FCC Net Neutrality Rules Blocked by Federal Appeals Court

The FCC’s efforts to establish traffic rules for Internet services have been sidelined again, as a federal appeals court has blocked the latest version of net neutrality rules.

The 6th Circuit Court of Appeals concluded that the FCC did not have the authority to implement the rules, which require ISPs to treat all traffic equally. The rules also aimed to restrict ISPs from establishing “fast lanes” and “slow lanes” depending on who paid for preferential treatment.

While the FCC has gone back and forth for nearly two decades on net neutrality, depending on whether a Democrat or Republican is in the White House, the latest decision casts doubt on any future efforts to establish robust rules. That’s because the Supreme Court last year overturned a precedent that gives deference to federal agencies in interpreting the laws they enforce. The precedent stemmed from a 1984 case, Chevron vs. NRDC, and became known as “Chevron deference” or the “Chevron Doctrine”.

A three-judge panel noted that the net neutrality rules “issued under the Biden administration — undo the order issued under the first Trump administration, which voided the order issued under the Obama administration, which voided orders issued during the Bush and Clinton administrations.” Applying the latest Supreme Court ruling, the justices wrote, “means we can end the FCC’s vacillation.”

The FCC under President Barack Obama enacted the most robust set of net neutrality rules, establishing their legal basis by reclassifying Internet services as a Title II telecommunications service or common carrier. The latter regulatory maneuver provoked widespread opposition among major telecommunications companies such as Comcast and AT&T.

The latest appellate decision held that broadband Internet service was in fact an “information service,” meaning the FCC lacked the authority to impose regulations under Title II. The judges also ruled that mobile service could not be regulated as a common carrier.

The FCC under President Donald Trump largely reversed the FCC rules, but they were reinstated when Democrats regained control of the agency under President Joe Biden.

FCC Chair Jessica Rosenworcel acknowledged that the latest ruling means the fate of net neutrality likely rests with Congress.

“Consumers across the country have told us time and time again that they want an internet that’s fast, open and fair,” she said in a statement. “With this decision, it’s clear that Congress now needs to heed their call, take up the net neutrality charge, and enshrine open internet principles in federal law.”

The end of “Chevron deference,” meanwhile, could prove to complicate the Trump administration’s efforts to establish its own rules. The incoming chairman of the FCC, Brendan Carr, opposed reinstating the rules. But he has called on the FCC to take action on the way major Internet platforms, such as Facebook and YouTube, moderate their third-party content, arguing that they have been biased against right-wing voices. Any action is likely to be opposed by tech giants and challenged in court.

NCTA-The Internet & Television Association and other industry groups said in a statement that “the ruling affirming that broadband Internet access is an ‘information service’ is not only the correct reading of the statute, but a victory for American consumers that will lead to more investment, innovation and competition in the dynamic digital marketplace.Since the birth of the Internet, bipartisan administrations and policymakers have recognized the benefits of a light-touch approach to broadband regulation.Today’s ruling will cement America’s position as the world’s most advanced digital marketplace.”

Andrew Jay Schwartzman, senior counsel at the Benton Institute for Broadband & Society, an intervenor in the case, said in a statement that the decision “misreads the Telecommunications Act of 1996 by finding that broadband is not subject to the statutory requirements of Title II of the Communications Act . Among other things, it strips the FCC of its power to protect national security, ensure that competitive broadband providers can access needed distribution points, and jeopardizes wireless access programs for low-income consumers.”

He also said the appellate judges “rejected the statutory analysis of Justice (Antonin) Scalia — the only telecommunications expert ever to sit on the Supreme Court — and found that the “best reading” of the statute does not allow the FCC to regulate Internet providers on many important ways. This is bad for consumers, for businesses that rely on the Internet, and for protecting broadband networks from intrusion by nation states.”

In a 2005 Supreme Court dissent, Scalia argued that the FCC should regulate ISPs as telecommunications services, not information services.

Schwartzman noted that the appellate judges gave a narrow reading of the Supreme Court ruling that overturned the so-called “Chevron doctrine.” Schwartzman also noted that the court also did not rely on ISPs’ broader arguments over the agency’s authority, known as the “big question doctrine,” “so that the FCC will retain the power to regulate various aspects of broadband services without future congressional action.”