Federal appeals court upholds overturn of net neutrality, but allows states to set own rules

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A federal appeals court upheld the FCC overturning net neutrality, but also ruled that the FCC can't preempt states from setting their own rules. (Pixabay)

It was a mixed bag Tuesday after a federal appeals court upheld the Federal Communication Commission's decision to get rid of the net neutrality rules, but struck down a provision that blocked states from passing their own net neutrality protections.

The D.C. Circuit Court of Appeals issued an opinion in Mozilla v. Federal Communications Commission and upheld the net neutrality framework adopted in the FCC’s 2017 Restoring Internet Freedom (RIF) Order, but said the FCC can't justify preempting states from imposing rules to regulate broadband internet.

As part of Tuesday's decision, the court also remanded another part of the order back to the FCC and told the agency to take into consideration other issues, such as public safety, after the repeal.

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RELATED: Appeals court hears net neutrality arguments

The current FCC previously voted to switch internet services back from an FCC regulated utility to an FTC regulated utility. FCC Chairman Ajit Pai, who was appointed by the Trump administration, spearheaded the effort in December 2017 to repeal the net neutrality rules, which the FCC commissioners approved by a 3-2 vote. Those votes were along party lines. The FCC commissioners that voted in favor of removing net neutrality characterized the rules as heavy-handed while also leading to fewer investments.

Speaking at the SCTE-ISBE Cable-Tec Expo conference in New Orleans Tuesday morning, NCTA CEO and President Michael Powell gave his initial take on the appeal court's order.  

"I'm going to be careful because I haven't read the opinion, but it looks like the commission was upheld by the D.C, circuit on the classification of internet services as an information service, which in our minds is the most monumental part of the decision," said Powell, who is a former chairman of the FCC. "So Chairman Pai's order reclassifying us from not being a telecom service provider to an information service provider appears to have been upheld by the D.C. circuit.  At least as the law stands after this decision today we'll remain in the more lightly regulated category, which we have always thought was the right category.

"The FCC asserted their right to preempt all states having net neutrality legislation. The court questioned whether they had that authority. That has been vacated so we could be dealing with whether California or other states get active on net neutrality or whether there's an opportunity for the commission to expand upon its decisions and preserve preemption."

The net neutrality rules were put in place under the Obama administration to prevent large ISPs, such as Comcast, AT&T and Verizon, from throttling or blocking traffic or offering paid "fast lanes" to give preference to internet traffic. Consumer groups and large companies, such as Facebook and Amazon, have opposed the overturn of net neutrality.

Several states, including California and Washington, have been developing their own rules for large ISPs. Attorney generals in 22 states and several tech firms have filed a suit in the U.S. Court of Appeals for the District of Columbia. The Department of Justice is suing California saying its new net neutrality law breaks federal law, but that was put on hold pending the outcome of the appeals court ruling.

"We uphold the 2018 Order, with two exceptions,” the appeals court said in its findings on the case. “First, the Court concludes that the commission has not shown legal authority to issue its Preemption Directive, which would have barred states from imposing any rule or requirement that the commission “repealed or decided to refrain from imposing” in the Order or that is “more stringent” than the 2018 Order. The Court accordingly vacates that portion of the Order. Second, we remand the Order to the agency on three discrete issues: (1) The Order failed to examine the implications of its decisions for public safety; (2) the Order does not sufficiently explain what reclassification will mean for regulation of pole attachments; and (3) the agency did not adequately address Petitioners’ concerns about the effects of broadband reclassification on the Lifeline Program.”

“Today’s decision is a victory for consumers, broadband deployment, and the free and open internet," Pai said in a statement. "The court affirmed the FCC’s decision to repeal 1930s utility-style regulation of the internet imposed by the prior administration. The court also upheld our robust transparency rule so that consumers can be fully informed about their online options…We look forward to addressing on remand the narrow issues that the court identified.”

The net neutrality debate has been ongoing for close to a decade. Both the House and Senate, depending on whether the Democrats or Republicans had majority control, have batted net neutrality legislation back and forth for years. While the appeals court decision does seem to be a step in one direction, net neutrality and the issues surrounding it may not get resolved until after the 2020 election.

"We're exhausted by what has been a decade long struggle, even longer, on net neutrality," Powell said Tuesday morning. "We're frustrated that the United States Congress, which is the only institution that has the authority to finally resolve this, continues to be stuck in doing so. We remain interested in being a good partner in getting legislation that would resolve this issue, but the world is going to move on. 10G has proved the world's moving. 5G has proved the world's moving on. We're having a 1990s battle in the 21st Century in a way we need to get past."

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