Industry Groups: FCC Net Neutrality Order Likely Will Fail in the Courts

Congressional Democrats and Republicans again divided sharply along well-worn partisan lines in their reaction to the FCC’s vote. The return to Title II reclassification is “just the latest attempt by Democrats to assert more federal government control over people’s lives,” said House Commerce Committee Chair Cathy McMorris Rodgers, R-Wash, and Communications Subcommittee Chairman Bob Latta, R-Ohio. “Republicans will take steps to hold the FCC accountable -- including with the introduction of a” Congressional Review Act resolution of disapproval (see 2404180058) “as we work to stop the agency’s efforts to reimpose regulations that will hinder our ability to close the digital divide and lead the world in next-generation wireless technology.”

“Today the FCC has rightfully reclaimed its authority over broadband internet, correcting the Trump administration’s unpopular, misguided dereliction of the FCC’s responsibility to ensure a free and open internet for all Americans,” commented House Commerce ranking member Frank Pallone, D-N.J., and Communications ranking member Doris Matsui, D-Calif. “Today’s action will empower the agency to protect consumers from unreasonable and unjust practices, while also promoting competition in the broadband marketplace and ensuring a secure and reliable internet Americans can depend on.” Sens. Ed Markey, D-Mass., and Ron Wyden, D-Ore., said the FCC is “delivering on the opportunity, accessibility, affordability, and empowerment that are the hallmarks of a free and open internet” despite the “efforts of greedy internet service providers and big telecommunications corporations.”

NCTA President-CEO Michael Powell called the order a "politically-motivated reversal of prior law" as part of a "long-running campaign to establish FCC control of the internet." Powell predicted the courts will overturn it. Similarly, Information Technology and Innovation Foundation Director-Broadband and Spectrum Policy Joe Kane said the order is "unlikely to survive."

"These 400-plus pages of relentless regulation are proof positive that old orthodoxies die hard," said USTelecom President-CEO Jonathan Spalter. "Just two and a half short years ago we stood together for universal connectivity," Spalter said. Title II "does nothing to advance that shared objective." Spalter described net neutrality as a "nonissue" for consumers and said policymakers should "keep their eyes on the real-world prize of building opportunity for everyone in a hyperconnected world."

The FCC is "creating mountains of uncertainty for smaller broadband providers," said ACA Connects President-CEO Grant Spellmeyer, adding they will "be forced to shift much-needed investment dollars away from their networks to pay for expensive regulatory compliance costs." NTCA CEO Shirley Bloomfield said she was "deeply concerned about the implications of how the FCC might exercise forbearance when it comes to universal service contribution obligations in the context of this order."

Title II reclassification "is likely the most momentous power grab by the administrative state thus far in the 21st century," said Free State Foundation President Randolph May. The FCC doesn't "even try to justify its action," May noted, saying the order "almost certainly is unlawful" and will fail under the U.S. Supreme Court's major questions doctrine.

Title II is "much more than net neutrality," said International Center for Law & Economics Senior Scholar Eric Fruits. The FCC's rule is "a sharp reversal from decades of light-touch regulation," Fruits said, and industry would "face the yoke of onerous federal regulation and meddling that would stifle and slow future investment and experimentation." The American Consumer Institute warned the rules will be "a disaster for investment, deployment, and access."

Several groups raised issues with the commission's decision granting ISPs forbearance from contributing to the Universal Service Fund. "This is a missed opportunity that could have been used to put USF on a more sustainable footing for the years ahead," said Derrick Owens, WTA senior vice president-government and industry affairs. The FCC "would have needed to develop a mechanism to do so," he added, "which could have been part of a future proceeding."

Consumer groups welcomed the order. "Despite a few shortcomings, this is the most important thing the FCC can do to promote free speech, competition, public safety, and national security," said Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman. While the group would have preferred that ISPs weren't granted forbearance from USF contributions and take a "more proactive stance" toward wireless carriers, Schwartzman said "those shortcomings do not change the fact that today is a great day for internet freedom."

The rules "strike the right balance between ensuring robust, reliable broadband while fostering continued innovation in the services that carriers offer," said Stephanie Joyce, Computer & Communications Industry Association chief of staff. The FCC "now has the ability to protect internet users from ISPs' privacy invasions, promote broadband competition and deployment, and take action against hidden junk fees, data caps and billing rip-offs," said Free Press Co-CEO Craig Aaron.

Consumer Reports Director-Technology Policy Justin Brookman praised the order, saying providers have "proven over the years that without proper oversight, they will not hesitate to use their power to increase profits at the expense of consumers.”