Consumer Groups Looking to Pause Narrow Legal Challenge to Net Neutrality

WASHINGTON, August 8, 2024 – The Federal Communications Commission’s decision to exempt Internet Service Providers from kicking into a federal broadband subsidy program has this week stirred some procedural activity in the U.S. Court of Appeals for the Sixth Circuit in Cincinnati.

Consumer groups tend to support the FCC’s Net Neutrality rules (now on hold) but some still want the court to reverse the FCC’s refusal to tap ISP revenue for the $8.1 billion Universal Service Fund. The groups asked the Sixth Circuit to put that challenge on pause for now.

The Sixth Circuit issued a judicial stay of the FCC’s Net Neutrality order on August 1, writing that the internet service providers trying to strike down the rules were “likely to succeed on the merits.”

That order, coupled with an existing petition for review with the FCC, make it possible the court or the agency “could likely render moot or alter the issue” in the public interest groups’ challenge. 

The Benton Institute for Broadband and Society and the Media Alliance want to pause their USF issue because the FCC has the issue on reconsideration. If the FCC reversed its position, the court case would effectively become moot.

“It could well be a waste of resources for the parties and this Court to consider the issues in [the public interest challenges] at this time,” the groups wrote.

Net Neutrality rules classified broadband as a common carrier service under Title II  of the Communications Act. 

By default that would involve ISPs' paying a portion of interstate revenue into the USF, but the agency chose not to apply that legal mandate to ISPs in Net Neutrality order adopted April 25, citing a fear of increasing internet bills. The move bucked the suggestions of some public interest advocates during the FCC's rulemaking process.

Benton and the Media Alliance called that decision “arbitrary and capricious,” a reference to the legal standard for tossing out agency policies. They said the agency’s concerns were unfounded, noting that the USF’s current source of funding – interstate voice revenue – was diminishing while rural and low-income broadband needs funded by the USF continued to climb.