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Net Neutrality

Ninth Circuit Court of Appeals Denies Efforts to Eliminate California Net Neutrality Law

A coalition of telecommunication trade associations were unable to sway the court.

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Photo of FCC Chairwoman Jessica Rosenworcel

April 20, 2022 – The U.S. Court of Appeals for the Ninth Circuit on Wednesday denied the efforts of telecommunications trade groups to to rehear its prior decision upholding California’s 2018 net neutrality law.

In January, the court turned back industry trade groups, including US Telecom, the cable industry groups NCTA and ACA Connects, and the wireless association CTIA, who had sought to overturn California’s SB 822 on the grounds that the Federal Communications Commission federal rules on net neutrality conflict with California’s state level rules.

Then, the appeals court found that because the FCC determined – in a prior ruling during the Trump administration – that it no longer had authority over broadband consumer protection, California’s broadband consumer protection law could go into effect.

On Wednesday, the appeals court refused to reconsider whether the California law had been preempted by the FCC’s decision.

In January 2018, the FCC – administered by then-Commissioner Ajit Pai – rescinded rules put in place in 2015 by the Obama administration that had reclassified broadband services from “information services” to “telecommunication services.” The latter category is subject to far more regulations.

Later that year, California passed SB 822, putting net neutrality requirements in place for California consumers, even after the rules had been gutted at the federal level by the FCC.

On the federal level, the D.C. Circuit Court of Appeals upheld the Trump administration’s removal of net neutrality requirements in October 2019. Although the Pai FCC’s reclassification was largely upheld by the D.C. circuit court, the victory was tempered by the court’s decision, by a two-to-one margin, to vacate the FCC’s having purported to preempt “any state or local requirements that are inconsistent with [the FCC’s] de-regulatory approach.”

In a tweet about Wednesday’s ruling, FCC Chairman Jessica Rosenworcel said:

  • The 9th Circuit just denied the effort to rehear its decision upholding California’s #netneutrality law. This is big. Because when the FCC rolled back its open internet policies, states stepped in. I support net neutrality and we need once again to make it the law of the land.

“As expected, the 9th U.S. Circuit Court of Appeals has rejected yet another attempt by internet service providers to overturn California’s strong net neutrality law,” said John Bergmayer, Legal Director at Public Knowledge.

“The California net neutrality law is now undefeated in court after four attempts to eliminate it,” he said. Net neutrality protections nationally continue to be common sense and popular with the public among all ideologies. It’s good news that Californians will continue to enjoy this important consumer protection, and we look forward to a full Federal Communications Commission restoring net neutrality nationwide.”

Expert Opinion

Johnny Kampis: Democrats Needlessly Push Another Round of Net Neutrality Legislation

The Net Neutrality and Broadband Justice Act may harm the ability of broadband infrastructure to grow.

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The author of this Expert Opinion is Johnny Kampis, director of telecom policy for the Taxpayers Protection Alliance.

It ain’t broke, but Democrats keep trying to “fix” it.

July 28 saw the introduction of a bill to reimplement Title II regulations on broadband providers, paving the way for a second attempt at “net neutrality” rules for the internet.

Led by Sen. Ed Markey, D-Mass., along with co-sponsors Sen. Ron Wyden, D-Ore., and Rep. Doris Matsui, D-Calif., the comically named Net Neutrality and Broadband Justice Act would classify ISPs as common carriers and give the Federal Communications Commission significant power to regulate internet issues such as pricing, competition, and consumer privacy.

Markey claims that the deregulation of the internet under former FCC Chairman Ajit Pai left broadband consumers unprotected. But as data has shown, and Taxpayers Protection Alliance’s own investigation highlighted, no widespread throttling, blocking or other consumer harm occurred after the Title II rules were repealed.

Randolph May, president of the Free State Foundation, noted after Markey’s bill was released that nearly all service providers’ terms of service contain legally enforceable commitments to not block or throttle the access of their subscribers to lawful content.

Markey said his legislation, which would codify broadband access as an essential service, will equip the FCC with the tools it needs to increase broadband accessibility.

The country already has the tools it needs to close the digital divide, with billions in taxpayer dollars flowing to every state to boost broadband access. For example, less than $10 billion in federal funding was dedicated to broadband in 2019, but an incredible $127 billion-plus in taxpayer dollars will be dedicated to closing the digital divide in the coming years. That doesn’t even count the nearly $800 billion in COVID-19 relief and stimulus funding that could be used for multiple issues, including broadband growth.

The bill’s proponents say that the FCC can foster a more competitive market with the passage of the legislation. FCC’s data already indicate the market is extremely competitive, with 99 percent of the U.S. population able to choose between at least two broadband providers. That doesn’t even account for wireless carriers and their rapid development of 5G.

The Net Neutrality and Broadband Justice Act may instead harm the ability of broadband infrastructure to grow without funneling even more taxpayer money toward the cause. Studies have shown that private provider investment increased after the regulatory uncertainty of Title II rules were removed. Prior to the reversal of the 2015 Open Internet Order, broadband network investment dropped more than 5.6 percent, the first decline outside of a recession, the FCC reported.

