The FCC’s net neutrality rules have been rescinded, in another blow to the Biden administration

A federal appeals court on Thursday dealt a blow to President Biden’s Federal Communications Commission, striking down the agency’s long-awaited open internet rules.

The FCC sought to reinstate a sweeping policy put in place under President Obama that was designed to treat Internet service as an essential public service, similar to water or power utilities.

Under so-called net neutrality rules, ISPs would have been subject to greater regulation. A Republican-led commission repealed the rules in 2017 during President-elect Donald Trump’s first term.

Early last year, the Federal Communications Commission — then under Democratic control — voted to formalize a national Internet service standard to prevent blocking or slowing of information delivered over broadband Internet lines. The basic principle of the open Internet meant that ISPs could not differentiate between content suppliers.

The order would also have given the FCC more oversight to require internet providers to respond to service outages or security breaches involving consumers’ data. The FCC cited national security, saying increased oversight was necessary for the commission to crack down on foreign-owned companies deemed security threats.

But on Thursday, the 6th U.S. Circuit Court of Appeals, based in Cincinnati, ruled that the five-member panel lacked the authority to reclassify broadband Internet as a communications service. The decision undoes one of Biden’s key technology initiatives.

In its ruling, the Sixth Circuit referred to the FCC’s net neutrality order as a “draconian regulatory regime.”

The U.S. Supreme Court’s recent ruling removed the judicial framework that allowed courts to interpret rules with consideration for the federal agency that created them, the court said. The Sixth Circuit said the FCC did not have the statutory authority to change the classification of broadband Internet to a telecommunications service. This role falls to Congress.

The case was brought by the Ohio Telecom Association, a trade organization representing Internet service providers.

FCC Chairwoman Jessica Rosenworcel, who has long championed net neutrality rules, called on lawmakers to take charge in the wake of the court’s decision. She sponsored the move to reinstate them during her time leading the agency and led a 3-2 party-line vote last year in favor of Restore net neutrality rules.

“Consumers across the country have told us time and time again that they want a fast, open, and fair Internet,” Rosenworcel said in a statement. “With this decision, it is clear that Congress now needs to heed their call, take responsibility for net neutrality, and put open internet principles into federal law.”

The regulatory climate has changed dramatically in recent years, and is expected to change again after Trump returns to the White House. Brendan Carr, Trump’s pick for FCC chairman, wrote a chapter on the FCC in the conservative policy blueprint for Project 2025. Companies expect the commission under Carr to be more business-friendly.

“President Biden’s entire plan relied on the ‘chicken-less’ tactic of convincing Americans that the internet would go down in the absence of so-called ‘net neutrality’ rules,” Carr said in a statement. “The American people have now seen the truth of this ruse.”

The dispute over net neutrality hinged on the degree to which the FCC could regulate broadband Internet service providers under the authority the commission received from Congress in the landmark Communications Act of 1934 and the Communications Act of 1996.

“We believe that broadband Internet service providers only provide an ‘information service’… Thus, the FCC lacks the statutory authority to enforce the desired net neutrality policies through the ‘telecommunications service’ provision in the Communications Act,” the department said. Sixth, Judge Richard Alan Griffin wrote in the 26-page ruling.

Consumer groups, which have lobbied for more than a decade for net neutrality regulations, expressed regret over the decision.

“Today’s decision represents a major setback for consumers, competition, and the open Internet,” John Bergmeier, legal director at Public Knowledge, said in a statement.

“In rejecting the FCC’s authority to classify broadband as a communications service, the Court ignored decades of precedent and misunderstood the technical realities of how broadband works and Congress’s clear intent in communications law.”

Net neutrality has been a see-saw battle for more than 15 years.

In the early days of broadband penetration, the big companies lined up on opposite sides. Google, Netflix and other tech companies have joined consumer groups demanding net neutrality rules to level the playing field with internet service providers like AT&T, Verizon or Comcast Corp. Or Charter Communications.

Net neutrality proponents wanted providers to be regulated under Title II of the landmark communications law, which would have given the FCC a greater enforcement role.

“Remember that initial market concern about the Title II reclassification had absolutely nothing to do with net neutrality,” cable analyst Craig Moffitt wrote in a note to investors. Instead, investors in telecom stocks were concerned that such a reclassification would open the door to “regulation of broadband prices,” Moffitt wrote.

But this did not happen.

“This risk has now been put aside,” Moffett wrote.