Mozilla Appeal Not a Given, Challenged State Laws Still on Hold

FCC allies in Tuesday's federal court decision on the Communications Act Title II rollback order (see 1910010018) consider appeal unlikely. Petitioner allies are less sure. California and Vermont’s litigated net neutrality laws remain on hold, those states’ attorneys generals confirmed Wednesday.

Those that joined with or backed petitioner Mozilla are digesting the decision and hadn't made decisions. NARUC Wednesday hoped for a Supreme Court review of the reclassification decision and pointed to D.C. Circuit Judges Patricia Millett and Robert Wilkins voicing similar sentiments in the decision. Neither side likely has made a decision on appealing, blogged Public Knowledge Legal Director John Bergmayer.

Either a cert petition with the high court or a rehearing petition with the D.C. Circuit seem likely, emailed Matthew Schruers, chief operating officer of the Computer & Communications Industry Association, which backed Mozilla. "The Court has shown an appetite for reconsidering agency deference, and this case presents a clear example: flip-flopping on a clearly politicized agency action, with questionable reasoning," he said. "If Chevron means the FCC gets deference for finding that having 'fewer than two' options means consumers benefit from competition, then anything can get Chevron deference."

Electronic Frontier Foundation Senior Legislative Counsel Ernesto Falcon emailed that an FCC appeal seems unlikely. Given "how shoddy [its] claim for preemption was originally, I am not sure they would actually want to risk the Supreme Court upholding the D.C. Circuit here," he said.

FCC allies said the agency has little reason to appeal the court's striking down blanket pre-emption because it can challenge state laws like California's and Vermont's on grounds conflicting federal policy pre-empts them. Meanwhile, Mozilla allies are unlikely to appeal because SCOTUS could cement that broadband is an information service, we were told.

The Mozilla case going to SCOTUS could result in that court making a strong statement against Title II and strike down the possibility of future FCC reclassification, New Street Research's Blair Levin wrote investors Wednesday. It's unlikely ISPs will start charging edge providers, the analyst said. He predicted the status quo "cold peace" continues while everyone waits for Congress to act.

States Wait

A stay on California’s net neutrality law “remains in place, pending further action,” Democratic California Attorney General Xavier Becerra’s spokesperson emailed Wednesday. The ruling “appeared to provide solid ground for our state net neutrality law, AB 822, and AG Becerra remains committed to defending it.”

The Vermont litigation, executive order and state law “remain stayed,” said a spokesperson for Vermont AG TJ Donovan (D). “The Court vacated the FCC’s pre-emption rule. What this means is that states can now do more to protect consumers when it comes to net neutrality.”

California and Vermont AGs agreed not to enforce their net neutrality laws while the D.C. Circuit decision was pending, in exchange for challengers of the state laws pausing lawsuits against the states. DOJ and ISP associations sued California at U.S. District Court in Sacramento, while ISPs sued Vermont at U.S. District Court in Burlington, Vermont. USTelecom said Tuesday the stays stand until “all judicial remedies are exhausted,” including rehearing and certiorari processes (see 1910010044). DOJ didn’t comment.

“California’s net neutrality law should go into effect immediately,” emailed state Sen. Scott Wiener (D). “However, there is ongoing litigation, and that decision will be for the court, based on arguments by the Attorney General and the net neutrality opponents.” A spokesperson for Gov. Gavin Newsom (D) emailed, “This ruling rightfully rejects the FCC’s effort to block states like California from promoting free, open and fair internet access.”

“We need to wait for a little while to see if the FCC appeals to the Supreme Court and whether the Supreme Court accepts the case as those would be part of the conclusion to the Mozilla vs FCC case,” EFF’s Falcon emailed. “The writing is on the wall that states are going to regulate the ISPs in the absence of the FCC and not just because of net neutrality, but for public safety purposes given that they are critical services.”

Becerra probably won’t try to enforce California’s law before the D.C. Circuit case “runs its course,” Tellus Venture Associates President Steve Blum emailed: “The ball is in the net neutrality advocates' court," who must decide if appealing the D.C. Circuit decision “is more important than making California's net neutrality law enforceable.” The D.C. Circuit ruling “removes a major pillar” of ISPs’ case against the California law, the FCC’s attempt to pre-empt states, but ISPs “still have a general argument to make, based on federal authority over interstate commerce,” the local telecom consultant blogged Wednesday.

More States?

Expect New York net neutrality bill sponsors to soon convene and “redouble their push because the court has said that states can do this,” said New York Public Utility Law Project Executive Director Richard Berkley in an interview. The one Assembly-passed bill this year stalled in the Senate (see 1906050066). The next session starts in January, though New York bills can be introduced in committee before a session officially opens, he said.

The D.C. Circuit was clear that states can make laws, tweeted Democratic AGs in states that don't have net neutrality laws.

