Proponents of net neutrality criticized a federal appeals court ruling handed down yesterday that held the Federal Communications Commission does not have the authority to impose rules requiring broadband operators to treat all internet traffic equally and banning them from giving preferential treatment to some sites by speeding up or slowing down consumer access.

The ruling by the 6th U.S. Circuit Court of Appeals hands the incoming Trump administration an early win, as FCC commissioner Brendan Carr—Trump’s nominee for chair—has made it clear he opposes net neutrality.

In its decision, the court cited the Supreme Court’s 2024 decision to strike down the 1984 Chevron U.S.A. Inc. v. Nat. Res. Def. Council ruling, putting additional restrictions on the ability of federal agencies to develop policies and enforce rules. The longstanding Chevron ruling had established the legal test for when courts should defer to a regulatory agency’s expertise.

“Using ‘the traditional tools of statutory construction,’ id., we hold that Broadband Internet Service Providers offer only an ‘information service’ under 47 U.S.C. § 153(24), and therefore, the FCC lacks the statutory authority to impose its desired net-neutrality policies through the ‘telecommunications service'’ provision of the Communications Act, id. § 153(51),” the court ruled.

Net neutrality has endured a ping-pong existence since it was first proposed in the 1990s. Over several decades, it has been approved several times by the FCC and then struck down by courts. Many of those decisions have fallen along party lines, with Democrats supporting net neutrality and Republicans opposing it.

Net neutrality was first implemented during the Obama administration, under the chairmanship of Tom Wheeler in 2015. The FCC then repealed the rules under Donald Trump-appointed chair Ajit Pai in 2017. They were reinstated last April by the Biden administration-led FCC, headed by chair Jessica Rosenworcel.

Following the ruling, Rosenworcel said: “Consumers across the country have told us again and again that they want an internet that is fast, open and fair. With this decision it is clear that Congress now needs to heed their call, take up the charge for net neutrality and put open internet principles in federal law.”

Fellow Democratic FCC commissioner Anna M. Gomez agreed.

“As I have consistently said, there is a principle at the heart of the Open Internet debate on which we all agree: Broadband access to the Internet is essential for modern life,” she said. “I remain convinced that appropriate guardrails are necessary to ensure that this critical service remains accessible and secure for all. In the wake of the Sixth Circuit’s decision, Congress should act to end this debate and to protect consumers, promote competition and economic leadership, and secure the integrity of our networks.”

Net neutrality advocates in Congress also condemned the ruling, with Sens. Edward J. Markey (D-Mass.), a member of the Senate Commerce, Science, and Transportation Committee, and Ron Wyden (D-Ore.) issuing the following statement:

“Without net neutrality, consumers, small businesses, and innovators alike will face increased costs, reduced choice, and less competition. It is a lose-lose-lose,” said the Senators. “The Sixth Circuit's decision to overturn the FCC's net neutrality rules is deeply disappointing and undermines the free and open internet. This ruling upends the fundamental principle that internet service providers should not act as gatekeepers, favoring certain users, content, or services over others.

“Today’s opinion also underscores the serious flaws with the Supreme Court's decision to overturn its longstanding precedent established in Chevron v. NRDC granting deference to agencies’ interpretations of their ambiguous statutes. The 6th Circuit opinion makes basic errors about communications technologies, neatly illustrating why expert regulators, not judges, are best positioned to make complex public policy decisions.

“With the incoming Trump administration hostile to broadband regulations and intent on using communications law to target its political opponents, we are clear-eyed about the immediate future for net neutrality protections. But the fight for a free and open internet is not over. We will continue to fight to restore these essential rules and ensure that consumers and entrepreneurs don’t have to kiss lower prices, competition, and choice goodbye because of Donald Trump’s devotion to corporate interests.”

