The DOJ's New Net Neutrality Lawsuit Is A Giant Middle Finger To State Rights, Consumers, Competition & The Democratic Process

from the straight-up-bullshit dept

So let's be clear about something: the Ajit Pai FCC's repeal of net neutrality was already a mammoth fuck you to the American public, open competition, and a healthy internet. The effort to neuter the rules was based on bogus telecom lobbyist data, lots and lots of shady behavior, and oceans of complete nonsense. And while folks like Ajit Pai like to speak loftily about his noble effort to "strip away burdensome regulations," the reality is that killing net neutrality served one real purpose: giving natural telecom monopolies the green light to (ab)use a broken, uncompetitive broadband market to screw consumers and competitors alike.

When the FCC killed these overwhelmingly popular consumer protections it wasn't just killing net neutrality, it was killing the federal government's ability to adequately hold lumbering telecom monopolies accountable on the federal level. In addition to neutering the FCC and shoveling any remaining, fleeting oversight to an FTC ill-equipped for the job, ISPs convinced the Trump administration to also try to prevent states from filling the void. As such, both Comcast and Verizon successfully lobbied the FCC to include language in the net neutrality repeal "preempting" (read: banning) states from holding giant ISPs accountable as well.

Again the goal here is obvious: to eliminate any meaningful state or federal oversight of natural telecom monopolies, which will now be left unchecked by neither regulatory oversight nor meaningful competition.

This little gambit came to a head over the weekend, when California Governor Jerry Brown signed the state's shiny new net neutrality law. That law took an incredible collaborative effort to pass, after ISPs tried to neuter most of the bill's key components via procedural gamesmanship, and even took to lying to senior citizens about the proposal in misleading robocalls. The public backlash to these efforts forced the California Assembly and Senate to pass the law in late August, before Brown (amid some uncertainty) signed the bill yesterday afternoon.

Within hours of Brown's signing the bill, the Department of Justice announced it would be suing California, insiting that California's consumer protections were, mystically, somehow "unlawful and anti-consumer":

"Under the Constitution, states do not regulate interstate commerce—the federal government does. Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order. We will do so with vigor. We are confident that we will prevail in this case—because the facts are on our side ."

You might be shocked to learn that no, the facts are most assuredly not on the Trump administration's side, here.

The DOJ's twelve page complaint (pdf) leans heavily on the state-preemption language, insisting that FCC authority preempts any state authority over broadband. As a result, the DOJ argues, states can do nothing but stare dumbly at the problem as the FCC abdicates its authority over broadband consumer protection at the direct behest of lumbering telecom monopolies:

"...the 2018 Order expressly “preempt[s] any state or local measure that would effectively impose rules or requirements that [it] ha[s] repealed or decided to refrain from imposing in this order or that would impose more stringent requirements for any aspect of broadband service that [it] address[es] in this order." This includes “any so-called ‘economic’ or ‘public utility-type’ regulations, including common-carriage requirements akin to those found in Title II of the Act and its implementing rules, as well as any other rules or requirements that [the FCC] repeal[ed] or refrain[ed] from imposing” in the 2018 Order."

Here's the ironic bit. Legal experts like Ernesto Falcon at the EFF and Stanford Law Professor Barbara Van Schewick have long noted that when the FCC obliterated its authority over ISPs and net neutrality (by rolling back their classification of ISPs as Title II common carriers under the Telecom Act), it also ironically obliterated its authority to tell states what to do. Shorter version: an agency that has abdicated its regulatory authority can't then go and try to utilize this now nonexistent authority to dictate state consumer protection efforts.

Short version: the FCC was a little too clever by half, and managed to shoot itself in the foot. ISPs like Charter Spectrum have already tried to use the FCC's preemption language to tap dance out of a New York State lawsuit over terrible service and slow speeds, but the courts so far have shot these efforts down.

The central argument the DOJ is attempting to make in its complaint is that the looming DC Circuit case should should be settled and the FCC's preemption language deemed lawful before California's law can take effect. You'll recall that 23 State Attorneys General sued the FCC claiming it ignored the facts and the public interest in the rushed repeal. Given all of the bizarre nonsense Ajit Pai's FCC was up to during the repeal (making up DDOS attacks, ignoring identity theft and fraud during the comment period), the FCC has a not-insubstantial risk of losing that case and having the original 2015 rules restored.

Knowing that pesky state laws could disrupt the telecom industry's master plan as we all wait for that trial's outcome, the DOJ is trying to buy some time. And while it's certainly possible that the DOJ could nab a sympathetic Judge that's willing to ignore logic, the facts really aren't on the ISPs' side, here.

There's multiple levels of grotesque going on. One, you might recall that Ajit Pai has routinely proclaimed his adoration of "state rights" when states are busy passing terrible protectionist legislation hamstringing broadband competition. You'll notice that this breathless concern over state rights has suddenly gone completely missing when states actually (gasp) try to protect consumers from predatory natural monopolies like Comcast.

Two, the DOJ is literally using taxpayer funds to give California voters the middle finger, trample state rights, and ensure that telecom monopolies with two-decades of anti-competitive behavior under their belts can rip off captive, disgruntled customers. Whatever you feel about net neutrality rules, the reality is that it's what the bipartisan majority of Americans wants. Yet here we are, making repeatedly sure that not only are their voices stifled and distorted, but that their votes don't matter. If you ever doubted the telecom lobby's influence on policy, this little stage play should put that to rest very quickly.

The irony here remains that the FCC's net neutrality rules weren't even very onerous in the first place. The FCC used forbearance to avoid any real rate regulation, while also providing giant loopholes on stuff like zero rating. All told, they were pretty modest protections by international standards. But because some monopoly companies nobody likes couldn't deal with even modest oversight, they've set off a chain reaction that has now created years of litigation and numerous fractured state-level efforts to protect consumers.

As you watch giant ISPs and the politicians who love them lament the rise of "multiple, onerous and discordant" state level protections, it's important to remember that this is entirely their creation. Verizon sued to overturn the FCC's 2010 rules, despite the fact that AT&T and Comcast thought those rules were acceptable. That prompted the FCC to craft tougher rules that could be supported in court, which ISPs then sued over yet again. The reality is they're not interested in any meaningful rules that hamper their ability to abuse the broken broadband market, and all else is pretense.

Again, people tend to get fixated on net neutrality "dying" or being "restored" via the passage of net neutrality protections. But the reality is the quest for net neutrality persists so long as the lack of underlying broadband competition continues to exist. And since the same folks trying to kill net neutrality have also made it clear they have zero interest in policy that addresses this lack of competition, this is an idiotic cycle of dysfunction we'll likely be stuck in for some time. At least until America realizes that letting potent and growing monopolies like Comcast dictate federal tech policy is utterly idiotic and patently self-destructive.

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Filed Under: ajit pai, california, doj, fcc, net neutrality, states rights