NARUC Mulls State Impacts from Possible Title II Reclassification

LA QUINTA, Calif. -- The FCC seemed more open to collaboration with states in its final NPRM for its rulemaking to possibly reclassify broadband as a Title II service, a California Public Utilities Commission staffer said during a panel Tuesday at NARUC’s meeting here. NARUC Telecom Committee Chairman Tim Schram told us Monday that the state regulator association would probably have a resolution about the FCC net neutrality rulemaking at its February meeting in Washington (see 2311130063).

What a possible return of FCC open internet rules would mean for a half-dozen states’ net neutrality laws remains unclear, said CPUC Communications Division Director Rob Osborn. “It’s hard to say at this point because we’re still in the early stages of the FCC’s proceeding.” However, he said the FCC’s final NPRM sounded “more collaborative” to states than the first draft, which raised concerns about having a patchwork of state requirements (see 2309280056). California enacted a 2018 law that regulates net neutrality and zero rating.

The FCC’s final NPRM asked about what issues the FCC is required to share regulatory responsibility with states and what issues can benefit most from shared regulatory responsibility, said Osborn. “This is a great and very important issue,” as public safety and consumer protection “are core functions of the state,” the CPUC staffer said. California’s law restricted providers from allowing “public health and safety functions to be held hostage during interconnection or contract disputes,” noted Osborn. Public safety arose in 2018 when Verizon slowed traffic for Santa Clara County firefighters during a wildfire (see 1808220059), the California official said. “The data restriction basically rendered useless some basic visual functions,” though Verizon claimed the issue had nothing to do with net neutrality.

Should the FCC return to Title II classification, “the consequence would not be an automatic delegation of authority to the states to regulate [the] internet,” Osborn noted. “It also would not constitute regulation of the internet, but rather regulation of the means by which traffic on the internet moves.” The FCC specifically forbore rate regulation in the 2015 open internet order “and is likely poised to do so again.”

Net neutrality rules across different states appear “consistent with each other,” said the panel’s moderator, Massachusetts Department of Telecommunications and Cable Commissioner Karen Charles. “Why is industry concerned about state action?”

But rules in various states are inconsistent, argued communications industry attorney Matt Murchison of Latham & Watkins. Even shared terminology could be interpreted in different ways, he said. Some but not all state rules include a general conduct standard that says not to unreasonably disadvantage end users’ access to content or content providers’ access to end users, noted Murchison. California “swept interconnection into the net neutrality debate,” and some states don’t carve out “reasonable network management,” he added.

Policymakers haven’t been able to point to any “real instances of harm” with the current Title I classification of broadband, said Murchison. The internet was treated as an information service for all but the two-to-three years between the 2015 and 2018 FCC orders, the lawyer said. "The common carrier treatment of broadband really was a swerve."

NARUC passed multiple resolutions on net neutrality over the years. A 2014 resolution encouraged the FCC to craft net neutrality rules using Communications Act Section 706 as its main legal justification, with Title II authority as a backup (see 1407160087). A 2015 resolution called for congressional action (see 1507140074).

It’s “premature” to say whether NARUC’s position will change, Schram told us Monday. “We’ve got some new Telecom Committee members since the last time.” With net neutrality, “you’re talking about … how far do you go?” said the Republican from the Nebraska Public Service Commission. “Do you want heavy-handed regulation, light-touch regulations [or] somewhere in between?” Schram said he thinks “major policy still has to come at the federal level” because the internet and broadband are interstate and nationwide. “There needs to be a framework. If states do get some level of regulatory authority … it has to be consistent from state to state,” so industry doesn’t have to comply with a patchwork.

Congress should continue the affordable connectivity program (ACP) with “guardrails” to ensure funds are used wisely, said Schram. “The big question is how much speed does someone really need” for homework and other “life-essential things,” he said. The Republican doesn’t consider funding ACP a political issue, he said. Rather, it’s about “what meets the demands of the public interest” and “not going beyond that.” Pennsylvania Public Utility Commission Chairman Stephen DeFrank, another Telecom Committee member, urged Congress to renew ACP in an interview this week (see 2311140035).

The Nebraska PSC soon plans to set hearings on two probes into big 911 outages from September involving Lumen and Windstream (see 2309120046), said Schram. “Our entire commission takes that very seriously, and we fully expect answers from these investigations.” The commission also soon plans to analyze problems with landline service quality, he said.