A new report from Northeastern University and the University of Massachusetts shows that U.S. wireless carriers are throttling online video traffic “24/7,” with AT&T and T-Mobile the biggest offenders. The claims come a little more than a year after the FCC’s repeal of net neutrality rules—that were designed to avoid such instances—went into effect.

Based on 650,000 tests from early 2018 to early 2019, the researchers found that AT&T throttled Netflix 70% of the time and Youtube 74% of the time. AT&T left Amazon’s Prime Video alone, however. T-Mobile U.S. throttled Amazon Prime 51% of the time but left Skype alone.

“They are doing it all the time, 24/7 and it’s not based on networks being overloaded,” David Choffnes, associate professor at Northeastern University, and one of the authors of the report, told Bloomberg.

[Read more: The Battle Over Net Neutrality]

The FCC repealed net neutrality rules in December 2017. At the time, critics warned that a repeal could lead to ISPs downgrading internet speeds that could favor their own content, a concern frequently raised in the AT&T-Time Warner merger. Attorneys General in 22 states have filed a protective petition for review against the FCC in the U.S. District Court of Appeals in the District of Columbia.

AT&T denied the claims.

“We don’t throttle, discriminate or degrade network performance based on content,” said AT&T spokesman Jim Greer in a statement. “We offer customers choice, including speeds and features to manage their data.”

FCC Commissioner Jessica Rosenworcel, a proponent of net neutrality, issued a stern warning about what could happen when the commission voted to repeal the rules in 2017.

“As a result of today’s misguided action, our broadband providers will get extraordinary new power from this agency,” Rosenworcel said at the time. “They will have the power to block websites, throttle services, and censor online content. They will have the right to discriminate and favor the internet traffic of those companies with whom they have pay-for-play arrangements and the right to consign all others to a slow and bumpy road.”

WASHINGTON— Ajit Pai presided over his first general meeting of the Federal Communications Commission as chairman today, and after a vote eliminating certain public-file requirements for broadcasters and cable operators, Pai fielded questions from the Washington, D.C. communications press pool probing his positions on network neutrality, retransmission consent, media ownership, the auction silent period and a host of other issues, including the White House directive to eliminate two regulations for every new one approved.

MEDIA POLICY REPORTER POOL Q&A
Q: I was wondering if you could tell us about any specific process reform plans and have you been in talks with the White House about delegating some FCC functions to other agencies.

Pai: I have not made any determination with respect to process reform at this time… I have not had any conversations with the White House.

Q: I want to ask about yesterday’s White House Executive Order on off-setting regulations… [“Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs,” Sec. 2: Regulatory Cap for Fiscal Year 2017. (a) Unless prohibited by law, whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.] 

Pai: We are still studying the particulars of the Executive Order. My understanding is theWhite House has taken the position that the Executive Order does not apply to us, but we want to make sure those regulations on the books remain necessary in the interest of competition and the public interest. We anticipate… as you saw this morning with the vote on the Media Bureau [public file] item, that we are taking a look at those legacy regulations and removing them if they are not necessary.

Q. You said the FCC’s Enforcement Bureau had gone off the rails, but the mission is important. You have a chance to overhaul the process and procedures. What changes do you plan to make and what is your timeline?

Pai: Enforcement is a critical priority for this commission. Consumer protection is an area [in which] I have taken a great interest. Last week, for example, in addressing the Consumer Advisory Committee, I talked about the steps to address the No. 1 source of consumer complaints to the agency, and something one called the “scourge of civilization”—robocalls. I look forward to working with my colleagues and Enforcement Bureau and staff to find ways to make sure consumers are protected from that scourge.
More generally, my philosophy is simple. Follow the law and make a diligent search for the facts, and review the law and facts, and take the appropriate action necessary to protect the public interest. I can’t put it any more simply than that.

Q. Numerous countries are planning to build more [satellite constellations] to expand broadband… has the commission considered how much spectrum would be needed to enable those constellations and what may or may not interfere?

