D.C. Memo: After the Net Neutrality Stay, What's Next at the FCC?

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Net Neutrality: The FCC’s Net Neutrality rules were supposed to take effect today. But the U.S. Court of Appeals for the Sixth Circuit last Thursday issued a stay, a triumph for Internet Service Providers and a serious setback for the Biden administration’s approach to Internet governance. According to New Street Research policy analyst Blair Levin, “The ISPs are likely to win the case, with the Sixth Circuit likely to formally overturn the FCC order in the first part of next year.” The Sixth Circuit has established a briefing schedule ahead of oral arguments in late October or early November.

After the court’s intervention last week, some can relax while others will face continued regulatory uncertainty. And the FCC, boxed in by the Supreme Court’s major questions doctrine, might need to make some adjustments. Levin said he saw difficulty in FCC Chairwoman Jessica Rosenworcel going ahead with her plan to ban bulk billing contracts for Internet service in apartment buildings and similar facilities. Here are a few issues that remain unsettled.

ISPs: For broadband-only providers, the FCC’s rules were a mixed bag. They barred them from signing exclusive service deals with landlords, but they also gave them pole access protections that cable operators and phone companies have had for decades. With their pole rights in question, broadband-only providers might not be robust participants in the BEAD program, according to the Sheppard Mullin law firm.

USF: The court’s stay will likely inject new energy into the debate over Universal Service Fund reform. On the federal level, the FCC refused to require ISPs to contribute broadband revenue to the fund, using its forbearance authority to do so. The agency also barred states from filling their own USF coffers with broadband revenue. If the courts strike down Net Neutrality, it could create new headaches for ISPs.

Rate Regulation: The Net Neutrality rules blocked states from regulating retail broadband rates, but Rosenworcel said she would not interfere with New York’s Internet rate controls because no one filed a complaint. New York ISPs, if eventually restored as information service providers by the courts, could be in position to challenge the New York law in the Supreme Court.