In blow to Democrats, federal appeals court strikes down net neutrality

The U.S. Court of Appeals for the 6th Circuit struck down the FCC’s net neutrality rules governing internet service providers Thursday in an early policy win for Republicans seeking to reverse Biden-era industry regulation.

Democrats at the Federal Communications Commission had considered the reinstatement of net neutrality a major accomplishment under the Biden administration. The reversal is a glimpse of the years ahead, during which President-elect Donald Trump’s team has vowed to broadly undo his predecessor’s regulation of private-sector companies.

The net neutrality issue revolves around how heavily federal regulators should control the companies that build and operate the internet. Democrats favor heavier oversight along the lines of how traditional telephone networks are regulated, while Republicans have argued for a lighter touch. Net neutrality was adopted by the FCC under the Obama administration, reversed under Trump, then reinstated under President Joe Biden.

“I think that net neutrality is going to have a long respite,” said Marc Martin, partner at Perkins Coie and a former FCC official, adding that he sees the prospect of the Supreme Court overruling the 6th Circuit as slim. “It would have to take future bad acts that get a lot of attention to maybe bring a different Congress to act and give the FCC authority. Short of that, I think it’s over.”

The 6th Circuit said in its decision Thursday that internet service providers were not just dumb pipes, as the FCC has contended, and for that reason, internet service cannot be regulated as a mere utility service like power, water and traditional telephone lines.

“The FCC’s reading is inconsistent with the plain language of the Communications Act [of 1934],” the court in Cincinnati said, referring to the law outlining the FCC’s authority.

The court cited a major Supreme Court ruling in June, in Loper Bright Enterprises v. Raimondo, that struck down the principle known as Chevron deference, a 40-year-old legal precedent that had broadly allowed federal agencies to set technical regulations for industries in the absence of detailed federal law.

A three-judge panel of the 6th Circuit said that, by applying Loper Bright, it could “end the FCC’s vacillations.” More court challenges against federal regulations based on the Supreme Court’s June ruling are in the pipeline.

A conservative-led FCC under the second Trump administration was widely expected to move to overturn net neutrality if court challenges failed. On Thursday, the FCC declined to say whether it would appeal the court decision, with Chairwoman Jessica Rosenworcel calling instead for Congress to take action.

“Consumers across the country have told us again and again that they want an internet that is fast, open and fair,” she said in a statement. “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.”

Brendan Carr, Trump’s pick for FCC chairman, praised the court Thursday for striking down what he called “President Biden’s Internet power grab” and promised more deregulatory moves for his tenure as head of the agency.

“The work to unwind the Biden Administration’s regulatory overreach will continue,” he said.

Advocates of net neutrality have long argued that such rules are necessary to keep internet service providers from abusing their power against consumers—for instance, by slowing down access to certain websites or types of content. Opponents say that there is limited evidence that internet service providers choose to discriminate against content this way, and that heavier oversight would weigh on innovation.

“For a decade, I’ve argued that so-called ‘net neutrality’ regulations are unlawful (not to mention pointless),” Ajit Pai, who was FCC chairman during Trump’s first term, wrote on X. “ … It’s time for regulators and activists to give up on this tired non-issue once and for all and focus on what actually matters to American consumers-like improving internet access and promoting online innovation.”

In recent years, amid rising concerns about hacking from China and Russia, net neutrality proponents have highlighted that these rules, formally called Title II authority, also give the FCC more power to protect networks against foreign hackers.

Andrew Jay Schwartzman, senior counsel at the Benton Institute for Broadband & Society, said Title II authority would allow the FCC to revoke authorizations of certain foreign-owned internet service providers deemed national security risks; to mandate cybersecurity standards for broadband providers; to prohibit interconnection between broadband providers and data centers controlled by non-U. S. owners where a national security threat is found; and to better address outage reporting.

“This is bad for consumers, for businesses that rely on the internet, and for protecting broadband networks from intrusions by nation states,” he said of the court decision.

The issue of cybersecurity of telecom networks has been in the spotlight in the wake of the Salt Typhoon hacks, which lawmakers have called the worst in the nation’s history. Carr has called it a priority.

With the reversal of net neutrality, the FCC retains broad Title II authority to regulate phone networks but has weaker authority over the separate—but partially overlapping—domain of internet networks.