Pai: We are currently studying some of the requests filed with respect to the spectrum in the ranges you mentioned, but we have not made formal determinations. It is part of our overall look at what spectrum policy should be going forward. I’m afraid I cannot provide specifics at this time.

Q. You have been critical of the Open Internet Order of 2015. Do you have options on the table to re-examine [it]? I’m wondering if you think the agency should, in the meantime, continue to enforce those rules.

Pai: What I will say is that Commissioner O’Rielly and I recently wrote to a number of trade associations representing small internet service providers, and we pointed out we would not apply some of those rules to those smaller providers.
In addition, I mentioned… the order I circulated to colleagues with respect to an exemption for small business. (See, “Statement of Chairman Ajit Pai On Voting to Protect Small Businesses from Needless Regulation.”) Beyond that, I’m not going to comment on what steps we may or may not take.

Q. Would you say it is an option not to enforce them?
Pai: I won’t make any comment beyond the small business exemption letter and order that have been sent.

Q. You were sharply critical of the public interest standard in your dissent on Charter-Time Warner Cable. How would you revise it now that you are chairman?

Pai: I made my views known in that dissent. Nothing has changed since I issued that statement. (Statement of Commissioner Ajit Pai, approving in part and dissenting in part.)

Q. You presented two options. One was dramatically scaling back FCC authority in the area, and the other, to re-orient the FCC to be modeled after the DOJ, but you noted that would create redundancies. Which direction would you like to go?

Pai: I will [refer] back to the answer I have in the confirmation hearing, where I expounded on how I saw our role in review and the public interest standard—it is how I view it today. [C-Span video of Nov. 30, 2011 hearing.)

Q: Another aspect of the Open Internet Order you disagreed with was the reclassification [under] Title II services. Have you given any thought, now that you have the gavel, as to what direction the commission might take in terms of reconsidering that?

Pai: We have not made any determinations at this time, no.

Q: One big part of your Digital Empowerment Agenda was the opportunity zones. I was curious—a lot of that will have to go through Congress—if you have had discussions with lawmakers about some of the ideas in this agenda?

Pai: We have had preliminary discussions with some members of Congress and I’m excited about what that proposal could do for a lot of areas, urban and rural, that need to be revitalized with some kind of digital opportunity.
This is a decision for Congress, but as I outlined in the speech in September in Cincinnati, I think updating former Sec. Kemp’s vision for the 21st century is something a lot of people on the wrong side of the digital divide would appreciate.
… I think of the entrepreneurs in rural and urban areas who could let their ideas have greater expression in the digital economy if they had that kind of internet access. It is something I hope will cross party lines and not depend on where you stand politically. I’m hopeful going forward we can work together in a bipartisan way on that idea.

Q: I want to ask about the digital divide in terms of affordability. You dissented from the expansion of Lifeline. How does that fit into your deployment agenda?

Pai: That is one area we are reviewing and we have not made any determinations as of this time… [not] after the first week in the big chair.

Q: After you were appointed, a lot of outlets reported it would be the death of [an open internet].

Pai: We have not made any decisions. I favor a free open internet and oppose Title II. That is pretty much all I can say about that topic. I won’t make any news today as it relates to that topic.

Q: I want to ask about the [Broadband Access Advisory Committee] and the process of selecting members. Will they come from relevant the broadband industry; the operators and vendors and such?

Pai: You will see in a Public Notice we are soliciting membership from a wide variety of organizations. We anticipate 15 members on the committee selected from members of industry and consumer and community organizations, and many others.
We want a diverse cross-section to give us a fully informed recommendation on things like the model code and local zoning and permitting. We want to make sure we had a pretty wide-ranging membership. Hopefully, that will go out soon if not already.

Q: Can you talk about your plans for TV ownership rules?

Pai: This is another one of those areas we are studying. You can see what I said in the past, but I’m not prepared today to make comments about where we might go in the future.

