Possibilities and Pitfalls for State Regulation of Net Neutrality in the Wake of Mozilla v. FCC

       Last week, the Court of Appeals for the D.C. Circuit handed down its long-awaited ruling in Mozilla v. Federal Communications Commission (FCC). In the decision, the court upheld the FCC’s repeal of certain so-called “net neutrality” regulations that blocked internet service providers (ISPs) such as Comcast and AT&T from, among other things, charging consumers for access to different kinds of content or services and prioritizing some types of internet sites over others. Notably, however, the court also rejected the FCC’s right to deprive states of their own power to enact net neutrality protections, thus ensuring that the debate over net neutrality will likely continue in statehouses across the country.

The ruling presents numerous possibilities for states to take the lead in legislating on the issue of net neutrality, but pitfalls also abound. One such opportunity open to states would be passing narrowly-tailed legislation to curb certain practices they deem harmful to their consumers, such as so-called “zero-rating” programs where companies exempt their own streaming services from monthly data limits applicable to other providers. Indeed, California’s recently-passed net neutrality bill banned certain kinds of these programs in addition to other abusive practices and has been hailed as one of the strongest net neutrality bills in the country. States across the country will be able to look to California as a model for advancing their own provision-specific net neutrality legislation. In fact, 34 states (and the District of Columbia) have already introduced some kind of open internet legislation with related protections.

In addition to state legislatures, governors will also be able to take action on net neutrality, with the governors of Montana and New York signing executive orders protecting net neutrality principles as recently as last year. For instance, Montana’s governor Steve Bullock signed an executive order providing that any ISP in Montana with a state government contract is prohibited from charging additional fees to customers for faster delivery of websites. Similarly, New York’s governor signed an executive order requiring ISPs to adhere to broad net neutrality principles and mandating that ISPs will not “block, throttle, or prioritize internet content or applications or require . . . end users [to] pay different or higher rates to access specific types of content or applications. However, the state-based approach outlined above is not without its challenges.

Importantly, perhaps the biggest risk this approach presents is the prospect of having a patchwork of various different state laws around net neutrality. Since internet service by its very nature is delivered across state lines, this has the potential to frustrate broadband delivery. Accordingly, an important hurdle to overcome will be coordinating the various state laws into a unified, cohesive framework. These laws, in turn, will be able to serve as a model for legislation at the federal level to comprehensively address net neutrality. Currently, there is no nationwide prohibition in place stopping an ISP, from slowing down, blocking access or charging fees for access to online content as it deems fit

Making matters worse, net neutrality supporters point to a recent study published this year from Northeastern University and the University of Massachusetts at Amherst finding that major ISPs such as AT&T, Sprint, T-Mobile and Verizon have all artificially slowed down online videos from certain services like Netflix and YouTube. Even more troubling, supporters also point to a disturbing incident where Verizon was alleged to have throttled the Santa Clara Fire Department’s service during the recent California wildfires, negatively impacting the agency’s ability to deliver emergency services to residents during the fires. The department reportedly experienced reduced speeds on their mobile devices and had to sign up for more expensive plans to have their speeds restored. As these and other similar events clearly demonstrate, there is much at stake in the net neutrality debate, and the D.C. circuit’s ruling last week all but ensures that the fight for a free and open internet will continue, albeit at the state level. However, as state action around net neutrality gain further traction, this could ultimately move Congress to enact federal legislation to address the head on.

Winston Hanks

October 9, 2019