Can The States Really Pass Their Own Net Neutrality Laws? Here's Why I Think Yes.

["Dave Farber" <farber () gmail com>]

Begin forwarded message:

> From: Dewayne Hendricks <dewayne () warpspeed com>
> Date: February 8, 2018 at 5:39:19 AM EST
> To: Multiple recipients of Dewayne-Net <dewayne-net () warpspeed com>
> Subject: [Dewayne-Net] Can The States Really Pass Their Own Net Neutrality Laws? Here's Why I Think Yes.
> Reply-To: dewayne-net () warpspeed com
>
> Can The States Really Pass Their Own Net Neutrality Laws? Here’s Why I Think Yes.
> By Harold Feld
> Feb 6 2018
> <http://www.wetmachine.com/tales-of-the-sausage-factory/can-the-states-really-pass-their-own-net-neutrality-laws-heres-why-i-think-yes/>
>
> We are seeing lots of activity in the states on net neutrality. The Governors of Montana, New York and New Jersey 
> have issued Executive Orders requiring that any broadband provider doing business with the state must certify that it 
> won’t block, throttle, or prioritize any content or applications. Several states are looking at passing legislation 
> applying some version of the 2015 FCC Net Neutrality Rules, with California furthest along in passing something that 
> effectively replicates the pre-2017 rules. All of which raises the question — can the states actually do that?
>
> The FCC not only says “no,” but in the 2017 Net Neutrality Repeal Order, the FCC purported to explicitly preempt any 
> state effort to recreate any net neutrality rules. However, as I pointed out back in 2011 when Republican 
> Commissioners wanted to preempt state reporting requirements, the FCC does not have unlimited preemption power. The 
> FCC has to actually have some source of authority to preempt localities. Indeed, Chairman Pai was so insistent that 
> the FCC lacked the authority to preempt state regulation of intrastate communications services that — in a highly 
> unusual move — he refused to defend the portion of the FCC’s Prison Phone Order capping intrastate rates.
>
> The critical question is not, as some people seem to think, whether broadband involves interstate communications or 
> not. Of course it does. So does ye olde plain old telephone service (POTS), and state regulated that up to the 
> eyeballs back in the day (even if they have subsequently deregulated it almost entirely). The question is whether 
> Congress has used its power over interstate commerce to preempt the states (directly or by delegating that power to 
> the FCC), or whether Congress has so pervasively regulated the field so as to effectively preempt the states, or 
> whether the state law — while framed as a permissible intrastate regulation — impermissibly regulates interstate 
> commerce (aka the “dormant commerce clause” doctrine). Additionally, certain types of state action, such a the action 
> of the state as a purchaser of services, are exceedingly difficult (if not impossible) to preempt.
>
> As always with complicated legal questions, one cannot be 100% sure of how a court will decide. But for the reasons 
> set forth below, I’m reasonably confident that the states can pass their own net neutrality laws. I’m even more 
> confident that a state can decide to purchase services exclusively from carriers that make enforceable pledges not to 
> prioritize or otherwise discriminate against content. Mind you, I don’t think either of these is an effective 
> substitute for federal Title II classification and the 2015 rules. But I encourage states to do what they can and for 
> activists to push for state action in addition to federal action where possible.
>
> Interstate Communications, Intrastate Communications, and Mixed Jurisdictional Service.
>
> To review the basic principle from Con Law 101, the U.S. is weird because we have a “federalist” system under which 
> states are “sovereign” except for the explicit powers delegated to the federal government in the Constitution. So 
> generally, states can make whatever laws they want about goods or services offered within the boundaries of their 
> states. But one of the powers delegated explicitly to the federal government is to regulate commerce between the 
> states. Additionally, courts have interpreted the Interstate Commerce Clause as prohibiting states from regulating 
> commerce outside their boarders — particularly where this would discriminate against out-of-state services. This gets 
> somewhat complicated, however, because in theory anything a state does will have some impact on “interstate 
> commerce.” So if the constitution prohibited states from doing anything that had any impact on interstate commerce, 
> it would effectively eliminate the states own internal regulatory power — a result that directly conflicts with the 
> whole “federalism” thing. Additionally, even with regard to interstate commerce, we have historic exceptions for 
> states to regulate certain kinds of activities considered intrinsic to the power of the state and/or necessary for 
> public safety.
>
> In particular, states get to dictate how businesses operate in their state — even if these businesses offer items “in 
> the stream of interstate commerce.” Nothing stops a state from regulating supermarkets, even though these sell lots 
> of out of state items. Nothing stops a state from regulating car dealerships. Nothing stops a state from regulating 
> how properties get rented — even if it involves Airbnb. But the Commerce Clause does impose some limits. If it wants 
> to, the federal government can preempt state law that is inconsistent with federal regulation of interstate commerce 
> (that is the combination of the Interstate Commerce Clause and the Supremacy Clause).
>
> So it’s not enough to simply say that broadband is interstate. So are apples shipped from Washington State to 
> Maryland. That doesn’t stop Maryland from having a lot of say in how apples get sold in Maryland, so long as Maryland 
> doesn’t discriminate against apples grown outside the state and as long as Maryland regulation of the sale of apples 
> doesn’t contradict any federal law on the sale of apples.
>
> Moving from the general to the specific, we now turn to broadband and the regulation of communications services in 
> the United States. Congress has created a federal agency, the FCC, that has general jurisdiction over “communication 
> by wire and radio.” So broadband falls in the general jurisdiction of the FCC. But Section 152(b) explicitly 
> recognizes the role of the states in regulating communications and expressly prohibits the FCC from regulating 
> “intrastate communications.” Additionally, we have well over 80 years of history of states regulating how local 
> telephone companies and local cable companies do business within their state. So this isn’t a case where Congress has 
> “preempted the field” as against any state regulation. To the contrary, states traditionally have lots of authority 
> over how they regulate any offering of local service, including an ability to impose non-discrimination requirements.
>
> In telecom terms, we call something like broadband a “mixed jurisdictional service.” It has interstate elements and 
> intrastate elements. So unless Congress has either expressly limited state authority, or delegated authority to the 
> FCC to create federal policy in a way that preempts the states, the states can do whatever they want — subject to the 
> usual limitations of the Commerce Clause.
>
> [snip]
>
> Dewayne-Net RSS Feed: http://dewaynenet.wordpress.com/feed/
> Twitter: https://twitter.com/wa8dzp



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