US court questions legal basis for net neutrality reinstatement

(Reuters) -Federal appellate judges signaled skepticism on Thursday over whether the U.S. Federal Communications Commission has the authority to reinstate landmark net neutrality rules, a move that was challenged by groups representing internet service providers.

A three-judge panel of the Cincinnati-based 6th U.S. Circuit Court of Appeals heard arguments in an industry lawsuit that accused the agency of exceeding its powers in bringing back the net neutrality rules.

The FCC, encouraged by Democratic President Joe Biden, this year revived the rules, which initially were implemented in 2015 by the FCC under Democratic former President Barack Obama but then repealed by the agency in 2017 under Republican former President Donald Trump.

The 6th Circuit in August blocked the FCC from enforcing the rules while the industry’s legal challenge plays out.

Net neutrality rules require internet service providers to treat internet data and users equally rather than restricting access, slowing speeds or blocking content for certain users. The rules also forbid special arrangements in which internet service providers give improved network speeds or access to favored users.

The case turns on whether the FCC has the power to reclassify broadband internet as a telecommunications service that would give it sweeping regulatory authority. The FCC voted in April to resume regulatory oversight of broadband internet.

Judge Richard Allen Griffin wondered whether the FCC’s changing positions during the past three administrations posed a problem for the commission’s legal case.

“If it’s a close call, should we not defer to the policy of Congress, which is to not provide for extensive regulation?” Griffin asked FCC Associate General Counsel Jacob Lewis.

Lewis said federal law provides the agency authority to implement net neutrality rules.

“Congress clearly understood that the commission would have to make these calls,” Lewis told the judges.

The U.S. telecom industry opposes the net neutrality rules. Major tech companies like Amazon.com, Apple, Alphabet and Meta Platforms support the rules.

A different 6th Circuit panel put a hold on the FCC’s action. In doing so, those judges invoked what is called the “major questions” doctrine, a judicial approach that gives courts broad discretion to invalidate executive agency actions of “vast economic and political significance” unless Congress clearly authorized them in legislation.

“Net neutrality is likely a major question requiring clear congressional authorization,” the court wrote in blocking enforcement of the rules.

The net neutrality rules bar internet service providers from blocking or slowing down traffic to certain websites, or engaging in paid prioritization of lawful content, as well as give the FCC new tools to crack down on Chinese telecom companies and the ability to monitor internet service outages.

Jeff Wall, a lawyer for the telecom industry groups, told the judges that the FCC “claims authority that for decades no one thought it had and that Congress has consistently refused to give it.” Wall said under the “major questions” doctrine Congress should decide the matter, not a regulatory agency acting on its own.

Judge Raymond Kethledge questioned the FCC’s argument about how it classified broadband service.

Kethledge said the case should focus on the statutory text, not the major questions doctrine. “After 16 years as a judge, let’s just talk about the words,” Kethledge said.

Reinstating net neutrality has been a priority for Biden, who signed a 2021 executive order encouraging the FCC to reinstate the rules. Under Trump, the FCC had argued that net neutrality rules were unnecessary, blocked innovation and resulted in a decline in network investment by internet service providers.

(Reporting by David Shepardson; editing by Jonathan Oatis and Will Dunham)