US Telecom reported that capital expenditures by ISPs totalled $79.4 billion in 2020 and grew to $86.1 billion in 2021.

Michael Powell, president and CEO of NCTA – The Internet & Television Association, called the issue of net neutrality “an increasingly stale debate” with justifications for it that “seem increasingly limp.”

“In the wake of the once-in-a-lifetime infrastructure bill, we need to be focused collectively on closing the digital divide and not taking a ride on the net neutrality carousel for the umpteenth time for no discernable reason,” he said. “Building broadband to unserved parts of this country is a massive, complex, and expensive undertaking. Slapping an outdated and burdensome regulatory regime on broadband networks surely will damage the mission to deploy next-generation internet technology throughout America and get everyone connected.”

Again, the specter of Title II regulations rears its ugly head for no discernible reason other than the government’s insatiable need for control. The broadband market has proven itself as a market that functions better with a light-touch approach, so we hope that Congress says not to this misguided bill.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Net Neutrality

Democrats Seek to Codify Net Neutrality as Fifth FCC Commissioner Hangs

Some say the bill would add heavy regulation that will harm investments and consumers.

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Photo of Senator Edward Markey (D-MA) during virtual press conference on Thursday

WASHINGTON, August 1, 2022 – Democratic Senators introduced Thursday a bill that would enshrine into law the concept of net neutrality, which would prevent internet service providers from tinkering with internet traffic, in a move that comes ahead of midterm elections that could alter whether the Federal Communications Commission gets its Democratic fifth commissioner to take unilateral action on the matter.

The Net Neutrality and Broadband Justice Act would give the FCC regulatory authority over broadband by classifying those services as Title II as defined in the 1934 Communications Act. Under Title II, the FCC would have greater regulatory muscle to make providers respect the principle of common carriage – that is, the traffic on their networks will not be throttled, sped up or given preference. Under the current light touch Title I – which was reinstituted by the 2017 commission under chairman Ajit Pai – the FCC does not have that authority, and the commission has previously been blocked by courts to bring net neutrality under Title I.

“My legislation would reverse the damaging approach adopted by the Trump FCC, which left broadband access unregulated, and consumers unprotected. It would give the FCC the tools it needs to protect the free and open internet, creating a just broadband future for everyone in our country,” Senator Edward Markey, D-Mass., said during a virtual press conference hosted by Public Knowledge on Thursday.

Markey noted that the majority of Americans and Republicans favor restoring net neutrality rules in the country.

Public Knowledge, an advocacy group for an open internet, was co-founded by Gigi Sohn, who was nominated by President Joe Biden to be the fifth FCC commissioner. The vote to confirm in the Senate has not happened yet, as some Republicans have complained about Sohn’s ability to be impartial on the commission.

“We’ve gone 544 days into the Biden administration without a fully functional agency. It’s time for Senate leadership to end this senseless delay and get the agency back to full capacity,” said Matt Wood, vice president of policy and general counsel at Free Press Action, in a press release welcoming the bill.

Reintroduction of bill comes as Sohn’s nomination to FCC appears to falter 

Sohn, who would be the party tiebreaker on the commission, would have bolstered the FCC’s chance to press for a reclassification of broadband services under Title II. But the longer a vote is not held, the less optimistic some say they are getting that a vote will be held before a midterm election in November that could flip the Senate red.

“Confirmation is still possible, but with the extended August recess and looming midterm election, there aren’t a lot of legislative days to get the job done,” said former FCC Chairman Richard Wiley at an event late last month.

Republican Commissioner Nathan Simington previously said that he would welcome congressional action on net neutrality – instead of an FCC vote on it.

“I have previously stated that the FCC’s 2015 Net Neutrality rules were the right approach,” said FCC Commissioner Geoffrey Starks in a press release. “That approach is undergirded by a voluminous record and overwhelming public support, and it has been tested in court. The Net Neutrality and Broadband Justice Act would codify just that,”

The bill comes after FCC Chairwoman Jessica Rosenworcel has repeatedly said that she believes net neutrality should be the guiding principle for the internet economy. Rosenworcel was defiant in her support of the principle in response to a letter from Republican representatives who encouraged her not to change her mind on it.

She added in a statement after the bill’s introduction that despite the FCC having the authority it needs to implement net neutrality, “legislation that helps ensure it is the law of the land is welcome.”

“For anyone who wants more innovation, more voices and less corporate control of the internet, net neutrality is an absolute no-brainer,” said Ron Wyden, D-OR, who co-introduced the bill. In 2018, Verizon admitted to throttling the wireless speeds used by California firefighters who were working on a large fire – one of the examples used to illustrate the imposition of such rules.

As such, California has gone its own way in lieu of inaction from Washington. The state won a court battle this year from broadband industry that challenged its own net neutrality law. The law made AT&T pull free sponsored applications to residents.

Critics of the net neutrality measure from the broadband industry

But broadband service providers and the commission that reversed net neutrality rules don’t see it that way. They say that regulations imposed by a net neutrality framework hinders innovation and competition in the market – including being able to provide free access to certain applications.

