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02.06.18

States dialing up efforts to restore net neutrality protections

The decision by the Federal Communications Commission (FCC) to roll back the net neutrality rules it established during the Obama era has many critics. A flurry of executive orders, state legislation and legal posturing in recent weeks have signaled that many of the strongest proponents of net neutrality safeguards are governors, state legislators and attorneys general across the country. State actions to combat the FCC’s desire for a “light-touch” with respect to regulation of the internet will start taking effect in the coming months and promise to test the limits of state authority in the online world.

As we explained in a December blog post, when the FCC issued its Restoring Internet Freedom Order on January 4, 2017, the agency repealed its own rules under the Open Internet Order of 2015 that prevented Internet service providers (ISPs) from blocking access to certain websites, limiting the speed of access to websites or charging more to deliver certain preferred content at higher speeds. Broadly speaking these core aspects of “net neutrality” were intended to constrain commercial actors from prioritizing certain websites, content or users over others; however, critics contend that a net neutrality regulatory regime inhibits market forces that otherwise promote competition and innovation. Tech giants tend to favor net neutrality, while ISPs do not, but recent polling suggests that a vast majority of the American public opposes the FCC’s repeal of net neutrality rules.

In response to this widespread dissatisfaction, state actors are stepping up to combat the FCC repeal. One potent line of attack has been the use of executive orders to quickly impose net neutrality requirements on certain ISPs with state contracts. Governor Steve Bullock of Montana was the first to issue an order last month, which will apply to new and renewed government contracts signed after July 1, and Governor Andrew Cuomo of New York followed shortly thereafter with an order that applies to new and renewed contracts signed after March 1.  This week, New Jersey Governor Phil Murphy joined the effort and signed an executive order requiring all ISPs doing business in New Jersey to adhere to the principles of net neutrality and stating that New Jersey will only contract with ISPs who support a free and open internet.  These executive orders are narrowly tailored to evade federal preemption concerns, but they could prove effective since many large ISPs (such as AT&T, Verizon, Time Warner and Frontier) will be subject to the rules when serving customers in Montana and/or New York. Gov. Bullock also posted a template of his executive order online to make it as easy as possible for other governors to follow his lead.

State legislatures are also getting into the action. As of January 2018, at least 17 states have proposed net neutrality bills seeking to prohibit ISPs from blocking, throttling or degrading internet traffic; engaging in paid prioritization of certain websites; or unreasonably interfering with a user’s ability to access the internet. These bills are almost certain to invite legal challenges from the FCC on preemption grounds, and many commentators are concerned about a patchwork of state regulation becoming unworkable for ISPs trying to provide affordable internet service across many states. However, state lawmakers continue to press forward with a wide array of bills and Senate Democrats are trying to muster bipartisan support for federal legislation as well.

It is too soon to tell if states will have success in their efforts to enact net neutrality protections, or how state action may hold up if subjected to judicial review. Perhaps in a hedge, New York’s Attorney General Eric Schneiderman is leading a group of 21 states in filing a lawsuit to challenge the Restoring Internet Freedom Order directly. The future of net neutrality remains very much in the air, but keep an eye out for developments as this is sure to remain a hot topic for months to come.