Q: Does the FCC plan on expanding jurisdiction beyond news stations to video online streaming… when it comes to closed captioning?

Pai: That is an issue we have not looked at in the last week. I will have to get back to you on the answer. I can’t make a comment at this time. I’m sorry.

Q: This is more of a philosophical question. Can you talk about how you view competition in the [video] space and if it includes internet companies like Google and Netflix? When you think about your analysis of competition as pertaining to all the policies in the agency, how do you think of the landscape of the industry of communications today?

Pai: The only think I can say is that I tend to think that we need to view the marketplace as it is and not as it was. So, when I first started working at the Justice Department in the’80s, you had telephone companies and cable and satellite each competing in niches, and [in the] conversation of the subsequent two decades, [that] has become the norm rather than the exception.
So I think it is important for regulators to always have a current view of where competition stands in order to make informed and predictable judgments about regulations.

Q: Do you think of internet companies also as [video] distributors?

Pai: I think it depends on the particular marketplace we are talking about. Yes, it really just depends is the answer I should give to that.

Q: You said you favor a free and open internet. Can you tell us, in your mind, what that entails?

Pai: Again, I would refer you to the comments I made before about the four freedoms and making sure consumer continue to enjoy them. I can’t put it better now than I did then. (Statement of Ajit Pai, FCC commissioner, before the House Finance Subcommittee, p. 7.)

Q: Another question that everyone has been asking is the set-top proposal—will the commission close the docket for the set-top proposal?

Pai: This is one of the 23 items that we are reviewing. Standard operating procedure when there is a change in administration. The new administration takes a look at the items that were pending under the previous administration, so we are still making a determination as to the appropriate steps forward.

Q: Two-part question. First, as you probably know, AT&T and Time Warner have filed a securities notice not to seek review of the merger. Is that something you agree with?

Pai: I won’t comment on any transaction that is pending at the commission or could be pending before the commission or otherwise in the news.

Q: In December, you talked about taking a weed whacker to unnecessary rules at the FCC. Can you talk about how aggressive you think you will be in terms of using your authority to reconsider, as well as re-open or close dockets that are currently in front of you.

Pai: I can’t predict the future with any particular detail, but I can say what I said earlier in response to a question in this exchange, which is this: I think it is incumbent on the FCC and any agency to make sure regulations match the times. If there are outmoded regulations that are in the way, it doesn’t serve consumers to keep them. That is one reason I think we need to make sure whatever is in the C.F.R [Code of Federal Regulations] that is outmoded, is re-examined if necessary.

Q: To get back to the digital divide, there is talk about including broadband in a an infrastructure bill. Would you support that?

Pai: Obviously, digital empowerment has many… opportunities that include use of tax incentives for internet service providers to build in areas where infrastructure is lacking.
Another part is offset of the payroll tax for entrepreneurs who want to set up businesses in those areas. There were three other different components. One related to mobile broadband in rural America, and one related to general regulatory obstacles that we often hear about, and a third related to entrepreneurship like start-up acts and jobs acts that might not be within the FCC bailiwick…
I want to be holistic and figure out all the tools from a regulatory and legislative perspective to enable the digital economy to thrive so everyone has a full and equal opportunity to participate rather than just watch.

Q: Broadcasters and others have asked the FCC to end the ban on auction-related communications. Where does that stand?

Pai: The staff is actively reviewing the requests they have made, and while I cannot make any news today, I’m hopeful we will be able to reach a determination soon.

Q: A few moments ago, you said you wouldn’t comment on whether the agency will enforce the net neutrality rules. How should we interpret that?

Pai: I’m not making news on that beyond the small business exemption I spoke about.

Q: May I ask you about another rule? Retransmission consent rules.

Pai: If I had to speculate, I would give you exactly the same speculation that I speculated about before. (Statement of Ajit Pai on the “Amendment of the Commission’s Rules Related to Retransmission Consent,” Media Bureau Docket No. 10- 71.)