DC Circuit Ruling Won't Stop ISPs Fighting Vermont, California

California and Vermont had agreed to pause enforcement of their laws while the D.C. Circuit case was pending, after each state was sued by national and regional ISP groups. “The California and Vermont cases will be held in abeyance until all judicial remedies have been exhausted -- in other words, until the rehearing and certiorari processes have run their course," a USTelecom spokesperson emailed Tuesday. DOJ, which separately sued California, declined comment. The two states’ attorney general offices didn’t comment.

Vermont’s law “will be able to go into place,” and “net neutrality will go forward,” state Sen. Virginia Lyons (D) told us. Lyons was lead sponsor of the state’s bill limiting procurement. “Net neutrality remains the law in CA!” tweeted California State Sen. Scott Wiener (D), who wrote that state’s bill. Wiener is disappointed the court largely upheld the FCC repeal, but thrilled it didn’t support pre-emption, said his statement: “The FCC simply has no power to order states not to protect consumers.”

The ruling appeared to support state-level net neutrality laws, emailed National Regulatory Research Institute Telecom Principal Sherry Lichtenberg: “It remains to be seen whether the decision will encourage other states to follow suit, although the decision may provide some with an incentive to do so.” California, Colorado, Maine, Oregon, Vermont and Washington state enacted net neutrality bills, and Montana, New York, New Jersey, Hawaii, Rhode Island and Vermont governors signed executive orders. California and Washington enacted comprehensive rules, while others limited procurement or restricted broadband funding to ISPs that violate open-internet principles.

“Today's decision blocks the FCC's effort to preempt state net neutrality laws through regulation,” said California Attorney General Xavier Becerra (D) in a statement. “This decision also underscores the FCC's failure to adequately consider public safety concerns, or impacts on low income Americans.” Washington state's law "stands," said Washington AG Bob Ferguson (D). New York AG Letitia James (D) is reviewing the decision, a spokesperson said. They were among more than 20 Democratic AGs from states and the District of Columbia that sued the FCC at the D.C. Circuit.

The ruling "confirmed that states can protect their citizens when the federal government fails them," noted Montana Gov. Steve Bullock (D), who signed an EO in January 2018. “Montana was the first to act, setting off a nationwide movement of executive orders and state laws to protect the open internet.” The presidential candidate said Montana's order is working. Washington Gov. Jay Inslee (D), who enacted the first state law, tweeted applause. Colorado Gov. Jared Polis (D) likes "the portion of the ruling pertaining to state-level policies such as Colorado’s,” emailed a spokesperson.

New Jersey Gov. Phil Murphy (D) "is reviewing today’s decision to determine how to proceed in order to ensure New Jersey residents have open and equal access to the internet," a spokesperson said. New York "put its money where its mouth is" with the EO by Gov. Andrew Cuomo (D), a spokesperson said.

Congress

U.S. lawmakers entrenched themselves further in longstanding positions, including on reclassifying broadband as a Communications Act Title II service. The decision “increases the urgency for Congress to pass” the Save the Internet Act (HR-1644/S-682) “and make net neutrality the law of the land once and for all,” said Sen. Ed Markey, D-Mass., during a call with reporters. Markey is a lead sponsor of the measure, which would reverse FCC rescission and reinstate Title II reclassification (see 1904100062).

“I’m urging” Senate Majority Leader Mitch McConnell, R-Ky., “to stop the obstruction” of the measure (see 1906110038) “and allow a vote immediately,” Markey said. “The future of the internet depends on it. The fight is on.” McConnell pronounced S-682 “dead on arrival” in the Senate in April (see 1904090045). The House passed HR-1644 on an almost uniformly party-line 232-190 vote (see 1904100062).

Senate Commerce Committee Chairman Roger Wicker, R-Miss., and Sen. Kyrsten Sinema, D-Ariz., touted their working group’s bid to write a bipartisan net neutrality measure (see 1903120078). The ruling “makes clear that Title II regulations are not required for maintaining an open internet,” Wicker said. “It is incumbent on Congress to pass federal net neutrality standards … that will not change based on who occupies the White House.”

House Commerce Committee Chairman Frank Pallone, D-N.J., and House Communications Subcommittee Chairman Mike Doyle, D-Pa., said the ruling “reiterates that the Senate needs to act quickly to pass” S-682, which would “put Americans, not corporations, first.” The FCC's order “continues to harm consumers and small businesses, leaving a few large corporations in control of an essential component of modern life,” Pallone and Doyle said.

House Commerce ranking member Greg Walden, R-Ore., and House Communications ranking member Bob Latta, R-Ohio, repeated their calls for a compromise bipartisan net neutrality measure not based on Title II. Walden, Latta and House Consumer Protection Subcommittee ranking member Cathy McMorris Rodgers, R-Wash., filed a trio of net neutrality bills they touted ahead of HR-1644's introduction as alternatives that didn't involve Title II reclassification (see 1902070056).

It’s “clearer than ever that Congress needs to come together and craft bipartisan legislation to provide consumers certainty and preserve one national standard,” Walden said. “We are disappointed with the Court further confusing the role of the states in setting the rules of the road. A patchwork of state regulations will hamper innovation, creating confusion and compliance nightmares.” Latta hopes “today’s ruling provides the impetus to bring both sides together.” House Commerce Republicans “have shown our willingness to come to the table” on net neutrality but committee Democrats “chose to go it alone earlier this year, and we’ve seen very little progress since,” he said.

What's Ahead

Incompas CEO Chip Pickering echoed many other communications sector officials in calling for a “bipartisan path forward.” He acknowledged to reporters reaching compromise remains difficult. It will be a “challenge” to “find a consensus” on the legal basis for a net neutrality statute that can get the 60 votes in the Senate needed to invoke cloture on legislation and gain support from President Donald Trump, Pickering said. OMB said in April it would recommend Trump veto HR-1644/S-682 if it reaches his desk (see 1904080062).

Communications sector lobbyists see no reason to believe the ruling changed the political dynamics that make net neutrality legislation so difficult to advance. Many pointed to the 2020 presidential campaign season as a major reason stasis is likely. The campaign cycle is inherently going to make it difficult for Congress to enact any major legislation next year as both parties become less willing to reach compromises opponents could tout as a victory, lobbyists said. Democrats believe net neutrality could become an important campaign issue once the general election campaign begins next fall (see 1909040061).

“The states are now free to do what the FCC will not -- assert authority over the broadband market and protect an open Internet,” said Gigi Sohn of the Georgetown Law Institute for Technology Law and Policy in a statement. “Broadband providers will inevitably complain about having to comply with a so-called ‘patchwork’ of different state laws, but that is of their own making.” She called for Congress to pass HR-1644/S-682.

"The decision does NOT say there's no preemption," tweeted International Center for Law & Economics President Geoffrey Manne. "It's virtually inevitable that every state law will be preempted. The court just says that has to be done case-by-case." American Enterprise Institute's Daniel Lyons agreed: "The state initiatives are still subject to conflict preemption, which is rooted in the Supremacy Clause itself."