In a Changed Legal Landscape, the FCC Should Reconsider Net Neutrality Rules

In a legal setback for the Federal Communication Commission, the U.S. Sixth Circuit Court of Appeals announced last month that it would temporarily block the Commission’s highly controversial net neutrality rule, which imposes utility-style regulations on the internet and requires service providers to treat different types of data the same.

Even before the Commission voted to restore the rule in April, there were serious questions about whether it would pass legal muster. In a paper published late last year, former Obama attorneys Donald B. Verrilli Jr. and Ian Heath Gershengorn argued that any unilateral attempt by the Commission to treat broadband internet access service (BIAS) as a common carrier service under Title II of the Communications Act of 1934 would be a “wasted effort.”

That is because it would likely run afoul of the major questions doctrine, which stipulates that agencies must be able to point to clear congressional authorization on matters of “vast economic and political significance” to legally make decisions.

Greatly expanding FCC regulatory authority

Reclassifying broadband from a Title I information service to a Title II telecommunications service greatly expands the FCC’s regulatory authority and almost certainly counts as a matter of economic and political significance. Without a Congressional statute giving the FCC explicit power to lawfully change how broadband technology is governed, the agency is clearly overstepping its bounds.

After all, the Commission agreed as recently as 2015 that the “open Internet drives the American economy” and has described BIAS as “essential to modern day life” The Commission cannot have it both ways. The U.S. Sixth Circuit would appear to agree, writing that the “Communications Act likely does not plainly authorize the Commission to resolve this signal question.”

Even if the courts ultimately decide that the FCC has not exceeded its regulatory authority with the rule, it is still in the Commission's best interest to reconsider implementing it. Imposing top-down, utility-style regulations on the broadband market is completely unnecessary and counterproductive.

American consumers have more choices than ever, and the market is only becoming more competitive. No longer are consumers limited to legacy systems like cable and DSL for an internet connection. They can use fixed wireless, fiber, and a growing assortment of satellite internet options.

Since the FCC repealed the short-lived Obama-era Open Internet Order in 2017—the first iteration of net neutrality regulations—the broadband market has functioned just fine under a light-touch regulatory framework. Not only is there no evidence that providers engage in anticompetitive behaviors related to blocking and throttling content or paid privatization, but the internet already is “safe, secure, and open” and consumers enjoy a wide range of benefits including better, faster, more widely available internet service at declining prices.

The market does not require corrective intervention

The market does not require corrective intervention on the part of the FCC. Moving the clock back to 2015 and adopting heavy-handed internet regulations risks undermining these consumer benefits and could prove disastrous for future network investment and deployment of new innovative technologies.

Europe serves as a cautionary tale of what happens when you ignore these basic realities and apply utility-style controls to network infrastructure. In contrast to the U.S., which continues to reap the benefits of robust network investment and innovation, Europe is falling further and further behind on critical connectivity metrics such as deployment, adoption, and competition. That is not something that anyone, including the FCC, should want to emulate.

Fortunately, the Sixth Circuit has created a new opportunity for the FCC to reconsider its net neutrality rule—not only legally but also as a matter of effective policy. The Commission needs to rediscover regulatory restraint.

Nate Scherer is a Policy Analyst with the American Consumer Institute where he researches and writes about a diverse range of consumer issues. He previously served as a Policy Analyst at the Reason Foundation and has also worked for several other nonprofits including the Texas Public Policy Foundation and the Leadership Institute. More recently, he worked an educator for Fairfax County Public Schools and performed research for Georgetown University’s Edunomics Lab. This Expert Opinion 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.