Ajit Pai wins (and loses) in court as net neutrality repeal is mostly upheld

A federal appeals court today upheld the Federal Communications Commission’s repeal of net neutrality rules but said the FCC cannot preempt state net neutrality laws.

“We uphold the 2018 Order, with two exceptions,” the judges’ ruling said. “First, the Court concludes that the Commission has not shown legal authority to issue its Preemption Directive, which would have barred states from imposing any rule or requirement that the Commission ‘repealed or decided to refrain from imposing’ in the Order or that is ‘more stringent’ than the Order.

” The FCC “ignored binding precedent” when making its preemption order, and “that failure is fatal” to the preemption, judges wrote.

This is a big win for California and other states that passed their own net neutrality laws after the FCC repeal. California agreed to delay enforcement of its net neutrality law until after litigation is fully resolved, so the state likely won’t enforce the law just yet. But after appeals in the FCC case are exhausted, we could see California and other states enforcing net neutrality rules that prohibit Internet service providers from blocking or throttling lawful Internet traffic and from prioritizing traffic in exchange for payment.

In today’s ruling, judges remanded the repeal order to the FCC, saying that the agency has to do more justification of the net neutrality repeal. But importantly, judges remanded the order to the FCC  and said that the FCC’s opponents’ objections are “unconvincing for the most part.” That means the FCC decision to deregulate broadband at the federal level and eliminate net neutrality rules is still in effect.

The decision was made with a 2-1 vote by a three-judge panel at the US Court of Appeals for the District of Columbia Circuit. The decision could be appealed to the full Court of Appeals and eventually to the Supreme Court.

Pai issued a statement celebrating the order. “The court affirmed the FCC’s decision to repeal 1930s utility-style regulation of the Internet imposed by the prior Administration… We look forward to addressing on remand the narrow issues that the court identified,” Pai said. Pai’s statement did not address the court ruling against the preemption of state laws.

On remand, the FCC must address three problems with the net neutrality repeal. Specifically, judges wrote that the FCC “failed to examine the implications of its decisions for public safety” and failed to “sufficiently explain what reclassification will mean for regulation of pole attachments.” The FCC also did not address opponents’ concerns about the effect deregulation will have on the FCC’s Lifeline program that subsidizes phone and Internet access for low-income Americans, judges wrote.

But judges did not dispute the FCC’s decision to classify broadband as an information service instead of a telecommunications service. Classifying broadband as an information service essentially deregulated the industry and helped the FCC repeal the core net neutrality rules. Judges said that the FCC decision to reclassify broadband was “a reasonable policy choice.”

Pai’s FCC voted to reclassify broadband and eliminate net neutrality rules in December 2017, leading to the rules coming off the books in June 2018.

The FCC repeal was challenged in court by a coalition of state attorneys general, consumer advocacy groups, and tech companies such as Mozilla and Vimeo. Oral arguments were held in February 2019.

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