Bill Clark

New battle lines in the fight to save Obama-era net neutrality rules have been drawn after a federal court ruled states could pass their own laws protecting consumers from broadband companies, who may block or slow access to the internet or charge for faster access.

On Tuesday, the US Court of Appeals for the District of Columbia upheld the Federal Communications Commission's 2017 repeal of net neutrality regulations as lawful. But it also said the agency couldn't prevent states from passing their own laws to protect consumers.

"The Court concludes that the Commission has not shown legal authority to issue its Preemption Directive, which would have barred states from imposing any rule or requirement that the Commission 'repealed or decided to refrain from imposing' in the Order or that is 'more stringent' than the Order," the opinion reads.

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The decision is good news for the more than three dozen states that have either passed or are looking to pass legislation to protect net neutrality and bar broadband companies from slowing down or blocking access to internet sites. Five states -- California, New Jersey, Oregon, Vermont and Washington -- have already enacted legislation or adopted resolutions protecting net neutrality. Thirty-four states and the District of Columbia have introduced bills and resolutions.

Net neutrality is the principle that all traffic on the internet should be treated equally, regardless of whether you're checking Facebook, posting pictures to Instagram or streaming movies from Netflix or Amazon. It also means companies like AT&T, which bought Time Warner, or Comcast, which owns NBC Universal, can't favor their own content over a competitor's.

Supporters of net neutrality say rules are necessary to ensure broadband companies aren't abusing their power as gatekeepers. But the FCC and broadband companies say the old rules gave the FCC too much power, stifling broadband investment.

In 2017, the Republican-led FCC rolled back protections that had been adopted just two years earlier. As part of its order, the FCC also forbade states from passing laws that imposed similar restrictions, saying a patchwork of regulations would create a de facto federal standard because internet service doesn't stop at state borders.

The court said the FCC had no authority to tell states they couldn't adopt their own protections.

"No matter how desirous of protecting their policy judgments, agency officials cannot invest themselves with power that Congress has not conferred," the court said in the opinion.

Net neutrality proponents viewed this part of the decision as a victory.

"The DC Circuit Court has spoken very clearly," said Gigi Sohn, an aide to former FCC Chairman Tom Wheeler, a Democrat who drafted the 2015 Open Internet Order. "The states are now free to do what the FCC will not -- assert authority over the broadband market and protect an open Internet."

States become battleground

Defenders of the FCC's rollback say not so fast. They argue the agency could still challenge individual states' laws on a case-by-case basis.

"The novel legal theory that the FCC can't preempt state rules that don't yet exist does not detract from the agency's ability to strike them down if they conflict with federal policy," said Roslyn Layton, a visiting scholar at the American Enterprise Institute and a critic of the Obama-era net neutrality rules.

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Indeed, a senior FCC official said on a call with reporters that the agency could still challenge state net neutrality laws in court. This could open a new front in the war over net neutrality in state capitals.

California, which passed a net neutrality law a year ago, is likely to be ground zero for this first battle. Its net neutrality protections are considered the strongest in the nation. The law mirrors the Obama-era rules by prohibiting internet service providers from slowing down or blocking access to websites, or charging companies like Netflix extra to deliver their services faster.

California's law also goes further, outlawing some zero-rating offers, such as an AT&T offer that exempts its own streaming services from its wireless customers' data caps. The law also applies the net neutrality rules to so-called "interconnection" deals between network operators, something the FCC's 2015 rules didn't explicitly do.

When the legislation was signed into law last year, the Justice Department promptly filed suit against California. Other state laws, such as one passed in Vermont, have also been challenged in federal court by the broadband industry. California and Vermont have each agreed to hold off on enforcing their rules until the FCC litigation has been settled.

Still, net neutrality proponents are urging other states to move forward in adopting their own net neutrality rules.

"The Commission's choice to give up oversight of broadband means that states now have the clear authority to step in to protect consumers and promote competition where the FCC is unwilling to do so," said John Bergmayer, legal director for Public Knowledge, a public interest group involved in the challenge to the FCC's repeal of net neutrality. "States should move expeditiously to protect consumers where the FCC has refused to do so."

Those who have supported the FCC's move to deregulate broadband say courts will knock down such state laws.

"Litigation will probably start with California's law, which was put on hold pending this decision," said Berin Szoka, president of the tech think tank TechFreedom. "But it remains highly unlikely that any state net neutrality law will be upheld."

Congress is the solution

One thing that pundits on both sides of the issue agree on is that Congress needs to step in.

The Democrat-controlled US House of Representatives passed the Save the Internet Act earlier this year. This bill essentially restores the Obama-era net neutrality protections that were repealed in 2017. But Republicans say the bill gives too much power to the FCC. Meanwhile, Republican proposals that lack strong FCC authority won't win support among Democrats.

The court's decision could provide the nudge Congress needs to work out a compromise.

"Broadband providers will inevitably complain about having to comply with a so-called 'patchwork' of different state laws," Sohn said. "Congress has a golden opportunity to set a federal standard."