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Appeals court ruling creates ambiguity for future of state net neutrality laws

Though an Oct. 1 ruling from a federal appeals court vacated a blanket federal preemption of state laws, senior U.S. Federal Communications Commission officials believe the decision does not give a green light to states seeking to enact substantially different net neutrality laws.

Ruling

Under the ruling, the U.S. Court of Appeals for the District of Columbia upheld the provision in the FCC's 2018 order that reclassified broadband as a Title I service under the Communications Act, giving the FCC less authority over internet service providers. The 2018 order also eliminated agency net neutrality rules implemented during the Obama administration that prohibited network operators from blocking or throttling legal internet traffic or prioritizing certain traffic in exchange for payment.

However, the ruling also vacated a provision in the order that "would have barred states from imposing any rule or requirement" that the FCC "repealed or decided to refrain from imposing" in its 2018 order, or any rule or requirement that is more stringent than the agency's 2018 order.

Response

Senior FCC officials told reporters shortly after the announcement of the decision that they believe the court did not hold that states can implement laws that conflict with the agency's 2018 order. Instead, they believe the court's decision would require the FCC to judge state statutes that conflict with the agency's 2018 order on a case-by-case basis.

Specifically, officials pointed to a section of the ruling that states that if the FCC "can explain how a state practice actually undermines the 2018 Order, then it can invoke conflict preemption." Yet the court also wrote in its ruling that "in any area where the Commission lacks the authority to regulate, it equally lacks the power to preempt state law."

For her part, Democratic FCC Commissioner Jessica Rosenworcel said in a statement that the decision "vacates the FCC's unlawful effort to block states and localities from protecting an open internet for their citizens."

Gigi Sohn, a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy who previously worked for former Democratic FCC Chairman Tom Wheeler, also said in a statement that the ruling means "states are now free to do what the FCC will not – assert authority over the broadband market."

In an Oct. 1 tweet, however, FCC Chief of Staff Matthew Berry wrote some people "are wrongly claiming that the FCC can't stop states from adopting Title-II like rules." Berry pointed to the decision's language on conflict preemption to suggest that it has the authority to preempt state laws.

California

One state where the ruling is likely to play a role is California. In 2018, California agreed to delay implementation of a net neutrality law that aims to prohibit fixed and mobile broadband providers from blocking or throttling legal internet traffic or prioritizing certain traffic in exchange for payment while the D.C. Circuit heard the appeal. The law would also ban some "zero-rating" practices that exempt certain internet traffic from counting toward a customer's data cap.

Senior FCC officials told reporters that it was too soon to determine what next steps the agency would take in response to the ruling and how it could impact a legal challenge from the U.S. Department of Justice to the California law.

However, Scott Wiener, a Democratic state senator in California who authored the California net neutrality law, said in an Oct. 1 tweet that he believes the ruling means that his bill "remains intact & isn't preempted."

Congress

Rep. Greg Walden, R-Ore., who serves as ranking member for the U.S. House Energy and Commerce Committee said in a statement that Republicans on the committee were "disappointed with the Court further confusing the role of the states in setting the rules of the road."

Instead, Walden said a bipartisan solution should be reached in Congress to resolve the issue.

An effort in Congress to overturn the rollback of net neutrality rules and reclassify broadband as a Title II telecommunications service, which would give the FCC more authority to regulate broadband service providers, appears to have stalled. Senate Majority Leader Mitch McConnell, R-Ky., reportedly called the largely Democratic-backed bill "dead on arrival" in the Senate chamber after it passed the House in April.

Senior FCC officials told reporters after the announcement of the Oct. 1 ruling that FCC Chairman Ajit Pai also still believes that in an ideal scenario, Congress would step in and resolve the issues once and for all.