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The debate over the degree of regulation of broadband Internet providers in the U.S. has been going on almost as long as broadband Internet service has been available. In 2004, the U.S. Federal Trade Commission (FTC) first described a set of non-discrimination principles to ensure that users had access to content on an equal basis.

In 2008, the FCC issued its first net neutrality enforcement decision, upholding a complaint against Comcast for selectively interfering with peer-to-peer protocols used to share files online. It found that Comcast’s practices were discriminatory and arbitrary beyond the scope of reasonable network management.

The FCC’s efforts to strengthen net neutrality enforcement were stymied by several 2010 rulings of the U.S. Court of Appeals for the District of Columbia Circuit, which held that the FCC had impermissibly applied common carrier regulations on Internet providers without determining that Internet providers were common carriers. (The FCC had previously classified fixed broadband Internet service as an information service, not a regulated telecommunications service.)

In response, the FCC issued an order in February 2015 that reclassified broadband Internet service as a telecommunications service. The order also imposed a set of rules to prohibit broadband providers from:

  • Blocking access to legal content, applications services or non-harmful devices;
  • Impairing or degrading Internet traffic on the basis of content, applications, services or non-harmful devices; and
  • Prioritizing some lawful Internet traffic over other lawful traffic in exchange for consideration of any kind.

The Death of Federal Net Neutrality Regulation?

In December 2017, under a new administration and new FCC chairman, the FCC voted to adopt a new order repealing the 2015 net neutrality rules and re-classifying Internet services as information services. The new order took effect on June 11, 2018.

The 2017 order also attempts to block states from enacting their own net neutrality laws, using the argument that there was a need for a uniform federal regulatory [or de-regulatory] approach to interstate information services. The order cited language in a 1983 Supreme Court decision that stated the following:

[A] federal decision to forego regulation in a given area may imply an authoritative federal determination that the area is best left unregulated, and in that event would have as much pre-emptive force as a decision to regulate. [Emphasis added]

Having Cake and Eating It, Too?

The 2010 DC Circuit cases had determined that the FCC did not have authority to apply common carrier regulations to Internet providers if they were classified as an information service. Therefore, the FCC had to reclassify Internet providers as a telecommunications service as part of the 2015 rule in order to apply and enforce net neutrality rules.

With the repeal of the 2015 rule, Internet providers are once again classified as an information service, which means that the FCC doesn’t have the authority to regulate the providers. If the FCC doesn’t have the authority to regulate, then it follows that the FCC also doesn’t have the authority to pre-empt states from regulating the providers.

A lawsuit challenging the FCC’s 2017 order, filed by attorneys general from twenty-one states and the District of Columbia, is now pending before the DC Circuit court, the same court that ruled in the 2010 cases that the FCC could not regulate information service providers under common carrier regulations.

The Birth of State-Level Net Neutrality Regulation

In response to the FCC’s decision to repeal net neutrality rules, proposals have been introduced in thirty states for net neutrality regulation at the state level; four of these proposals have been enacted into law to date (in Washington, Oregon, Vermont and California).

Within hours after the California Internet Consumer Protection and Net Neutrality Act of 2018 was signed into law on October 1, 2018, the US Department of Justice filed a lawsuit in California to block its implementation, arguing that it is pre-empted by federal law, at least until the case challenging the FCC’s 2017 order in the DC circuit is resolved.

On October 3, 2018, a separate lawsuit was filed by four lobbying groups which represent the largest telecommunications companies. Like the DOJ lawsuit, this industry lawsuit also argues that the California law is pre-empted by federal law and requests an order blocking the implementation of the California law.

All eyes are now on the DC Circuit. Will it determine that the FCC has no authority to regulate information services and therefore has no authority to pre-empt state regulation of information services, or will it adopt the FCC’s interpretation that the FCC can choose to de-regulate and pre-empt state-level regulation of information services?