States React to Open Internet Order

The FCC clarified two things as to state authority over broadband Internet access services in the Order:  (i) it reaffirmed that Internet access service is interstate for regulatory purposes and (ii) it declared that states are expressly preempted from imposing laws or regulating broadband in a manner that conflicts with federal law and the FCC’s regulatory scheme. The Order declared in particular that, under section 10(e) of the Act, states are preempted from enforcing or regulating any areas that the FCC has expressly forborne from regulating. The FCC stated, moreover, that it will “act promptly” to preempt states on a case-by-case basis where they overreach or frustrate federal broadband policies.

For most states, the Order will not have a significant impact as they will continue their existing practice of refraining from Internet access service regulation.  Some states, however, may view the Order as leaving the door slightly ajar for their exercise of jurisdiction.  They may attempt to regulate broadband Internet access services around the edges where the FCC has not expressly forborne and/or try to argue that they have authority over the service pursuant to section 706 of the Act.

What Has Been The State Reaction So Far?

A quick survey reflects a muted and mixed response.

• Michigan House opposes the Order. On the political side, the Michigan House of Representatives on March 4 submitted a Resolution to the President, the U.S. Congress, and FCC Commissioners requesting that the FCC “rescind” the Order classifying broadband Internet access service as a telecommunications service subject to Title II.
• NARUC has intervened to support the legal rationale. On May 11, the National Association of Regulatory Utility Commissioners (NARUC) filed to intervene in court challenges to the Order to support the FCC’s “legal rationale” that “Section 706 and Title II support the FCC’s action.”
• NASUCA (representing 44 consumer advocate offices nationally) intervened on April 22, to support the key finding that broadband Internet access is a Title II service.
• State regulatory staff have cited the Order to support arguments regarding VoIP. Although acknowledging that the Order did not classify VoIP as telecommunications, the Minnesota PUC staff noted that the Order’s analysis of how broadband Internet access is “telecommunications” may be helpful (in part) to find that a company’s fixed VoIP service is also telecommunications.  Subsequently, the Minnesota PUC on May 8 adopted a ruling that a company’s fixed VoIP is a “telecommunications service” under federal law.

Preemption Challenges May Occur

North Carolina and Tennessee are currently suing the FCC for preempting their state municipal broadband laws in a separate decision (adopted on the same day as the Order). While the Order attempted to clarify state authority over broadband Internet access services, there may continue to be jurisdictional battles ahead, as states, localities, and the FCC have differing opinions on the exact parameters of any potential remaining state authority over the service.