Regulatory classification

In late October, the Supreme Court quietly declined to review Lipschultz v. Charter Advanced Services, an Eighth Circuit decision that preempted state regulation of fixed Voice-over-Internet-Protocol (VoIP) service. While concurring in the denial of certiorari, Supreme Court Justice Clarence Thomas wrote separately to challenge the underlying theory of federal preemption, noting that “it is doubtful whether a federal policy — let alone a policy of nonregulation — is" sufficient to establish conflict preemption.

States and local governments may be able to mandate their own network neutrality rules. Governors in six states – HI, MT, NJ, NY, RI, and VT – have already signed executive orders enforcing net neutrality by prohibiting state agencies from doing business with internet service providers that limit customers’ online access. Four states have passed their own laws requiring internet companies to treat all online content equally: CA, OR, WA, and VT.

The Federal Communications Commission's Orwellian-named “Restoring Internet Freedom” order all-but obliterated the FCC’s authority to hold broadband internet access providers accountable for any number of bad behaviors.

Broadband policy has emerged as a way for Democrats running for President to appeal to primary voters. They emphasize their commitment to "Net Neutrality," often in its most extreme form (i.e., public utility regulation). They also promise expansive (and expensive) government-funded construction of broadband infrastructure. Neither, however, constitutes effective policy.

On Aug 8, 2019, House Appropriations Financial Services Subcommittee Chairman Mike Quigley (D-IL) wrote to Federal Communications Commission Chairman Ajit Pai to express concern about the FCC failing to act to stop abusive and unwarranted equipment rental fees for broadband service. "These unreasonable fees defy common sense and undermine the FCC's stated 'number one priority' of closing the digital divide." Chairman Quigley described a consumer in Texas who was charged a $10 "rental" fee by Frontier Communications for a router that they neither asked for nor ever received.

The US Supreme court has declined to overturn two lower court rulings that MN was preempted from regulating Charter Communications’s interconnected voice-over-internet protocol telephone service because the courts were convinced the operator had made the case for why it was an information service, not a telecommunications service, even though the Federal Communications Commission has yet to classify interconnected VoIP either way. That sounds like it would buttress the FCC’s assertion it can pre-empt state efforts to reregulate internet access, which the agency has definitely classified as

The first years of the Trump Administration have seen a resurgence in state telecommunications regulation—driven not by state institutional concerns, but by policy disagreements over net neutrality. This article addresses the broader federalism questions raised by this net neutrality clash. Part I provides an overview of telecommunications federalism from the 1934 Communications Act through the present day, looking at the division of federal and state jurisdiction over traditional telephone service, wireless telephony, and information services.

The D.C. Circuit issued its long-awaited decision in Mozilla v. Federal Communications Commission.  The court affirmed the Federal Communications Commission’s Restoring Internet Freedom (RIF) Order, identifying some flaws in the agency’s reasoning but finding the agency could likely correct those errors on remand without vacatur. Though largely expected given the Supreme Court’s precedent in Brand X, the decision is nonetheless a sweeping victory for the FCC and judicial validation of Chairman Ajit Pai’s light-touch regulatory framework for the broadband industry.

Gigi Sohn, former adviser to Federal Communications Commission Chairman Tom Wheeler, supports legislation to clarify the FCC's authority over broadband, but that unless that bill returns oversight of the market to the FCC, that is not likely to happen. She said the fight over such legislation will hinge on whether the FCC is going to oversee the market.

The seemingly interminable wait for the Court’s decision in Mozilla v. FCC is finally at an end. In its 186-page decision, the Court described how it considered economic concepts, arguments, and expert reports. It upheld the Federal Communications Commission’s 2018 Order but rejected its claimed preemption authority. As we have learned, the net neutrality debates will never die, but they may now change venue.