An appeals court decision putting Title II — more commonly referred to as “net neutrality” — rules on hold provides much-needed optimism for opponents of the regulations. There is increased hope that the rules will now be blocked from going into effect altogether.
While this may seem like an inside-the-Beltway issue, this decision could have significant ramifications for closing the digital divide. When Title II rules were previously in place, broadband investment declined for the first time in years. After they were rescinded, broadband investment grew again.
U.S. Telecom: The Broadband Association reported that 2021 saw a 20-year high of $86 billion for capital expenditures into the nation’s communications infrastructure, largely due to the regulatory status quo in recent years. The light-touch regulatory approach by the government allowed innovation to flourish. Providers could use various methods, including fiber, cable, wireless, fixed wireless, and satellite to provide broadband coast to coast.
The 6th Circuit Court of Appeals granted a temporary stay on the Title II rules on August 1. While oral arguments before the Supreme Court are expected in late October or early November, the court ruled that plaintiffs seeking to prevent the rules from being implemented are likely to succeed on the merits of their challenge. All three judges (two appointed by Democratic presidents) agreed with the decision.
The difference between this case and previous instances, when courts said Title II rules could remain in effect, is the recent case in which the Supreme Court ruled against what is known as Chevron deference, alluding to a famous environmental case. The court ruled that any statutory ambiguity ought to be resolved by the legislative branch rather than deferring to the interpretation of executive bureaucrats. Prior courts often used Chevron to uphold Title II rules. Experts anticipated the court decision would be the downfall of the Federal Communications Commission’s attempt to bring back Title II.
The court also pointed out that Title II is unlikely to pass the test of the major questions doctrine, which likewise gives the power on major policy advancements to Congress and not administrative agencies.
FCC Chairwoman Jessica Rosenworcel said after the decision that she would continue working to bring back the regulations, but the court hinted that congressional action would likely be required for net neutrality to return.
Chief Judge Jeffrey Sutton wrote in his opinion that another concern is the FCC’s continued flip-flopping on the issue, with no consistency from its experts and decisions made with partisan intent. Title II rules were introduced in 2015 under the Obama administration before being repealed two years later during the Trump administration. With President Biden in office, the FCC voted to reinstate the rules earlier this year.
“The Commission’s ‘intention to reverse course for yet a fourth time’ suggests that its reasoning has more to do with changing presidential administrations than with arriving at the true and durable ‘meaning of the law,’” Sutton wrote.
FCC Commissioner Brendan Carr celebrated the court’s decision on X, writing, “We had a good win yesterday in the ongoing effort to unwind this regulatory overreach. The work continues.”
Carr noted in a statement released after the stay that even former president Barack Obama’s former top lawyers had previously written a paper arguing that an FCC effort to bring back the rules would not withstand court scrutiny. The lawyers said the move would represent “a massive waste of resources for the government, industry and the public, as well as the lost opportunity to pursue more pressing policy goals such as deploying robust broadband service to all Americans.”
Critics of the rules-focused FCC celebrated the appeals court announcement.
“It would be so much better for America’s consumers if the commission and the Biden administration would turn away from the pursuit of fruitless aggressive regulatory endeavors … and focus their energies on policies that would speed deployment to those still waiting for the remaining broadband deployment gaps to be filled,” said Randolph May, president of the Free State Foundation.
It is hoped the court’s resistance to the FCC’s regulatory overreach will cause the commission to focus less on playing sheriff and more on closing the digital divide.
