FCC Chairman Ajit Pai has lost a skirmish in the District of Columbia Court of Appeals following moves from the watchdog attempting to remove a broadband subsidy for low income families in Tribal areas.

The removal of the Lifeline subsidy has been a contentious decision from Pai and his Republican cronies leading the FCC since it was announced in November last year, though the courts have now blocked it. While there has been strong resistance from the likes of Commissioners Jessica Rosenworcel and Mignon Clyburn (now former), this is a notable win for Democratic leaning politicians and public servants, as the momentum has been favouring the Pai movement in recent months.

“Petitioners have demonstrated a likelihood of success on the merits of their arguments that the facilities-based and rural areas limitations contained in the Order are arbitrary and capricious,” the order states. “In particular, petitioners contend that the Federal Communications Commission failed to account for a lack of alternative service providers for many tribal customers.”

While the FCC proved there would not be a ‘mass disconnection’ in the regions should the subsidy be removed, the court has pointed to a lack of competition in the region. These are areas which are traditionally underserved, with the subsidy going some way to aid connectivity, as a watchdog and public-funded organization, surely this is one of the fundamental objectives; to assist and serve US citizens where necessary; clearly Pai disagrees.

The original plan from the FCC was to ban the subsidy from being used to purchase broadband services from resellers, though it could be used with network owners. Removing this $25 subsidy would have left the applicants with only a $9.25 option, which the courts did not deem sufficient. Without the option of purchasing services through resellers, competition would be drastically reduced and the opportunity for market abuse would be rife.

The case, which was initially brought to the courts by the Crow Creek Sioux Tribe and Oceti Sakowin Tribal Utility Authority, while also being supported by several non-profits, creates a useful precedent in those opposing the Pai reign. Although Pai is seemingly attempting to scale back all regulation, intervention and market influence at the FCC, the coalition suing were able to demonstrate changes to the FCC’s Lifeline programme would result in people losing telecom service; Pai opponents throughout the US will be looking at this case with much interest.

One interesting point which can be taken from the ruling is that less regulation and market intervention will not necessarily lead to investment.

“Furthermore, the Federal Communications Commission has not shown that the historical record supports its assertion that these new requirements will encourage development of communications infrastructure in underserved areas, thus preventing mass disconnection.”

The principles of the Republican leaning officials is less regulation offers market freedoms and room to innovate. Removing red tape would actually encourage telcos to invest in the infrastructure the country so desperately needs, though it seems the court does not agree with this theory. This rhetoric has fuelled the scaling back of power and influence at the FCC, though such comments from the court will certainly take a bit of the wind out of the Pai sails.

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