As you may have heard, the long-awaited decision in Mozilla v. FCC came out yesterday. First the bad news: The Federal Communications Commission won on the main issue, which is broadband reclassification. But there’s good news, too, in that the Court completely rejected the FCC’s attempts to prevent states from passing their own net neutrality rules.
The Court’s opinion is incredibly long and complex, and we’re going to be considering the implications in the weeks to come. But for now, here’s a quick look at where the fight to protect broadband users is headed next.
Either side might appeal. I don’t think anyone has made a final decision yet. Our side is of course disappointed that we lost on the reclassification question — although the Court didn’t appear particularly impressed with the FCC’s arguments, the judges felt constrained by a highly deferential standard of review set by the Supreme Court, so the FCC carried the day. (Remember, this same court has also repeatedly upheld the previous FCC’s decision to classify broadband as telecommunications, and to apply net neutrality rules to ISPs. If anything, yesterday’s court opinion makes the choice by the FCC whether or not to regulate broadband even more of a policy decision, as opposed to a legal question.)
There are some silver linings in that some of the FCC’s arguments were not accepted — notably, its bizarre claim that accessing an information service with a telecommunications service somehow transforms the telecommunications service into an information service — but it would have been nicer to win on the reclassification point, and broadband remains an unregulated “information service” under the law. (It’s important to note that an information service isn’t just a different kind of communications service that the FCC regulates — it’s not just moving broadband from one regulatory bucket to another. An information service is a service that the FCC, by default, doesn’t regulate at all. Besides broadband, other examples of information services include databases, Amazon.com, Uber’s dispatch platform, dial-a-joke lines, and telephone answering services.)
With all that said, whether and how to appeal the D.C. Circuit’s decision is a complex strategic question that I cannot answer for you today.
The other side might appeal, too, given that the loss on the preemption question could subject broadband providers to state-level broadband consumer protection rules they would rather not comply with. So we’ll see.
The FCC’s attempt to preempt states from regulating broadband was soundly rejected by the Court. That means that states now basically have a green light to enact whatever broadband rules they want, including net neutrality rules that go as far or further than the 2015 Open Internet Order. Some states already have such rules in place, though they have agreed not to enforce them until this litigation is over and done with.
As a general matter, of course, federal agencies (and Congress!) can preempt state laws. But here, the FCC didn’t just decide that a deregulatory approach was good policy. It found that it had no jurisdiction over broadband at all — and attempted to use this as a basis for preemption. That, of course, doesn’t work, as the Court ably explained. The National Park Service doesn’t regulate toasters, but that doesn’t give it the authority to preempt state appliance safety laws. To preempt states, the FCC would need to actually have rules on the books about broadband that conflict with state laws — and it hasn’t enacted any, and can’t, unless it either reclassifies broadband as a Title II service once again, or asserts ancillary authority over broadband. The current FCC has not been eager, to say the least, to take either path. (By the way, this is why the spin from the FCC that “conflict preemption” remains a possibility is so hollow. What particular FCC requirements do state net neutrality laws conflict with? You’d think if the Commission had been able to think of any, it would have cited them in the litigation instead of relying on an invented and legally meaningless “federal policy of nonregulation.”)
While the FCC’s 2017 Order as a whole was not vacated, three specific issues were sent back to the Commission for reconsideration: the effect of broadband deregulation on access to utility poles by competitive ISPs; its effect on the Lifeline program, which makes broadband more affordable to low-income individuals; and the effect of deregulation on public safety (e.g., fire departments who count on mobile broadband). The Commission will have to open proceedings to deal with all of these topics, and accept public comment on them, as well. Each of these issues is of course closely related to the basic question of broadband deregulation. For example, it may be that the only way the FCC can fulfill its legal duty to protect and promote public safety is to revisit its decision to abdicate authority over broadband. So, while the issues that were remanded to the FCC may seem somewhat narrow, their implications may be broad.
Antitrust and Other Federal Agencies
The FCC argued that antitrust law and consumer protection agencies like the Federal Trade Commission could take over for the FCC in ensuring that broadband consumers were protected. While the Court said that the FCC offered “anemic analysis” on this point and just “barely survives arbitrary and capricious review on this issue,” it did survive, and the Court did not order the FCC to redo or rethink its terrible analysis. (And even if it had — without revisiting the classification issue itself, the fact remains that the FTC has jurisdiction for the moment over broadband practices, and the FCC does not.) While we still don’t think that the FTC is the right agency for the job, for the moment, we will do what we can to hold the FTC to account to ensure that it is doing its best to protect broadband consumers from unfair practices, and to police anticompetitive practices in the broadband industry.
There is actually broad consensus that Congress should ultimately act to address net neutrality and define the contours of the FCC’s authority over broadband providers. The fact that there’s something for everyone to be unhappy with in yesterday’s Court ruling provides some hope that Congress might be able to step in to finally pass legislation to achieve these goals.
Earlier this year, the House passed the Save the Internet Act. Last year, a bipartisan majority of the U.S. Senate approved a Congressional Review Act resolution to toss the Pai-FCC’s net neutrality repeal and reinstate the 2015 Open Internet Order. Clearly, the most straightforward path to passing the net neutrality legislation is for the Senate to pass the bill that has actually passed out of the House.
Passing the Save the Internet Act would accomplish the goals of most prominent groups in the net neutrality conversation while also remedying many of the most painful losses hung on those same stakeholders by Tuesday’s D.C. Circuit ruling. For example, public interest and consumer advocates want the FCC to have broad authority under Title II of the Communications Act to protect consumers. Broadband providers would prefer a single federal standard for broadband regulation, rather than the possibility of navigating fifty different state approaches. Broadband providers and consumers both want consistency and certainty with regards to the FCC’s consumer protection authority. Policymakers in Congress and at the FCC have long talked about closing the digital divide and ensuring federal policies are aimed at promoting universal service, as well as rolling out next-generation networks, like 5G wireless.
Passing the Save the Internet Act is actually an elegant solution to address each of these issues. The lack of legal authority for the FCC to protect consumers and promote competition is remedied by reinstating Title II classification. The lack of regulatory certainty and desire to have a single, federal standard for broadband regulation is addressed, preempting state laws and setting clear federal rules that cannot be undermined by forbearance. The murkiness that the Court’s decision cast over the FCC’s authority to ensure broadband providers can deploy networks by accessing utility poles and rights of way would be resolved, as would the FCC’s authority to support broadband deployment and adoption through the Universal Service Fund programs. In both instances, the agency would have the tools and authority to promote deployment and universal service.
The House has passed its net neutrality bill. Now, the pressure is on the Senate to resolve the issues laid bare by yesterday’s Court ruling.
No one would like this issue to be resolved more than Public Knowledge. Heck, we thought it *was* resolved the last time we went in front of the D.C. Circuit, and the Wheeler-FCC’s net neutrality rules were upheld. But policy and politics sometimes surprises you, and you have to adapt. Net neutrality is of foundational importance, and we’re not going to give up, or to settle for some sort of “compromise” that leaves consumers unprotected in key ways. The Court’s decision yesterday was another surprise, and I don’t think anyone predicted exactly how it came out. But we are going to continue to press in every way we can to make sure that the internet remains a free and open platform.