How a communications service is classified has a critical impact on how (or whether) it can be regulated. That has been a critical issue with respect to internet access service, where the FCC has vacillated between defining it as a “telecommunications service” (and thus potentially subjecting it to common carrier regulation under Title II of the federal Communications Act) or as an “information service” (thus subjecting it to very limited potential FCC regulation under Title I of that Act). After classifying broadband internet access service (BIAS) as a “telecommunications service” in 2015 and imposing “net neutrality” requirements in BIAS providers, the FCC changed course in 2018 and removed those rules, finding they were detrimental to broadband investment, innovation, and availability and that BIAS should instead be classified as an “information service. Many states then considered how to react to the FCC’s 2018 Order. Some considered new statutes that ultimately did not pass, some directed agencies to look into the topic and report back, some used executive orders to require broadband providers contracting with the state to follow net neutrality principles, and some passed specific statutes.
The two most far-reaching statutes, from California and New York, have been challenged in federal court by industry associations arguing both field preemption and conflict preemption. The California court denied a preliminary injunction of the law there (SB-822), which reimposed the same net neutrality requirements the FCC removed in 2018. American Cable Ass’n v. Becerra, No. 18-cv-2684 (E.D. Cal., Feb. 23, 2021) (oral ruling). That decision is on appeal at the Ninth Circuit, where it has been fully briefed (No. 21-15430). Meanwhile, last Friday the New York court granted a preliminary injunction against a New York law (referred to as the ABA) that requires BIAS providers to offer a $15 broadband internet service plan to qualifying low-income customers. New York State Telecomms. Ass’n v. James, No. 21-cv-02389 (E.D.N.Y., June 11, 2021). That ruling may well be taken up to the Second Circuit. Although the two states’ laws are different, there is extensive overlap in the arguments in the cases, and it is interesting to compare how differently the two courts addressed them.
Field Preemption. BIAS is an interstate service, as it provides users with access to all internet endpoints, which could be anywhere in the world. In both California and New York, the industry associations argued that 47 U.S.C. § 152(a) gives the FCC exclusive jurisdiction to regulate the provision of interstate communications services, and that this exclusive jurisdiction preempts states from regulating in that field. They also relied on caselaw stating that the FCC has exclusive or plenary authority over interstate communication services, and distinguishing that from the power left to the states over intrastate communications services. California and New York responded by arguing that Section 152(a) merely discusses FCC authority to regulate interstate services, without clearly excluding the states. They also contended that the federal Communications Act excludes some interstate communications services, such as information services, from FCC authority, and argued that this means Congress did not give the FCC exclusive power in the field of interstate communications services.
Continue reading “Preemption of State Broadband Regulation – New York and California Federal Courts Diverge”
