D.C. Memo: Court Stops Net Neutrality in Blowout Win for ISPs, FCC's Brendan Carr
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Net Neutrality: The long, twilight struggle over Net Neutrality has ended for the FCC. Yesterday, three federal circuit judges in Cincinnati issued a unanimous ruling that stopped the FCC from treating dynamic broadband ISPs as utilities subject to bans or restrictions on data caps and wireless zero rating plans under a vague but potentially punitive General Conduct standard. And ardent Net Neutrality proponent — FCC Chairwoman Jessica Rosenworcel — was one of the first to recognize that her signature cause had been removed from her agency’s remit just 18 days before she is to return to the private sector. "With this decision it is clear that Congress now needs to heed [consumers’] call, take up the charge for Net Neutrality, and put open Internet principles in federal law," Rosenworcel said in a statement. Her burden-shifting to Congress approach seemed to contain a latent message to her supporters: Don't even bother with an appeal to the GOP-packed Supreme Court. In some form or another, the Net Neutrality debate has been raging at the FCC since the late 1990s, ignited by AT&T’s merger with Tele-Communications Inc. and AOL’s with Time Warner. Net Neutrality was an outgrowth of a short-lived effort to impose open access requirements on ISPs. Incoming FCC Chairman Brendan Carr embraced the ruling by the U.S. Court of Appeals for the Sixth Circuit, which will insulate broadband ISPs like Comcast and Charter from common carrier status under Title II of the Communications Act. "I am pleased that the appellate court invalidated President Biden’s Internet power grab by striking down these unlawful Title II regulations. But the work to unwind the Biden Administration’s regulatory overreach will continue. I welcome the chance to advance a policy agenda that will deliver great results for the American people," Carr said in a statement. Carr was likely describing Rosenworcel's expansive digital discrimination rules buttressed by disparate impact legal liability. Seven months ago, the FCC would have won the Net Neutrality case in the Sixth Circuit but that was before the Supreme Court invalidated the Chevron doctrine, which forced federal courts to defer to the FCC in many key respects -- "a thumb on the scale in favor of regulatory interpretations on ambiguous laws," as Rosenworcel put it in remarks at a Berkeley Law forum in September. Under the high court's June 2024 ruling in Loper Bright Enterprises v. Raimondo, the FCC now needs to come up with the "best reading" of the law not just a reasonable one, and the Sixth Circuit said the best reading was that broadband Internet service is a lightly regulated information service. "Therefore, the FCC exceeded its statutory authority by issuing the [Net Neutrality] order," said Circuit Judge Richard Allen Griffin, who was joined by Circuit Judges Raymond M. Kethledge and John K. Bush, all Republican appointees.
The FCC's inability to regulate broadband ISPs will create a vacuum that some blue states will be eager to fill with their own prohibitions on blocking, throttling, and paid prioritization. The Supreme Court two weeks ago refused to review a New York state law that required ISPs to offer rate-regulated broadband to low-income households. The door remains wide open for other states to copy New York on low income plans and California's 2021 Net Neutrality law. A call for state action went out yesterday from Ernesto Falcon, a program manager at the California Public Utilities Commission. "The FCC losing on Title II reclassification at the 6th Circuit is unfortunate. But it is also a call for those of us in state government to step up in the absence of the FCC. We are now the ones solely responsible for protecting public safety, promoting healthy markets, and bringing down the cost for consumers," Falcon said on LinkedIn. "Let's get to it." MoffettNathanson Senior Managing Director Craig Moffett — who has tracked Net Neutrality for many years — said the Sixth Circuit ended "a long and torturous chapter for cable investors" who no longer had to fear broadband price regulation. "That risk is now put to bed," he said. In a coda that many veterans of the Net Neutrality wars could appreciate, Moffett said: "We won’t be sorry to never have to write about this subject again."
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