Is A March Vote On Net Neutrality Coming?

Jan 19, 2024

By Ted Hearn, Editor of Policyband

Washington, D.C., Jan.19, 2024 – With the comment period closed, the Federal Communications Commission is on the cusp of adopting Net Neutrality regulations for the first time in eight years.

Under the rules, the FCC intends to classify wireline ISPs as telecommunications service providers subject to a host of restrictions, including: a ban on content blocking and throttling plus a prohibition on paid prioritization.

This would be a dramatic departure from the light-touch approach embraced by former FCC Chairman Ajit Pai, who in 2017 overturned the FCC’s 2015 Net Neutrality rules passed under Democratic FCC Chairman Tom Wheeler.

In September, Democrats took majority control of the FCC, giving Chair Jessica Rosenworcel the power to call a vote at any time. In reality, a vote can’t occur too soon because FCC staff needs to digest reams of comments and then draft a final order that typically includes fixes and edits submitted by interested parties.

Here’s a rundown on the big issues and battles associated with Rosenworcel’s comprehensive playbook to put broadband ISPs under close federal supervision:

Timing: Expect the FCC to move quickly – perhaps in March – to get the Net Neutrality rules on the books fast. A prolonged soap opera over Net Neutrality when the outcome is certain is not in Rosenworcel’s interest – not when she needs to focus on the possible sunset of the $14.2 billion Affordable Connectivity Program (ACP) in April.

Litigation: Broadband ISPs will swagger into court confident the Supreme Court’s new Major Questions Doctrine curbing bureaucratic benders will torpedo Net Neutrality. The outcome in the Chevron Doctrine case heard Wednesday by the Supreme Court could supply Net Neutrality foes with even more ammunition. ISPs’ legal challenge could prove so airtight that a court just might issue an injunction, which would bring Net Neutrality to a screeching halt.

Congress: With the Senate controlled by Democrats and the House by Republicans, Capitol Hill is no threat to the FCC as it has been in the past. For instance, the FCC does not need to fear repeal of Net Neutrality under the Congressional Review Act – which is how the Wheeler FCC’s broadband privacy rules were scuttled in 2017. A hostile rider to a spending bill is always possible, but seems doubtful in 2024.

State Preemption: Many states don’t want Net Neutrality to interfere with their ability to regulate broadband ISPs. ISPs favor national rules over a patchwork scheme varying from state-to-state. “Broad preemption will ensure uniformity and prevent states from overruling federal broadband policy,” T-Mobile told the FCC. Although the FCC’s proposal supports national rules, Rosenworcel did praise California’s court victory defending the state’s 2018 Net Neutrality law.

Small ISP Exemption: Small ISPs want a blanket exemption from Net Neutrality, saying they neither pose a threat to the open Internet nor have the resources necessary to afford compliance. Although the FCC says it’s concerned about burdensome regulation of small ISPs, its 2015 Net Neutrality rules, for which Rosenworcel voted, did not cut them a break. “The record demonstrates that smaller providers lack market power to engage in harmful conduct and thus should not be subject to heavy-handed utility-style regulation,” WISPA, a trade association for small wireless ISPs, told the FCC.

Universal Service Fund (USF): The FCC is not planning to require broadband ISPs at the outset to contribute to the financially troubled USF subsidy program. But that might change if Rosenworcel decides to use USF money to keep the ACP on life support to ensure millions of low-income households stay connected to the Internet. Dunning ISPs to support the USF while Big Tech continues to enjoy an exemption might be a grueling fight that Rosenworcel, in the end, opts to avoid. Plus, a constitutional challenge to the USF could land in the Supreme Court later this year.

General Conduct Standard: This proposed regulation, according to the FCC, “would prohibit practices that unreasonably interfere with or disadvantage consumers or edge providers.” ISPs probably have more trouble with this regulation than all the others because it is not a bright-line rule like “no blocking” or “no throttling.” The FCC intends to field complaints and establish policy based decisions in individual cases. “Re-imposing the open-ended general conduct rule would be harmful to innovation and investment, and it would be unlawful,” CTIA, a trade association for wireless carriers, told the FCC. Because Wheeler’s 2015 rules had the General Conduct Standard, expect the 2024 rules to do the same.

Rate Regulation: “This is not a stalking horse for rate regulation. Nope. No how, no way. We know competition is the best way to bring down rates for consumers,” Rosenworcel declared last October. Yet, lawyers for ISPs point out that the FCC plans to review ISP practices under provisions that could involve rate regulation. Republican FCC Commissioners Brendan Carr said in October, “There is no more surefire way of killing off investment and innovation than putting price controls squarely on the table. Adjudicating broadband rates under a 'just and reasonable' standard should be a nonstarter.” On this one, it's a matter of wait and see.

Of course, many more issues remain unsettled. But it is highly unlikely Rosenworcel will move at something less than full speed.