FCC's Net Neutrality Repeal Largely Upheld by Appeals Court

FCC Chairman Ajit Pai speaks during a news conference - Getty - H 2019
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The FCC can't justify preempting states from imposing rules to regulate broadband Internet, a Washington, D.C., federal appeals court has ruled, but its repeal of net neutrality policies mostly stands. 

FCC Chairman Ajit Patel in November 2017 announced plans to repeal net neutrality rules put in place by the Obama administration that sought to create equal access to the Internet and prevent Internet service providers from prioritizing traffic from certain websites. The FCC accepted Patel's proposal in a 3-2 vote, which prompted a wave of litigation.

Still the FCC moved ahead with its Restoring Internet Freedom order in 2018 that rolled back the prohibitions on ISPs throttling content and sought to preempt states from enacting their own policies, which prompted the legal fight at hand. 

The D.C. appeals court Tuesday agreed with the FCC's designation of broadband internet as an information service rather than a telecommunications service and upheld the 2018 order with two exceptions. 

First, it held that the FCC can't preempt states from imposing their own net neutrality policies. "[T]he Commission lacked the legal authority to categorically abolish all fifty States’ statutorily conferred authority to regulate intrastate communications," states the order, which is posted in full below. "For that reason, we vacate the Preemption Directive. And because no particular state law is at issue in this case and the Commission makes no provision-specific arguments, it would be wholly premature to pass on the preemptive effect, under conflict or other recognized preemption principles, of the remaining portions of the 2018 Order."

The second exception involves remanding three issues to the FCC: the implications for public safety, what reclassification means for regulation of pole attachments and the effects of reclassification on the Lifeline Program. Those issues, combined with the Preemption Directive, weren't enough to toss the order in its entirety though.

"Regulation of broadband Internet has been the subject of protracted litigation, with broadband providers subjected to and then released from common carrier regulation over the previous decade," states the order. "We decline to yet again flick the on-off switch of common carrier regulation under these circumstances."

Pai issued a statement Tuesday following the ruling, calling the decision a "victory for consumers, broadband deployment, and the free and open Internet."

The statement continued, "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. Since we adopted the Restoring Internet Freedom Order, consumers have seen 40 percent faster speeds and millions more Americans have gained access to the Internet. A free and open Internet is what we have today and what we’ll continue to have moving forward. We look forward to addressing on remand the narrow issues that the court identified."

In concurring opinions, circuit judges Patricia Millett and Robert Wilkins explained that they were bound by a 2005 U.S. Supreme Court decision and modern day technology is far removed from what it was then and suggested that the high court or Congress take action to avoid "trapping Internet regulation in technological anachronism." Meanwhile, Senior Circuit Judge Stephen Williams concurred in part and dissented in part, arguing that vacating the Preemption Directive effectively guts the order and establishes that "state policy trumps federal; or, more precisely, the most draconian state policy trumps all else."