“The federal court ruling leaves it to the states to protect their consumers and uphold #NetNeutrality,” said Iowa’s Tom Miller. It “recognizes that States can protect their residents if the @FCC won’t,” tweeted Pennsylvania’s Josh Shapiro, adding he’s disappointed the court didn’t entirely strike down the FCC. Connecticut’s William Tong called the ruling “a bit of a mixed bag, but when it came to the question of state authority, the decision was clear.” Massachusetts’ Maura Healey said it “makes clear that states can take action to protect online access when the federal government won’t.”

New York is “committed to protecting our residents by treating all internet traffic equally, defending access, innovation, and competition,” AG Letitia James (D) said. “It’s unfortunate that the court has sanctioned the federal government’s abandonment of those principles.”

The ruling “confirms that the FCC cannot prevent states like Washington from protecting our consumers by enacting our own net neutrality laws,” said state Rep. Drew Hansen (D), who wrote Washington's comprehensive and bipartisan-passed law, in a statement. It was the first state to pass a bill. “Today’s decision should encourage other states to follow Washington’s lead.”

'Green Light'

"States now basically have a green light to enact whatever broadband rules they want, including net neutrality rules that go as far or further" than the FCC's 2015 order, blogged PK's Bergmayer. He dismissed the idea that challengers can still cite "conflict preemption" in challenging such laws: "What particular FCC requirements do state net neutrality laws conflict with? You’d think if the Commission had been able to think of any, it would have cited them in the litigation instead of relying on an invented and legally meaningless 'federal policy of nonregulation.'"

"Conflict preemption occurs when a state regulation conflicts with a federal policy," blogged American Enterprise Institute's Daniel Lyons. "Because the preemption flows from the Constitution itself, rather than the federal statute, future courts are free to find conflict preemption despite the Mozilla court’s rejection of express preemption." Lyons said the Communications Act gives the FCC a wide range of regulatory options from nonregulation to common carriage. "The agency picked a spot along that spectrum -- enhanced transparency coupled with general consumer protection and antitrust law -- and explained at length that more intrusive regulation could have an adverse effect on consumers and innovation. State net neutrality laws would conflict with the Restoring Internet Freedom Order’s carefully crafted federal policy in this area -- and thus would be preempted under the Supremacy Clause."

ISPs "should be quaking in their boots," said former FCC Chairman Tom Wheeler in a New York Times opinion. "They run the serious risk that they’ll have to follow a patchwork of different state requirements. The companies may not have liked the previous administration’s decision to classify them as common carriers, but that at least provided them with a uniform national policy."

More Democrats voiced displeasure Tuesday and Wednesday about parts of the D.C. Circuit’s decision. They hailed its effect on state-level statutes. They also again urged the Senate to approve the House-passed the Save the Internet Act (HR-1644/S-682). The measure would reverse FCC rescission and reinstate Title II reclassification (see 1904100062). “I am relieved that the court rejected the FCC’s attempt to stop states -- like Washington State -- from protecting their citizens online,” said Senate Commerce Committee ranking member Maria Cantwell of Washington. “But I will keep fighting for a strong federal net neutrality law and urge my colleagues to join me.”

Sen. Dianne Feinstein and two other California Democrats noted the ruling's impact on their state's law. "Hopefully, now the administration will work with California, and other states, to promote a fair and open internet," Feinstein said. "It's time for Congress to act since the FCC and the courts have failed to do so,” said Rep. Anna Eshoo. The decision “demonstrates that the Senate must act promptly to pass this critical legislation,” said Rep. Jerry McNerney.

Pre-emption

The bulk of the D.C. Circuit's reclassification ruling followed Brand X and USTelecom precedence, and it's not clear that's appealable to the Supreme Court, said Phoenix Center President Larry Spiwak. There's no circuit court split to indicate SCOTUS would take the case, he said. He said the D.C. Circuit was clear it never made a definitive statement about the reasonableness of reclassification, just whether the FCC was reasonable in doing so.

Spiwak said the public safety issue remanded to the FCC could be handled with a rulemaking. The FCC isn't seen likely to be in a rush to tackle that (see 1910020050). He said the pole attachment and Lifeline issues remanded exposed a longstanding FCC issue of dancing around how reclassification could affect such issues.

Mozilla allies disputed that the D.C. Circuit's axing FCC blanket pre-emption leaves it with other pre-emption options. PK's Bergmayer emailed it's "just self-serving spin from the FCC and its allies. There are no rules on the books for state net neutrality laws to conflict with."

Politics and money also could motivate an appeal by petitioner allies, said American Enterprise Institute visiting scholar Roslyn Layton, who filed an amicus brief backing the regulator. Net neutrality litigation "has been a big moneymaker for K Street firms," she said. Democrats used net neutrality successfully as a fundraising issue, meaning "there's not an interest to ever resolve this," she added.