Ajit Pai Again (Falsely) Claims States Are Powerless To Protect Broadband Consumers

from the good-luck-with-that dept

For much of the last year ISPs like Comcast have been successfully lobbying to eliminate most meaningful oversight of their broadband monopolies. On the federal level, that has involved convincing Ajit Pai to neuter the FCC's authority over ISPs, then shoveling any remaining authority to an FTC that's ill-equipped to actually do the job. On the state level, that has involved lobbying Pai (who again was happy to oblige) to include language in the FCC net neutrality repeal attempting to "pre-empt" (read: ban) states from also protecting consumers.

These efforts haven't gone well so far. Charter (Spectrum) tried to lean on this language to recently wiggle out of a New York State lawsuit over terrible speeds and poor service, only to have the courts reject its argument. And lawyers have argued that when the FCC abdicated its authority over ISPs, it ironically also eroded its rights to tell states what they can do, spelling trouble for any ISP plans to kill state level net neutrality rules.

Undaunted, Pai's FCC continues to insist it has this authority anyway. Last week, the US Court of Appeals for the 8th Circuit ruled (pdf) that Minnesota's state government cannot regulate VoIP phone services offered by Charter and other cable companies because VoIP is an "information service" under federal law. Charter had sued the state PUC after it filed a complaint noting that Charter had split off its voice service from its regulated wholesale telecommunications business, dubbing it an "information service" in a bid to avoid state oversight.

Ajit Pai was quick to take a victory lap in a statement praising the ruling (pdf), insisting that the court victory portends success in the FCC's goal of stopping states from protecting net neutrality:

"A patchwork quilt of 50 state laws harms investment and innovation in advanced communications services. That’s why federal law for decades has recognized that states may not regulate information services. The Eighth Circuit’s decision is important for reaffirming that well-established principle: ‘[A]ny state regulation of an information service conflicts with the federal policy of nonregulation’ and is therefore preempted. That is wholly consistent with the approach the FCC has taken under Democratic and Republican Administrations over the last two decades, including in last year’s Restoring Internet Freedom Order."

So for one, there wouldn't be a "patchwork quilt of 50 states" trying to protect net neutrality if Pai hadn't almost-gleefully assaulted popular (and modest by international standards) federal rules. Two, Pai's endless claim that net neutrality stifles investment has never been supported by the facts. Three, you'll probably be surprised to learn that the ruling doesn't do anything close to what Pai says it does:

"The net neutrality case is being handled by the US Court of Appeals for the District of Columbia Circuit, so it will be decided by different judges. The details are also different in the net neutrality case, said attorney Andrew Schwartzman, who represents the Benton Foundation in the case against the FCC.

In the net neutrality case, "the Pai FCC definitively said that it has no jurisdiction under either Title I or Title II [of the Communications Act] to regulate broadband Internet access service," Schwartzman told Ars. "As the governmental parties explained at pp. 39-56 their brief, when an agency lacks authority to regulate, it also lacks authority to preempt.

The VoIP case also differs from the net neutrality case in that there was "no FCC decision at issue" because "the FCC has repeatedly refused to decide what regulatory classification... should be applied to VoIP," Schwartzman said. "Thus, it was left to the court to consider the question in a case between the state and Charter."

In other words, these are completely different rulings in a different court saying completely different things, something you imagine Pai (as a lawyer) would understand. And again, when the FCC killed its own ability to regulate ISPs as common carriers under Title II of the Communications Act, it simultaneously eliminated its authority to thwart states from filling the void. That's a bit weedy, but it's going to be very important should ISPs follow through on their promise to sue any states that pass their own state-level net neutrality protections.

Again, the pretense is that by killing state and federal oversight of natural monopolies, magical things will happen, ranging from more investment to lower prices and more competition. But that's not how the telecom sector works. Freeing Comcast from meaningful oversight in the absence of healthy competition only gives Comcast carte blanche to do whatever it damn well pleases. And as we've made pretty clear, what Comcast wants is to be able to find new and creative ways to rip people off with neither regulatory oversight nor competition having much of a say about it.


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  1. icon
    James Burkhardt (profile), 12 Sep 2018 @ 10:27am

    Re:

    I think, largely, the article tries to have it both ways from the beginning, just as Ajit Pai does. There is nothing new in the article. It claims that the FCC only has common carrier regulatory authority under Title II, but FCC said broadband is Title I. So far, so factual. However, it then asserts that states can not assert common carrier restrictions on Title I because that authority is exclusively in Title II. This however, puts the cart before the horse, because the argument relies on the assumption that the FCC has that regulatory authority.

    It is settled law that if Congress does not grant a regulator authority over something, it can not preempt state regulation.

    The FCC has explicitly stated congress did not give it regulatory authority over broadband. Therefore, it can not preempt state regulations over broadband. No matter what common carrier exemptions Congress gave 'information services', the FCC has no rule making authority over them, and therefore can not preempt state authority.

    And the wording of the law is misrepresented - It relies on the assertion that crongress has 'expempted' Information services from common carrier restrictions, which it didn't do. It did not grant the FCC the authority to impose Common carrier restrictions on Title I, while granting it that authority to Title II. This difference is important. Because it doesn't actually say they are exempt. Therefore there is not a federal law exempting a Title 1 service. That allows the states to regulate common carrier restrictions when the FCC has no regulatory authority over a Title I service.

    The issue of purchasing power is a funny one. The ruling effectively states that the state can not choose to make purchasing decisions based on the law abiding nature of the contractor, which seems...odd. Esp since it seems the issue is one of it being a law rather than an informal policy. If a state announces it will end its contract to purchase goods with a contractor due to recently exposed unethical behavior (say knowingly exposing employees to poisonous environs without proper protection in violation of OSHA), can they not do that? If they choose to not say anything, but don't renew and an FOIA request reveals the decision is based on the federal law violation, could they be penalized? Are they required to continue to purchase as soon as massive regulatory violations occur to prevent lawsuits? The core of the decision, that the state choosing to not do business based on regulatory violations is not normal market function, seems to incentivize some weird behavior.

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