to common carrier, mandatory access regulations. In the process, the three-judge panel from the U.S. Court of Appeals for the D.C. Circuit left alone the FCC’s decision to eliminate rules against blocking, throttling and paid prioritization and deeded most internet oversight to the Federal Trade Commission and the Justice Department.

This latest legal volley only muddied the waters further when it came to whether or not states can step in — as California, most notably, has done — to regulate in the absence of the FCC rules. California actually went beyond the 2015 Open Internet rules the current FCC deregulated, though its law has yet to go into effect after the DOJ sued and the sides took a breather to wait for this appeal decision, released on Oct. 1.

Pre-emptive Moves Curbed

While the FCC, under current chairman Ajit Pai, had pre-empted any state efforts to reregulate in the 2017 Restoring Internet Freedom deregulatory order, the D.C. Circuit said the commission had exceeded its authority, and could only pre-empt state efforts on a case-by-case basis under the “conflict pre-emption” provision that covers regulations that conflict with federal laws.

There was some disagreement over whether or not the court’s decision to wipe out that blanket pre-emption opened the door to a potential 50 state internet regulatory regimes. FCC officials speaking on background didn’t see it that way, but activists on foreground said they did and would be pushing states to pass their own tough new laws.

Mozilla vice president of public policy, trust and security Alan Davidson, the lead name on the rule challenge, said the decision provided a path forward to state-level action to do what the FCC did not, citing California and Vermont as taking the lead with already passed laws.

ISPs were celebrating while activists were considering next steps and vowing to push for the Save the Internet Act, a bill that passed the House and would reinstate Title II and related rules.

ISPs were calling for legislation, too, but they will not be signing on to any proposal that tries to codify Title II — particularly when fresh from a court victory where it was decided the FCC had reasonably reclassified to Title I.

Activists were taking some comfort in the fact that the D.C. appeals judges based their decision in part on Brand X, the Supreme Court’s 2005 precedent that internet access could be reasonably classified under Title I. The court also extended the so-called Chevron deference given to expert agencies, which is that courts put at least a pinky — some would say a thumb — on the judicial scale for agency decisions, under the theory that agencies generally know more about the impacts of communications policy decisions than judges. Net-neutrality activists said the judges recognized that, although a lot had changed since the 2005 Brand X decision, their hands were tied, or at least they felt they were, by that precedent.

So what will actually happen next?

The FCC has to come back to the court with a better justification for its assertion that its deregulatory moves would not adversely affect public safety, pole-attachment regulations and Lifeline broadband subsidies. FCC officials who spoke on background said they had no concerns about providing those explanations.

Activists and Democrats will push for:

Title II legislation. ”The fight is on,” said Sen. Edward Markey (D-Mass.), a network neutrality fan, though arguably it has never been off.
State-by-state action. New York Attorney General Letitia James signaled her state may be one of those to act. “We stand committed to protecting our residents by treating all internet traffic equally, defending access, innovation and competition,” she said in an e-mailed statement to Multichannel News.

ISPs will back compromise legislation, but from a stronger position than when the case had yet to be decided. FCC officials speaking on background said chairman Pai also continues to believe that the ideal scenario is for Congress to step in and resolve the issue once and for all, even if that ultimately means restoring some of the rules the FCC eliminated.

“We stand committed to protecting our residents by treating all Internet traffic equally, defending access, innovation and competition.” — Letitia James, New York state attorney general

A Congress bickering over impeachment and divided over Title II is not likely to find common ground any time soon amidst all the scorched earth.

If net neutrality fans want to continue the pingpong/pinball/rinse and repeat route, they have several options, said attorney Andy Schwartzman, who argued for restoring the rules:

• They can seek full court review of the three-judge decision, which he thinks is unlikely to be granted.
• They can appeal directly to the Supreme Court, though Schwartzman said that would not be a favorable venue given the makeup of the court. For example, newest Justice Brett Kavanaugh is a veteran of the D.C. Circuit and no fan of the old net neutrality rules. That would risk an even worse precedent from that highest court.
• They can “take their medicine” and try for a Congressional fix, though that is likely a long-term play given the political divide over the issue of Title II and the general political divide.

The FCC could also challenge the pre-emption portion of the decision. One of the three judges dissented strongly from pre-emption, “setting up an important defense for the FCC should it challenge this part of the decision,” said Roslyn Layton, visiting scholar with the American Enterprise Institute. An FCC official speaking on background would not rule out such a challenge, but agreed the dissent provided strong ammunition for such an appeal.

And, of course, if a Democrat wins the White House in 2020, a new chairman could try and justify yet another 180-degree turn on Title II.

In the meantime, Michael Powell, president and CEO of NCTA-The Internet & Television Association and the former FCC chairman who first offered up Open Internet principles, said: “As a practical matter, the decision will have little impact on consumers’ internet experience. It does nothing to change our industry’s enduring commitment to providing consumers with the same open internet experience that has been delivered for decades.”

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.