Michael Powell, CEO of trade association NCTA, said this bill will have a negative effect on closing the digital divide.

“In the wake of the once-in-a-lifetime infrastructure bill, we need to be focused collectively on closing the digital divide and not taking a ride on the net neutrality carousel for the umpteenth time for no discernable reason,” he said.

“Slapping an outdated and burdensome regulatory regime on broadband networks surely will damage the mission to deploy next-generation internet technology throughout America and get everyone connected,” said Powell.

The Wireless Internet Service Providers Association also came out against the bill, saying heavy regulation would hamper their ability to serve underserved areas of the country. “The bill’s Title II requirements would create real threats to their ongoing viability,” the release said.

“Net neutrality may be a mixed bag, but common carrier regulation would inhibit competition, private investment and innovation, and further confound the complex task of eradicating the digital divide,” it added.

Another trade group USTelecom said it is concerned such regulation would hamper investments in broadband networks. “There is bipartisan support for net neutrality, but legislative proposals that would put any of this progress at risk are not the right answer,” said CEO Jonathan Spalter in a release. “Let’s keep our focus on moving consumers’ internet experiences forward, not backward.”

Non-profit research institution the Free State Foundation added that this type of bill will impose heavy-handed regulation that will harm consumers.

“[T]here is no present evidence, and there hasn’t been any for years, that ISPs have engaged in any deliberate discriminatory conduct,” said the FSF in a press release. “Almost all ISPs’ terms of service contain legally enforceable commitments not to block or throttle subscribers’ access to lawful content.

“To the extent that a couple of old incidents are cited that conceivably would run afoul of stringent anti-discrimination prohibitions, they have been isolated and quickly remedied,” the FSF added. “That’s why the net neutrality advocates are left to conjecture about what ‘might,’ ‘could,’ or ‘possibly’ happen absent new regulation, rather than identifying any existing problem warranting costly new regulatory mandates.”

With reporting by Riley Haight.

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Courts

Supreme Court’s EPA Decision Unlikely to Significantly Affect Federal Communications Commission

But landmark administrative law ruling could add more burden on agency in justifying decisions.

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Photo of Free State Foundation President Randy May courtesy the foundation

WASHINGTON, July 7, 2022 – The Federal Communications Commission is unlikely to be affected by a Supreme Court decision last week that limits the scope of decision-making by agencies on certain matters, but it could add to the commission’s task of proving that their decisions are in-line with the laws they administer, experts told Broadband Breakfast.

The June 30 high court ruling found, in West Virginia v. EPA, that the Environmental Protection Agency has limited regulatory authority, and that Congress alone has the power to decide on “major questions” of “vast economic or political significance.” The court effectively decided in favor of the so-called “major questions” doctrine, a conservative legal theory that seeks to maintain separation of powers by allocating “major questions” as the responsibility of Congress alone.

In turn, that theory contrasts with but does not explicitly overrule the still-valid doctrine known as Chevron deference. Chevron deference holds that where federal agencies are given legislative delegation by Congress, they are allowed reasonable interpretation of that authority.

Several experts are concerned, according to Protocol, that the ruling could affect the plans of tech regulators to implement laws under their jurisdiction. FCC Chairwoman Jessica Rosenworcel recently reaffirmed her support for net neutrality rules to prevent internet service providers from slowing or blocking web traffic, and supporters fear that the EPA decision could prevent further action at the FCC.

But experts Broadband Breakfast spoke to don’t exactly see it that way for the commission.

Chevron deference ‘increasingly in eclipse.’

“Ninety-eight percent of the decisions that the FCC makes – at least – are not going to be considered major question cases if they ever get to review,” Randolph May, founder and president of the Free State Foundation, said in an interview with Broadband Breakfast, adding that the doctrine of Chevron deference (after the 1984 Supreme Court decision Chevron v. Natural Resources Defense Council) is “increasingly in eclipse.”

Meanwhile, Harold Feld, senior vice president of internet advocacy group Public Knowledge, also told this publication that while, “I don’t think the major question doctrine applies to much of what the FCC does.”

It may, however, have an impact on the timeliness of the agency, including any decision it makes on net neutrality, he said.

Harold Feld

There will be an additional need to prove that the actions of the agency are in line with not merely a reasonable interpretation of the statutory authority but also consistent with previous practices, he said.

Agencies must also consider “how expansive is [a statute] really until it becomes a major question that Congress has to be even more specific about.”

The impact for agencies in the lower courts must also be considered, continued Feld. For decades, Chevron deference has been the standard in the courts. It allows for agencies to have a framework to determine how lower courts will analyze cases, he said. The undermining of Chevron deference will bring back the “wacky uncertainty that caused the Supreme Court to implement Chevron in the first place.”

The ambiguity that results from the ruling may have a greater impact on the Federal Trade Commission, Feld said. “It is clear that Congress intended the FTC to do rulemaking, but it is also clear that they haven’t done it before,” Feld explained. “So do they need special authorization from Congress now?”

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