FCC Democrats Try to Rally Net Neutrality Forces; Privacy Advocates Wary of Pre-Emption

The internet "needs to remain open for all -- not just the highest bidder. I stand with @JRosenworcel in defense of #NetNeutrality," tweeted Sen. Angus King, I-Maine, Monday. A Pai spokesman didn't comment. He's expected to circulate a draft order this week -- for a vote at the Dec. 14 commissioners' meeting -- to roll back open internet rules and Communications Act Title II broadband classification (see 1711170028).

Privacy advocates raised potential legal and policy issues if the FCC tries to stop states from passing ISP privacy rules. Several state legislatures tried but failed to pass bills this year to counter congressional repeal of FCC rules, but state-bill supporters predict more such attempts in 2018 (see 1709200053).

Democratic Commissioner Mignon Clyburn said she will be sharing stories daily through Dec. 14 from people she invited to weigh in on why the open internet is important to them or their business. "Who are the faces of #netneutrality? @FCC majority needs a reminder among the 22M+ comments filed are stories from #consumers#startups#entrepreneurs & others. Time to share their stories. One each weekday through 12/14," she tweeted Monday. "Mary from Wichita, Kansas writes: 'As a small business owner, I need #netneutrality to make sure I have the speed to conduct business with large insurance companies and if it isn't neutral I could not compete or stay in business,'” she added.

Republican Commissioner Michael O'Rielly called attention to "an insightful piece" piece by Daniel Schneider, executive director of the American Conservative Union. "For the Internet, we need federalism, not anarchy http://www.washingtonexaminer.com/article/2641110 via @dcexaminer," O'Rielly tweeted.

ISPs are trying "to kill net neutrality by eliminating interconnection protections," the "first amendment of the internet," said Incompas in a release. “Blocking interconnection is blocking plain and simple. Attacks on interconnection should send off alarm bells with consumers, streamers and businesses who will see prices rise and cloud services taxed by cable gatekeepers if the FCC eliminates net neutrality protections," said CEO Chip Pickering. Incompas filed a letter to the FCC in docket 17-108 responding to "inaccurate and misleading claims" by some parties that the FCC "need not oversee interconnection to enable an open internet" because residential broadband internet access service (BIAS) competition was sufficient to constrain BIAS behavior."

Privacy Complexities

Litigation is likely if the FCC tries to pre-empt states from making broadband privacy rules, said Electronic Frontier Foundation Legislative Counsel Ernesto Falcon, in an interview. EFF won’t sue, but state attorneys general, certain ISPs and some consumer groups might, he said. But there’s nothing stopping the FCC from pre-empting, and even if it’s challenged, the action will stall states from making ISP privacy laws, Falcon said.

“The FCC's authority to preempt state broadband privacy laws is far from clear, and should the FCC take this action, it would certainly be open to legal challenge,” emailed Eric Null, policy counsel, New America’s Open Technology Institute. He said the FCC is “being inconsistent” by seeking to “severely curtail its own authority over broadband by classifying broadband as a Title I service” while also arguing “it can use this lack of authority to take massive preemption action.” That potential lack of authority combined with state’s broad power over consumer protection and privacy would put the FCC “on shaky legal ground in preempting state broadband privacy laws across the board,” he said.

But an American Legislative Exchange Council official said the FCC has broad authority to pre-empt state laws regulating broadband and specifically ISP privacy. ALEC Communications and Technology Task Force Director Jonathon Hauenschild, who supported congressional repeal of the FCC broadband privacy rules, pointed to language in Sections 230, 253(a) and 257(a). “State laws regulating broadband, or instituting a state ISP privacy rule, tend to run contrary to Congress’ intent that the internet be ‘unfettered… by state regulation,’ said Hauenschild, citing Section 230. “Given how quickly states responded to the ISP Privacy CRA [Congressional Review Act], including language” in the net neutrality order “is likely a good idea,” he said.

There should be no question of authority if the FCC classifies broadband as an interstate information service, said International Center for Law & Economics Executive Director Geoffrey Manne. “The only real gray area … is what happens if the FCC disclaims privacy authority and points to the generally applicable consumer protection laws.” That might still pre-empt state broadband privacy regulation, “but it would shift the preemption analysis of state [Consumer Protection Act] enforcement to look at the relationship between the federal FTC Act and state ‘baby’ FTC Acts, and between FTC and state AG enforcement,” he said, referring to attorneys general. The FTC Act doesn’t pre-empt state law, but what’s unclear is if any enforcement action or rulemaking would be pre-empted, he said. Also, “it’s not clear to me that an FCC interpretation would carry much weight in a preemption analysis of the FTC Act,” he said.

A “real danger” is that if the FCC stops states, and the FTC loses its pending case in the 9th U.S. Circuit Court of Appeals about privacy authority over carriers (see 1710240026), no federal agency or state may be able to do anything to protect broadband privacy, Falcon said. After Congress denied federal protections to internet users, “it would be absurd to now say that states can't protect people's privacy either,” said Natasha Duarte, Center for Democracy and Technology policy analyst. “Preemption should be reserved for when there is actually a federal regulatory system, and this administration has shown no intention of writing or enforcing broadband privacy rules like the ones that were passed in 2016 and rolled back by Congress.”

Differing Perceptions

"The coming proposed order appears exactly as expected except for the additional provision to preempt states," emailed Andrew Regitsky, CCMI telecom consultant. "If this Order doesn't prompt Democrats in Congress to make some compromises, such as accepting an information service classification for BIAS in return for keeping the bright line Internet rules, nothing will."

Open Society Foundations Fellow Gigi Sohn expects Pai to release a draft order Tuesday or Wednesday that would repeal net neutrality rules except for a transparency rule. "Just in time for Thanksgiving, ... Pai will deliver every American a giant Internet turkey, the main course of his year-long feast on consumers’ rights," she said in a statement. "If adopted, the basic protections that consumers and innovators rely on to protect them from the anti-competitive and anti-consumer behaviors of huge broadband providers like Comcast and AT&T will be cooked. In a few short weeks, the big broadband providers will be free to double their prices, extract extra tolls on fast lanes for online businesses, and track and sell their customers’ web browsing activity. When they're done, what will remain of consumer protection on the Internet will be nothing more than a carcass."

"Many want to sensationalize" the coming FCC action, said Roslyn Layton, American Enterprise Institute visiting scholar. "In truth we are just returning to the regulatory regime that governed the internet from 1996-2015. There are more laws and layers of enforcement under this earlier regime." The FTC's Section 5 authority allows it to police unfair and deceptive practices," she emailed. "It was first the FTC, not the FCC, which brought the case against AT&T Mobility LLC for throttling speeds on its unlimited plan. Moreover state Attorneys General have the ability to enforce transparency and consumer protection." The FCC's expected move will likely improve the opportunity for bipartisan congressional solutions, she said, noting appeals challenging the FCC's open internet regime are pending at the Supreme Court.