Should the internet be regulated? This is a question that has plagued scholars, practitioners, and government officials alike for years. Proponents of regulation have argued that without regulation—such as net neutrality protections—internet service providers (ISP) can discriminate against certain online content creators by charging higher fees or slowing their websites, which in turn stifles competition. Opponents, in contrast, have argued that net neutrality discourages ISPs from investing in and improving their networks. Recently, in Mozilla Corp. v. FCC, the Court of Appeals for the District of Columbia Circuit rejected challenges—with two exceptions—to the Restoring Internet Freedom Order (“the Order”) and in doing so, approved the Trump administration’s “light-touch” regime for internet governance. Proponents of regulation have been quick to identify a silver lining: the court’s choice to vacate the Preemption Directive. But it is too soon to celebrate. As the Mozilla court alluded to, state net neutrality regulations could still be foreclosed by the Order if challenged one by one.
Congress enacted the 1996 Telecommunications Act (“the Act”) to amend the 1934 Communications Act for the first time since mobile phones and the internet were invented. Among other things, the Act granted the FCC the authority to categorize various services as “information services” under Title I or “telecommunication services” under Title II. Services that are classified under Title II have common carrier status, and by extension, are governed by net neutrality regulations. Services under Title I are functionally deregulated. Initially, the FCC classified broadband as “telecommunications services,” but in 2002, it reclassified broadband as “information services.” In 2015, after having to respond to more than 3.9 million comments, the FCC reverted to its initial position. But in its most recent 2018 Order, which was decided in a 3–2 split and received almost 24 million comments (though many were admittedly duplicates), the FCC reclassified broadband internet access again: this time, as “information services.” In response, Mozilla and a series of other stakeholders challenged the Order.
The D.C. Circuit upheld the Order with two exceptions. In a per curiam opinion, the court first upheld the reclassification of broadband internet, explaining that the characterization was “reasonable” under Chevron. The FCC had reasoned that because broadband internet is “inextricably intertwined” with Domain Name System (“DNS”) and caching, both of which are information services, broadband too must be an information service. Relying on the Supreme Court’s decision in National Cable & Telecommunications Ass’n v. Brand X Internet Services and emphasizing Chevron’s deferential standard, the court rejected petitioners’ numerous objections to the FCC’s reliance on DNS and caching and concluded that the FCC “permissibly classified” broadband as an information service. Similarly, by relying on the deferential Chevron standard, the court upheld the FCC’s classification of mobile broadband as a “private mobile service”—which exempts it from common carrier status—rejected petitioners’ arguments that the FCC should have adopted the transparency rule under Section 706 of the Act, and in turn, affirmed the FCC’s legal authority to issue a “transparency rule” under 47 U.S.C. § 257.
The court then turned to the petitioners claims that the FCC failed to adequately establish “a rational connection” between facts and decisions made in the Order. Though it rejected six of the petitioners’ nine challenges, it held that three—the FCC’s failure to consider the impact of the Order on public safety, pole-attachment regulation, and the Lifeline Program—were arbitrary and capricious and thus, remanded them for further consideration.
Finally, the court vacated the Preemption Directive, a portion of the Order that purported to preempt “any state or local requirements that are inconsistent with [the Order’s] deregulatory approach,” including “any rule or requirement that the Commission ‘repealed or decided to refrain from imposing’ . . . that is ‘more stringent’ than the Order.” The court explained that the directive exceeded the FCC’s statutory authority: the FCC did not have express or ancillary authority; the impossibility exception and nonregulation doctrine were not independent grants of authority; and the FCC itself conceded that conflict preemption did not apply. The FCC could not invent and invest power in itself that Congress had not conferred.
Judge Millett concurred, emphasizing that she only agreed with the court’s judgment because Brand X necessitated it. She argued that Brand X was “unhinged from the realities of modern broadband service” and “trapp[ed] Internet regulation in technological anachronism.” Though the D.C. Circuit could do nothing about it, “[t]he Supreme Court . . . is not so constrained.”
Judge Wilkins also concurred and in a single paragraph, fully agreed with Judge Millett’s concurrence.
Judge Williams concurred in part and dissented in part. He specifically disagreed with the court’s decision to vacate the Preemption Directive, arguing that under Chevron, the FCC had authority to establish a light-touch national regime by classifying broadband under Title I, an argument that the FCC itself never made. Establishing a national deregulatory regime without the directive would allow states to enact regulations that would functionally render broadband a Title II service, superseding the FCC’s Order and rendering it “meaningless.” This consequence, Judge Williams argued, cannot be what Congress rationally intended.
In response to Mozilla, proponents of net neutrality have mourned its rollback, but have found solace in the fact that the court vacated the Order’s Preemption Directive. FCC Commissioner Jessica Rosenworcel said: “Today’s court decision vacates the FCC’s unlawful effort to block states and localities from protecting an open internet for their citizens. From small towns to big cities . . . state and localities have been stepping in because the FCC shirked its duties.” But all the court did in Mozilla was punt. The court did not hold that the FCC Order cannot stop states from enacting more stringent laws. It merely held that the FCC could not preemptively and prematurely block all states from doing so at once.
The Mozilla court rejected the FCC’s conflict preemption argument solely because the FCC conceded that the Preemption Directive was “broader than ordinary conflict preemption.” The court in fact, acknowledged that conflict preemption had “intuitive appeal” and in dicta, provided a path by which the FCC could still achieve its intended result. The court explained that conflict preemption only applied to state law when “under the circumstances of the particular case[, it] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” A court cannot find that a state law “stands as an obstacle” if there is not a state law before it. Conflict preemption is a case-by-case, fact-specific inquiry. It is not that a specific state’s regulation cannot conflict with the objectives of Congress, it is merely that the question of conflict is “‘an issue incapable of resolution in the abstract,’ let alone in gross.”
As the dissent pointed out, “the majority offers no examples of possible state rules . . . that would not thwart the Commission’s policy objectives.” But the dissent was wrong to characterize the court’s view as “render[ing] any conflict unimaginable.” Instead, the court left the door open for every conflict imaginable. As the court expressly conceded: “the dissenting opinion . . . confuses (i) the scope of the Commission’s authority to expressly preempt, with (ii) the (potential) implied preemptive effect of the regulatory choices the Commission makes that are within its authority.” That is, if each of the fifty states were to enact more stringent internet regulations—as 80% of the American population wants—and the FCC challenged each one, the D.C. Circuit could consider each state’s laws individually and systematically hold that each was conflict preempted by the FCC’s Order, all without running afoul of the court’s opinion in Mozilla. Ultimately, the court’s decision to vacate the Preemption Directive could be rendered meaningless. Regardless, proponents of net neutrality are right: the battle over net neutrality continues.