U.S. federal appeals court says FCC’s net neutrality/open internet rules are “unlawful”
U.S. Court of Appeals for the Sixth Circuit today struck down the Federal Communications Commission’s (FCC’s) hard-fought and long-debated net neutrality/open internet rules. The FCC had sought to reinstate a sweeping policy established under President Obama that was designed to treat internet service as an essential public service, similar to a water or power utility. The court ruled that broadband communications, including broadband delivered via mobile networks, is classified as an “information” service rather than a more heavily regulated “telecommunications” service. That important distinction means the FCC lacks the authority to impose the current set of rules, the court’s three-judge panel found.
The court said a recent U.S. Supreme Court ruling had removed a judicial framework that allowed courts to interpret rules with deference to the federal agency that created them. The 6th Circuit said the FCC did not have the statutory authority to change the classification of broadband internet to a telecommunications service. That role rests with Congress. The case was brought by the Ohio Telecom Association, a trade organization representing internet service providers (ISPs).
The negative ruling arrives about six months after the Sixth Circuit court stayed the FCC’s network neutrality rules, under current Chairwoman Jessica Rosenworcel, which aimed to resurrect broadband under a more heavily regulated Title II/telecommunications service classification. The FCC, under Rosenworcel, passed the current set of net neutrality rules in April 2024.
Backgrounder: Under the net neutrality rules, internet service providers (ISPs) would have been subjected to greater regulation. A Republican-led commission repealed the rules in 2017 during President-elect Donald Trump’s first term in office. Early last year, the FCC — then back under Democrat control — voted to formalize a national standard for internet service to prevent the blocking or slowing of information delivered over broadband internet lines. The core principle of open internet meant that internet service providers couldn’t discriminate among content suppliers. The order also would have given the FCC increased oversight to demand that internet providers respond to service outages or security breaches involving consumers’ data. The FCC cited national security, saying increased oversight was necessary for the commission to effectively crack down on foreign-owned companies that were deemed to be security threats.
“Using ‘the traditional tools of statutory construction’ … we hold that Broadband Internet Service Providers offer only an ‘information service’ … and therefore, the FCC lacks the statutory authority to impose its desired net-neutrality policies through the ‘telecommunications service’ provision of the Communications Act,” the Sixth Circuit court, based in Cincinnati, OH, said in its ruling.
“We conclude that Broadband Internet Service Providers at the very least offer consumers the ‘capability’ of ‘retrieving’ ‘information via telecommunications’,” the Sixth Circuit explained. “Accordingly, the FCC’s contrary conclusion is unlawful.”
The decision is another blow to an FCC that had fought for the rules to be reinstated under Rosenworcel and the outgoing Biden administration. The decision is a win for broadband service providers along with several organizations, including ACA Connects, CTIA, NCTA and USTelecom, that had argued against the rules, holding that the market has been thriving under a “light-touch regulatory framework.”
In a statement about the Sixth Circuit Court’s decision, FCC chairwoman Rosenworcel said:
“Consumers across the country have told us again and again that they want an internet that is fast, open, and fair. With this decision it is clear that Congress now needs to heed their call, take up the charge for net neutrality, and put open internet principles in federal law.”
However, the ruling is likely just the start of a larger wave of deregulatory shifts that’s expected to occur in 2025 and beyond under the new Trump administration. Incoming FCC Chairman Brendon Carr (see quote below) is the senior Republican on the five-member commission and has championed many of Trump’s causes. One of the authors of the Project 2025 policy paper, he has outlined plans to remove regulations conservatives consider overbearing or outdated. He will also wrestle with looming budget crunches and court rulings that threaten to erode the federal agency’s overall authority.
Some reactions to Thursday’s ruling:
1. “We hope that today’s decision will allow for a refocused conversation about effective ways to achieve national goals with respect to broadband access,” Mike Romano, EVP of NTCA – The Rural Broadband Association, said in a statement.
2. MoffettNathanson analyst Craig Moffett noted in an emailed statement to investors that the broadband market has been concerned that if the FCC had the authority to impose Title II reclassification, it could open the door for the Commission to impose broadband price regulation. “That risk is now put to bed,” he said. The decision was of little surprise after the FCC’s ability to start enforcing the rules was delayed after the court put them on hold amid a review of the precedent set by the US Supreme Court’s decision last June to strike down the decades-old Chevon deference (a.k.a. the Loper Bright) decision. That decision stands to limit the power and authority of federal agencies, such as the FCC, in interpreting certain laws that are considered ambiguous. Notably, Chevron has played a significant role over the years in establishing the FCC’s authority to set and enforce network neutrality regulations. “Indeed, the reason we and others stopped worrying about Title II was because it was clear that the judicial principle of Chevron Deference wasn’t going to survive much longer,” Moffett wrote.
3. Free Press, a long-time network neutrality advocate, argued that the court wrongly rejected the FCC’s jurisdiction on the matter. “Beyond being a disappointing outcome, today’s 6th Circuit opinion is just plainly wrong at every level of analysis,” Matt Wood, VP of policy and general counsel at Free Press, said in a statement. “Today’s decision will let the incoming Trump FCC abdicate its responsibility to protect internet users against unscrupulous business practices … It’s rich to think of Donald Trump and Elon Musk’s hand-picked FCC chairman characterizing light-touch broadband rules as heavy-handed regulation, while scheming to force carriage of viewpoints favorable to Trump on the nation’s broadcast airwaves and social media sites.”
4. Statement from Tully Center for Free Speech on Net Neutrality Ruling:
As expected, FCC Commissioner & incoming FCC Chairman Brendon Carr (Republican) cheered news of the ruling by stating, “Over the past four years, the Biden Administration has worked to expand the government’s control over every feature of the Internet ecosystem. You can see it in the Biden Administration’s efforts to pressure social media companies into censoring the free speech rights of everyday Americans. You can see it in the Biden Administration’s demand that the FCC adopt ‘digital equity’ rules for the Internet—sweeping regulations that give the Commission nearly limitless powers over the Internet. And you can see it in the Biden Administration’s decision to impose so-called ‘net neutrality’ rules by applying Title II or utility-style regulations to the Internet.”
References:
https://www.fcc.gov/document/chairwoman-rosenworcel-sixth-circuit-court-net-neutrality-decision
https://docs.fcc.gov/public/attachments/DOC-408580A1.pdf
Good reporting on an issue that, as stated by the Syracuse University professor, has been going on for decades. It will be interesting to see if Congress acts to simplify telecom/broadband regulation given that the last major rewrite was almost three decades ago. Probably the more relevant thing these days will be the challenges of AI neutrality or AI hallucination/manipulation (whatever the right buzzword might be).
Incoming FCC Chairman Brendan Carr “will prioritize future network needs over protecting existing customers on legacy services,” wrote Blair Levin, a policy adviser to New Street Research and a former high-level FCC official, in a recent note to investors. “We also think that he will be clearer in directing staff to approve decommissioning requests. Further, we think he will be an effective voice in urging states to be more accommodating to ILEC [incumbent local exchange carrier] requests to retire copper networks.”
https://www.lightreading.com/network-platforms/wireless-is-apparently-the-new-copper